Surge in Ether Gas Prices Slowing Demand for Non-Fungible Tokens (NFTs)
The surge in gas prices on ethereum’s network is stifling the growth of non-fungible tokens (NFTs), according to a start-up founder.
Speaking in an interview with Cointelegraph, Sean Papanikolas, founder of NFT marketplace Cargo, says high gas prices are quickly becoming a problem for the nascent industry.
He explained the NFT marketplace has reached an inflection point but is being limited in scalability by the spike in transaction fees.
Now, in 2020, platforms are starting to see the scaling issue now due to the spikes in gas prices. Some platforms have halted minting while gas is high and other platforms see a major decline in activity.
The rise in gas prices has led platforms to look for workarounds, including layer-2 solutions that operate on blockchains other than ethereum. Papanikolas says Cargo has launched a solution based on ERC-721 and ERC-2309 standards to help alleviate the burden of fees.
The start-up founder warned the NFT industry would continue to be limited in the absence of a long-term solution.
I think blockchain companies need to be prepared for the level of software engineering effort it will take to overcome the technical hurdles and the limitations of smart contract development on Ethereum and then how those pieces will work with traditional systems.
Papanikolas continued, saying competition between blockchain companies would grow in the meantime.
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