Solana is faster and cheaper but Ethereum is where all the money’s at. That’s what everyone knows already. But does that affect the NFT trading activity on the two blockchains? And if so, how are they different?

Well, we’re going to have a look below so maybe take a seat and get comfy ☕️.

In this report the parameters are set to months = 6 and date_trunc = weekly. The cumulative values use just the data within the selected time frame. The data we're looking at comes from this extremely beautiful and insightful dashboard linked below 👇 that you can play with.

☝️ The dashboard can be updated on-demand by pressing the refresh button 🔄 in the top right corner of the page.

Now let’s dig in.

I. General Comparison

No doubt about it, Ethereum has a lot greater trading volume than Solana does. We’re talking $130M vs $16M worth of NFTs traded over the last 6 months, so that’s quite a difference.

But while Solana is lacking in volume, it is just as alive as Ethereum and the number of weekly trades occasionally surpasses that of its friendly competitor. Because the NFT market activity is centered around major events such as new releases or partnerships, we can expect the number of trades to be very inconsistent. However, when compared to each other, Ethereum seems to have hit a ceiling, but Solana’s trades count has been holding an upward trend throughout the observed period and peaked just recently.

Why did it spike just now? In case you haven’t been around much lately, DeGods fueled much of it, not only with it’s own collection but also in preparation to the minting of the y00ts project created by the same team.

All this trading naturally does not just happen for free, but comes to a cost paid to the network miners/validators. Depending on what end you’re on, this is either a great income stream or a burdening cost of business. Of course the relationship is actually more balanced than this and everyone actually wins, but since we’re interested in the life of an everyday NFT trader, we’re going to look at it as a cost.

Everyone knows how expensive Ethereum transaction fees are compared to Solana, but it’s actually quite impressive to see this difference considering the transaction counts are not that far apart. Over $566M were paid in fees on Ethereum versus just under $4k on Solana.

Because for a very long time Ethereum’s gas fees were extremely high, users started spreading out activity over the course of days looking to save hundreds and sometimes thousands of dollars. Not only because of that however, but also as a result of wider adoption around the world, we can see activity spread quite evenly across each day.

In the case of Solana, we can see on most days activity being concentrated between 10AM UTC and 12PM UTC, coinciding with daytime in the USA. Because of that we can be pretty confident that most of the NFT market activity on Solana revolves around the USA market. This can be at the same time a strength because this is actually one of the most developed markets and are rich in talent and knowledge, but also a weakness by not having a stronger presence in other geographical regions.

II. NFT Marketplace Activity

The marketplace landscape on each blockchain grew in different ways, but first we’re going to acknowledge the general decrease in volume across both blockchains right around the same period in late May. Other than that, there’s not much else similar between the two.

On Solana we can see MagicEden completely dominating the market, with over 90% of all volume going through it (and a little bit still through ME v1). The little bit of competition it’s facing comes from OpenSea, but it doesn’t seem to pose any convincing threat.

Is this dominance good? Traders obviously have a lot of options to choose from, yet still direct most of their volume through Magic Eden. Because of this ME becomes by far the best (even only) option for launching a new project, or you risk not being noticed. And so the cycle continues.

In the case of Ethereum, OpenSea continues to be the primary trading marketplace by volume, but its dominance continues to diminish and currently has just under 50% of volume going through it over the last 6 months. The OG NFT blockchain accommodates a bunch of other marketplaces having significant trading volumes such as LooksRare or x2y2.

Although both blockchains have well established marketplaces, we can see that there’s still appetite for more. On both networks we can see newcomers Yawww and Sudoswap performing really well, having trades and a lot of users, rising among the top platforms is a very short time.

III. NFT Traders Activity

Ah yes, the tradoors. Quite a lot of them on either chain, but Ethereum continues to have the lead with almost double the number of buyers and sellers Solana has. However, things might change soon if they continue on the same trends.

Unsurprisingly most users only make one or two trades a week and that is true for both blockchains. What else is similar however is the number of addresses making hundreds and even thousands of trades every week. Furthermore, the number of traders in these upper categories is a lot more constant over time, indicating that habitual traders don’t care all that much about the general market and continue the grind no matter the obstacles.

Although hardcore traders kept at it through the storm, they did adjust the amounts traded, which can be seen to decrease considerably over the last few months on both blockchains.

Alright, now forget about similarities because what goes on on each blockchain is quite different.

First, trade size. Solana does surpass Ethereum in the number of trades worth $10 and less. That is to be expected because of the negligible fees. But from that point up, Ethereum shows that it’s a different beast. Not only it has a lot more trades, but it also goes much farther in the amounts paid in one trade, whereas Solana just recently had its second most expensive sale of a DeGods NFT worth $217k USD (or 7033.3 SOL).

Secondly, there is a much larger number of highly profitable trades on Ethereum than on Solana (and yes, the transaction fees were added to the cost of the NFTs).

Initially we might think this is because Solana NFTs get traded more often so each trade captures a smaller margin, but no. Ethereum also has many more NFTs being sold for thousand of times more than their initial cost. Perhaps this is precisely a consequence of the characteristics of the two. High costs of launching a project on Ethereum constrains traders to a smaller pool of collections to trade so they rotate, while the low costs on Solana keep traders engaged with a project only for a short time before moving on to the next moonshot.

Conclusion

The different characteristics and contexts of Solana and Ethereum shape the NFT trading activity taking place on each of them. We’ve seen that both at the high level comparing overall volumes and transactions, as well as by going down the line to the performance of trades being executed over the last few months.

These differences accommodate different trading behaviors and naturally develop around them an ecosystem that fits and further enables NFT traders to do their work in the most efficient way. This is how we’ve come to see MagicEden completely dominate the market on Solana by being a relentless launchpad for new projects, and OpenSea lose ground on Ethereum to LooksRare who offers users a way to earn back some of the stacking fees paid on every transaction.

Which one is better for trading NFTs? Well, it’s not a matter of being better, it’s a matter of how and what you would like to trade.