Any project that’s building its infrastructure on the Ethereum blockchain needs to be looking for alternatives. That’s the reason why digital asset platform Mintbase is embracing Near Protocol. Gas fees on the Ethereum blockchain are troublesome for projects that require many small value transfers. Developers need to be looking at Matic, Near, Flow, Polkadot and other alternatives to Ethereum.
In quite an extensive blogpost Mintbase explains their choice for the Near Protocol. Currently a Mintbase user needs to write multiple contracts to create a store, and then mint each digital asset. At some moments it cost 350 dollars just to launch a store, while minting a non-fungible token cost 10 dollars each. However, ultimately they want to sell stadium tickets and not limit themselves to high value artwork.
Mintbase is not on its own. Cryptovoxels posted a tweet asking their community about alternatives for minting wearables. Over the summer many projects announced plans for layer-2 solutions, like for example Neon District and Axie Infinity. In addition we’ve seen an interest in human readable addresses and free transactions, like for example with the Wax blockchain and Flow blockchain.
What are the problems with Ethereum?
The Ethereum blockchain can only process a limited amount of transactions per second. Currently this is an average of 14.2 transactions per second (TPS), and the network is processing an average of 1.1 million transactions per day.
Users need to pay a fee to process their transaction and the higher the fee, the faster a mining computer will pick it up for processing. In the end the miner will get its share of the fee, and the blockchain stores the transaction on its ledger. In short: the more you pay the faster the network will process your transaction.
Currently a fast transaction costs 233 Gwei, while a slow one costs 205 Gwei according to ETH Gas Station. This means that the minimum price is like 2 dollars for a transaction. That’s very steep if you want to buy a digital asset with a 5 dollar value. When user interact with smart contracts, they prices for these on-chain activities go up. The results in 10 dollar minting fees and even hundreds to dollars to launch that store.
What does a layer-2 solution solve?
A layer-2 solution is an extra blockchain build alongside the main blockchain. This way a bunch of transactions get bundled on the sidechain, and ultimately get back transported as one transaction back onto the main network. So instead of processing 10.000 transactions, the main blockchain only needs to process one transaction. This type of technology eases the workload of the main blockchain.
In addition all transactions are still secured by the main network. That means that the security of the transactions is still maintained by the processing power that’s behind the original network. In this case we’re mainly talking about Ethereum, but this is also something that holds up for the Bitcoin blockchain. The Lightning Network is – in the end – a layer-2 solution that can carry some of the workload from the Bitcoin blockchain.