By Piers Kicks, Medio Demarco, Alex Gedevani

Original source: Ranking NFT Platforms: A Guide For Brands - Delphi Digital

Original Compilation: Aaron, W3.Hitchhiker

After years of development and iteration, a multifaceted cryptocurrency ecosystem is finally beginning to emerge. Especially with industries like DeFi and NFTs, innovation is happening all the time. Every new application and use case builds on the previous ones. Ethereum created $1.5 trillion in value in the first quarter alone, and arguably none of this would have happened without Ethereum. Ethereum aggregates most of the liquidity, tools, and users, and it's where the action happens. For those organizations with their own NFT strategy, Ethereum is arguably the best ecosystem to launch it in. It's just that there is a big problem at present, and Ethereum is facing a huge problem-scalability.

The decentralized nature of Ethereum is its greatest strength, namely its security, immutability, and transparency. But all of this comes at a price, and that is network throughput. When demand exceeds capacity, transaction fees will rise, which is not cost-effective for small-scale users and enterprises. From a business perspective, both costing and user experience are important. It's not hard to see why Ethereum's network congestion is a serious problem. However, Ethereum and other public chains have scaling solutions that can help you achieve your goals. The purpose of this article is to compare these different online ecologies so that you can better answer the question - where do you want to build your digital brand?

In the subsequent description of the article, in some parts, we will make comparisons as explicit as possible but not exhaustive. As it stands, there are relatively few production-ready NFT solutions on the market. We will focus on the base layer of Ethereum, Immutable X (Starkware/Volition), Polygon (PoS Chain), Flow and WAX (built on L1 of EOS). At present, other alternatives are still under development, the market is not hot enough, or they are customized solutions for individual public chains. Before we go any further, we also want to touch on environmental issues, for which the NFT space has received some criticism lately. However, all solutions covered in this post have been considered environmentally friendly, or are developing in an environmentally friendly direction (such as Ethereum PoS).

At a high level, we evaluated these scenarios by some key points (criteria) that affect the end-user experience. Now, let's look at these solutions at the network level first.

As we mentioned earlier, we pay attention to Ethereum network issues. The above diagram illustrates how these different solutions exist for Ethereum, and the specific properties of each solution - security and compatibility. On the left side of the diagram you will see the label L1, referring to the"Tier 1 network", L2, refers to the"layer 2 network". Simply put, Layer 1 is an independent network with its own validators and security guarantees, while Layer 2 is a scaling solution built on top of existing Layer 1 with the same security as the layer it is on Networks are pretty much the same. For those new to the cryptocurrency space, having strong security in this case means that the validators running the decentralized network cannot easily manipulate or steal user data.

It should be emphasized that the security of different L1s varies greatly, and the security of Ethereum is much better than that of other L1s. Immutable X is built by StarkWare with new cutting-edge expansion technology, and it is the only second-tier ("L2")technology. It is able to provide several orders of magnitude higher throughput than first-layer Ethereum, while possessing almost the same security as Ethereum. Polygon PoS, Flow and WAX (built on layer 1 of EOS), offer less strong security. However, Polygon does have a real-time Plasma execution and can be considered a layer 2 solution with better safety guarantees. However, it currently doesn't support any NFTs (although it might in the future), so we don't consider it in this post. But we will focus specifically on their PoS chains. Polygon also plans to support other L2 solutions such as Optimistic and ZK Rollups in the future. Again, since these are not yet live, we chose not to consider them in this analysis. While this timeline is uncertain, if Polygon adds support for the Rollups scheme, it will be in the same position as Immutable X from a security and throughput standpoint, depending on the implementation. If you're interested in learning more about Polygon, we recommend checking out our recent in-depth look at it here.

Whether focusing on NFT or something else, a key issue to be considered in blockchain scalability is the "impossible triangle"-that is, the trade-offs between scalability, security, and decentralization. , only two can be satisfied at the same time. To simplify this report, we will treat decentralization and security as synonyms, as the latter is often a consequence of the former.

While the security and scalability tradeoffs are real for each platform, the magnitude of the tradeoffs can vary widely between them depending on the specific implementation. Ethereum L1 largely guarantees its security and decentralization, so its throughput is limited to about 15 transactions per second (TPS). In contrast to Immutable X, its security is slightly weaker (will vary based on Volition selection), but it increases TPS to about 9,000. This is why everyone is confident about the future of Ethereum.

While predictions for throughput potential will vary widely, Polygon’s PoS chain is capable of 7,200 TPS in testnet with 100 validators. That's an impressive throughput at this level of decentralization. On the mainnet, its TPS reached 300+ during the peak period of the network, but more stress tests are needed before reaching its true upper limit. We prefer to score based on the data of the main network, but for the sake of fairness, we decided to assume that the TPS of the test network is the real throughput, so we ranked polygon second after Immutable X. Because its PoS chain has 99 verification nodes, and there is no permission to join. However, its validator nodes are highly centralized, with Binance accounting for 37% of the total number of nodes.

