When looking at the most successful NFT blockchains today, from Ethereum to Cardano, how do you know if they will still be excellent or at the top in months to come? Largely, this depends on how you define success.
Initially, the best performing NFTs on any blockchain were considered successful based on sales volume. This was certainly a good indicator, but not the only metric we should consider when assessing the future potential of an NFT project
Ignoring other metrics can come with serious consequences. At the surface level, NFTs’ value and in-game notion get diminished, while the market can get brutal and punish the token. The bigger issue is that the blockchain’s sales volume does not demonstrate how scalable it is.
Transparency is Very Important
Worldwide Asset Exchange (WAX) is a good example of these NFTs and blockchain dynamics. While the volumes appear awesome, the founders of the project are of the view that they might not be enough to expand the blockchain ecosystem.
WAX is one of the most utilized blockchains, and it is driven by gaming. It processes over seven times more daily transactions compared to other blockchains. When it comes to processing terms, we would say that WAX is the visa of the blockchain niche. Take a closer look at this VISA comparison.
Although credit cards provide support to most retailers and big-ticket transfers, people often turn to Automated Clearing House (ACH) for car leases and mortgages. However, rarely will you get ACH compared to VISA. Why? Because the two models use varying models and value propositions, plus they are complementors, not competitors.
What about Users on the Platform?
DappRadar provides pertinent metrics but with little to do with turnover apart from suggesting turnover would move up or down in response to movement in the numbers.
The main questions that you should focus on include: how many smart contracts are based on the blockchain? What about DApps? More importantly, determine the unique users using the platform?
Myopia originates from Web 3.0 because Web 2.0 metrics largely focused on the acquisition and retaining new users. Well, it resulted in some price-to-ratio earnings in the early days, but Web 3.0 platforms are different. They are not assessed based on the duration of user interaction, user growth or lifetime value per user.
According to William Quigley, mainstream adoption is what people are interested in in the blockchain space. To get this, you have to factor in a combination of users, sales volume, and transactions. Here, sales volume is used to help cut down the noise and spin to separate growth potential and real platform adoption.
A review of a good blockchain fundamental should have sales volume as a component of the scorecard, but not being the scorecard itself.
Take the review ahead and check how DApps and smart contracts change. How these compare to each other should be determined in the marketplace, with different analysts coming up with their own models.
See, it is good of you to get a blockchain, say, that cleared 40 million yesterday. But hold on, what if its maximum is 50 million? As the space evolves, a blockchain that cleared 20 million transactions yesterday but with structures to handle 400 million transactions in the coming days will be a better option.
