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Ethereum currently rules the NFT market in both trading volume and high-value projects, with rising rival Solana trailing behind on both markers. But there’s an incoming entrant that aims to deliver where it claims that both competing blockchain platforms fall short: Chia.
Chia turned heads in the crypto space in the spring of last year, delivering a new kind of storage-based alternative to blockchain security and mining that it claimed made it a “green” alternative to Bitcoin and Ethereum.
Now the platform wants to bring that same ethos to NFTs.
Today, Chia announced the launch of its so-called NFT1 standard on mainnet, just weeks after rolling out the initial NFT0 standard on testnet. Speaking with Decrypt, Chia Network Director, President, and COO Gene Hoffman suggested that the new NFT-capable platform would be more eco-friendly than Ethereum and more stable than Solana, which has seen spurts of downtime since last fall.
We’re excited to share our approach to NFTs with the Chia NFT standard. You can start testing and development with our NFT0 standard on Testnet today. We can't wait to see the projects you build!
Read more about our process and approach here:https://t.co/j4El7JRlmK
— Chia Project (@chia_project) May 11, 2022
“What's been exciting is I think people are seeing this as a real opportunity to have a more green option than proof-of-work, especially as Ethereum may or may not get around to the Merge,” he said of the NFT rollout, “and a technologically-capable blockchain that's never had downtime doesn't hurt either.”
Ethereum’s environmental impact has been hotly debated amid the rise of the NFT market, and the Merge that Hoffman mentioned—a shift to an energy-efficient proof-of-stake consensus model—has been on the horizon for years. It’s currently slated for August this year.
After taking aim at Ethereum's latest upgrade, Hoffman doubled down on his criticism of Solana, adding, “We've seen Solana’s technical acumen of late, and that's not been very strong.”
However, the network’s longest periods of downtime came amid overwhelming demand prompted by automated bots, including a peak as high as 6 million transactions per second sent to try and game an NFT mint.
With NFT support just coming online, Chia does not appear to have been tested in such an extreme manner—and for its part, Solana is attempting to address its admitted stability issues.
Could Chia really stand up to the demand of a hot NFT project mint, with or without bots trying to overwhelm the process?
After all, Chia currently processes about 30 transactions per second (TPS), while Solana can range up into the thousands. Hoffman admitted that some kind of layer-2 scaling solution would be necessary to handle NFT mints at a faster rate than Chia’s TPS mark currently allows.
But he also suggested that Chia is designed for different needs than Solana, pointing to a recent Chia blog post regarding the so-called blockchain trilemma—that a blockchain can only be two of the three following things: secure, decentralized, and scalable (or able to handle a sizable amount of transactions). Chia has opted for the first two.
“As a layer-1 [blockchain], focusing on enterprise, government, and multilateral use cases like the World Bank’s Climate Warehouse, we intentionally focus on security and decentralization,” Hoffman explained. “Our network simply has an eminently different function and purpose than a network like Solana.”
Plotting NFT support
An NFT is a blockchain token that serves as proof of ownership of an item, and they’re often used for digital goods like artwork, collectibles, and video game items.
The NFT market expanded to $25 billion worth of trading volume in 2021, per data from DappRadar, and that momentum carried into 2022 ahead of the recent wider crypto market decline that has impacted NFTs as well.
With the NFT1 standard, Chia Network claims that it offers improvements over Ethereum and Solana NFT functionality, such as providing what it says is a clearer picture of the provenance of an NFT via a decentralized identifier (DID), as well as enabling improved permanence of assets tied to NFTs.
Chia’s existing Offers system also allows for direct trades of self-custodied NFTs between users without a middleman or exchange, too, while still honoring creator royalties.
“With our goal to drive adoption, we know that the ability to link your identity, on-chain royalties, and Chia Offers are new and significant functional components to the future of NFTs,” said Richard Tsao, vice president of NFT business development at Chia Network.
Chia was created by Bram Cohen, the author of the BitTorrent peer-to-peer protocol, with the network’s XCH cryptocurrency launching in May 2021. Rather than require super-powerful PC hardware for an energy-intensive mining model, Chia’s “proof of space and time” consensus mechanism is built around users’ storage space.
The network’s “farmers” (or miners) set up “plots” on their hard drive or solid-state drive (SSD) to help secure the blockchain platform and potentially earn token rewards in the process.
Chia claims that the network uses drastically less power than Bitcoin or Ethereum’s proof-of-work mining models, respectively, although the clamor around farming last year led to concern about potential e-waste from prematurely worn-out storage drives. Cohen and other Chia representatives have pushed back on reports about the impact of farming on e-waste.
To mark the launch of the NFT1 standard, Chia Network will offer up 10,000 Chia Friends profile picture NFTs to farmers. Chia Friends, shown up top, recalls Ethereum’s popular Moonbirds project in aesthetic, but it apparently encompasses a wider array of pixelated creatures.
The NFTs will be randomly distributed amongst farmers that make a submission to the Chia Friends website. On-chain royalties from secondary sales will be donated to the Marmot Recovery Foundation. Marmots are a meme-able favorite within the Chia community, Hoffman noted, with Marvelous Marmots and Space Marmots NFT collections both on the horizon.
A flowering NFT market?
Tsao believes that community-driven NFT projects will be among the early adopters of Chia’s NFT standard, along with digital artists who weren’t satisfied with existing platforms. Hoffman added that he anticipates that following an initial focus on artwork, Chia NFT creators will then begin exploring other use cases, such as video and music.
He said that Chia Network began talking with larger organizations in late 2021 about the prospect of NFTs on Chia, but such initiatives may take time now that the infrastructure is live. It could take a year or more for sizable firms to move into the space, Hoffman estimated, adding, “They're not going to move nearly as fast as the individuals.”
After last year’s buzz around the XCH launch and Chia farming, Chia Network has spent the past several months growing out tech and use cases on the platform.
It launched Chia Asset Tokens (CATs)—similar to Ethereum’s ERC-20 token standard—and a U.S. dollar-pegged stablecoin called USDS in partnership with Stably, plus Chia Offers. As Hoffman mentioned, Chia Network has also partnered with the World Bank on its Climate Warehouse initiative, enabling a blockchain platform for trading carbon credits.
Hoffman said that Chia has hovered in the ballpark of 25-30 exabytes of storage securing the network so far in 2022—although the current tally is about 22.5 exabytes—and that the network now has between 150,000 and 200,000 active farmers.
And unlike many crypto coins lately, XCH is actually up over the past 30 days, pumping 27% during that span.
With the launch of NFT1, we’ll see just how quickly compelling NFTs take root on Chia—and whether a market that can challenge longer-standing heavyweights like Ethereum and Solana really does sprout up over time.