EOS chain, L1 of WAX, the highest TPS in history is 4000, ranking third in terms of throughput. However, the degree of scalability trade-off is significantly different - because the entire block network only has 21 validating nodes. Therefore, our team (and others) believe that the degree of decentralization of EOS is very low, and its security ranks last. Finally, Flow has a throughput of about 100 TPS, which is far from enough for mainstream adoption, but high for a truly decentralized network. But the fact is that although Flow has 140 consensus verification nodes, most of them are run directly by the Flow team itself, and they need permission to run nodes, so it is not difficult to see that the form of Flow is also highly centralized, so in In terms of security, we only think it is slightly higher than WAX. However, we believe Flow will be easier to decentralize than EOS in the future, as we believe that Dapper Labs (the company behind Flow) is less likely to deceive users than EOS.

Next, let's evaluate the asset liquidity and ecological compatibility of these platforms. PS: Asset liquidity refers to the ease with which NFT can be transferred from one chain to another (e.g. withdrawing to Ethereum L1). Eco-compatibility refers to the number of high-quality applications that can be easily deployed on-chain and create assets (for example, supporting OpenSea). For a platform that achieves both, token holders will benefit from the freedom to move their assets anywhere and experience greater utility.

First, nothing beats Ethereum in terms of having a huge application ecosystem and numerous asset cross-chain bridges. With this in mind, it’s not hard to imagine why L2 deployed on Ethereum would receive so much attention.

Dark purple indicates EVM compatibility. Since Polygon uses Solidity, which is the same smart contract language as Ethereum, anything deployed on Ethereum can also be easily deployed on Polygon. How easy is it you may ask? think about"copy+paste". This is a huge advantage for Polygon as it offers the lowest switching costs and a better developer experience for applications looking to move to other chains. So far, the DeFi ecosystem on Polygon has flourished and continues to grow. Polygon’s compatibility with Ethereum earned it a second place in eco-compatibility.

Flow and WAX are designed differently so that Ethereum developers cannot directly transfer resources and tools to be used on their chains. The token standards of these networks are also different, coupled with lower security, the premium for assets on the chain will be lower for the market, which we will discuss later. Neither currently has a cross-chain bridge to Ethereum, but we rank WAX above Flow for asset liquidity because its cross-chain bridge is in development.

The case of Immutable X is special. It resides in the newly developed CAIRO programming language implemented by Starkware-built L2, which is not familiar to most developers. Additionally, existing code is not easily ported directly from Ethereum to it. But it is interoperable with Ethereum and adopts the same token standard as Ethereum, so we labeled it in the above picture"semi compatible"Tag of. Regardless of where the NFT was originally created, whether on Ethereum, Polygon or Immutable X, assets can flow between them, albeit at varying speeds. From a technical point of view, Immutable can facilitate the faster withdrawal of NFT to Ethereum without compromising security, giving it an advantage over Polygon in terms of asset liquidity.

Regarding the compatibility of the ecosystem, we should note that, in fact, the current composability in the NFT field is relatively low. There are multiple reasons for this, like NFT assets are more unique (they are unforgeable after all), and because there is usually less frequent/reliable pricing. When we talk about ecological compatibility, what we really focus on are those prominent NFT markets. If you’ve ever seen a diagram of the Yearn vault strategy, you already know that composability plays a big role in DeFi. Polygon, which is as highly composable as Ethereum, demonstrates this well. It has quickly formed an impressive DeFi ecosystem and amassed over $3.5 billion in liquidity. On the topic of ecological compatibility, this is certainly worth noting.

However, the growth of Polygon's DeFi ecosystem may also be a double-edged sword for NFT projects. Applications migrating to Polygon will still end up competing for scarce block space on its PoS chain, and DeFi activity could dominate the chain if it continues to grow rapidly. This ultimately depends on what the true maximum throughput of Polygon’s PoS chain is, and how DeFi demand grows. This may not be an issue at all, but low value NFT activity has the potential to be priced in, like they are on Ethereum L1. Of course, NFT-specific activities can also be transferred to another Polygon scaling solution in the future. Compared to Immutable X's scaling architecture, this is less of a concern due to its NFT focus and batch processing efficiency at scale, which, in layman's terms, is more cost-effective with more transactions processed per batch.

Now that we can discuss each solution and their attributes, let's look at the scorecard. As shown in the chart below, we ranked these solutions based on various key factors. A score of 5 represents the best choice in its respective category, while a score of 1 represents the worst choice. It’s not hard to see that Ethereum dominates every category except throughput, which is where the alternatives excel. Of course there must be a degree of subjectivity here, although we've tried our best to provide reasons. Below, we describe each of these categories, what they mean, and what factors are considered in our scoring.

Throughput can be quantified, so the results are intuitive. The TPS of Immutable X can reach 9000, Polygon 7200TPS, WAX 4000TPS, Flow 100TPS, Ethereum 15TPS.

Next, let's evaluate security. The Starkware-built L2, where Immutable X sits, can provide security close to that of Ethereum, but it will also be different, which is why it ranks second. Polygon is in third place given its permissionless ~100 validators. Flow is in fourth place, albeit currently highly focused. As we mentioned before, Flow is likely to become more decentralized over time, and we think (personal opinion) that the Dapper Labs team has more credibility than EOS with 21 validators that WAX relies on .

**Wallets:** Although adding compatibility to wallets is relatively easy, it still has an important direct impact on user experience. Polygon ranks second here as it currently supports most wallets, although users need to do some additional configuration. Immutable X can support any Ethereum wallet with minimal burden on users, but since only MetaMask is currently available, we have to place it in third place for now. We decided to rank WAX ahead of Flow as they have built a very intuitive cloud wallet whereas Flow still seems to only offer a custodial solution.

**Fiat currency business: **Given that most people have not transacted in cryptocurrency, the ability to use fiat currency may be the top priority of mainstream platforms. The ability to pay directly with a credit card is a major factor in NBA Top Shot's success, and the reason Flow ranks second. However, credit card payments can have a negative impact on user experience due to chargebacks. Polygon ranks third in terms of fiat currency business because of its liquidity interoperability with Ethereum. Considering the capabilities of its cloud wallet, WAX comes in fourth. We have to temporarily place Immutable X last in this category due to its current lack of fiat-related operations, but that will change soon.

**Developer Experience:** We measure developer experience by how easy it is to build something. Many things can affect this, such as detailed documentation, available Github repositories, programming language used, existing tools, etc. Ethereum (Solidity) takes the top spot, followed by Polygon (Solidity) given its strong EVM compatibility. According to the developers we interviewed, the ranking order should be Flow (Cadence), WAX (C++) and Immutable X (CAIRO). It's worth noting that CAIRO is a very new language and its use should increase over time.

Ecosystem compatibility refers to the ease with which each chain leverages existing building blocks, and how widely integrated that ecosystem is. Polygon's EVM compatibility puts it in the second place. Immutable X is next. As mentioned earlier, while it is not EVM compatible like Polygon, Immutable X is still able to benefit from the existing Ethereum ecosystem. EOS, while a far cry from Ethereum's ecosystem, still has benefits that WAX could benefit from. Flow doesn't yet have the same type of open ecosystem or external market support, so it's at the bottom of the list.

**NFT "Brand Effect": ** We believe that existing brand power is an important factor in attracting new IP to a particular platform. So, given the massive success of NBA Top Shot and other IPs in their track, Flow is number two, behind Ethereum. Immutable X is not far behind, and it has attracted several strong gaming brands. Next up is Polygon, as it has been able to attract several DeFi blue chips and NFT projects like Aavegotchi. Finally there is WAX, which has failed to attract any significant brand power aside from the recent Topps MLB NFTs. WAX's historically low transaction volume (measured by purchase value) reflects that it primarily hosts cheap and lower-quality products, which directly result in them attracting less capital and a market.

**Asset Liquidity:** Finally, we define asset liquidity as the ease with which an NFT can be transferred from one chain to another (e.g. withdrawing to Ethereum L1). Technically speaking, Immutable X can improve the liquidity of NFT on Ethereum without sacrificing security. This is followed by Polygon, whose PoS chain’s NFT extraction can take up to 30 minutes. We put WAX in fourth place because they are actively building a bridge to Ethereum, which has been on their roadmap for a while. Flow's plans for a two-way bridge are still unclear, so it's last on the list.

**PS:** These scoring factors are not all comparable, not all factors are equally important, and some factors are more difficult to improve. For example, it is much easier for a solution to increase the wallets they support than to suddenly offer better security and greater throughput. The latter may require a complete revision and rebuild of the design architecture. With this in mind, we set out to rank the factors themselves so that we can use weights to adjust previous scores. The end result is a more accurate score sheet, as shown below.

Based on the above weights, we adjusted the scores and final rankings for these scaling proposals. Note again that there is a degree of subjectivity to these weights, but we've done our best to make an informed estimate.

As shown above, Immutable X ranks second in overall score, only after Ethereum, mainly because of high throughput and good security. It excels in all the most important and hardest-to-improvement factors. Polygon is a close second. While Polygon didn't get the best score on any one factor, it didn't get the worst score on any factor either. In all important respects, Polygon is a balanced solution without any major flaws in those respects. Next up is Flow, the two key factors that made its NBA Top Shot so successful — its brand power and its fiat currency business. Finally there is WAX, which lags behind in every way except for having a certain throughput.

In this market, though, things change fairly quickly. As the chart below shows, Flow barely had any indicators that caught the market's attention until January 2021, but then took the stage in spectacular fashion. We are encouraged by the mainstream attention of NFT, and we will continue to pay attention to this track because it is still developing.

In the context of NFT explosion, we often face such problems——"Are decentralization and security really that important?"This is an interesting question, especially when NFTs rely on intellectual property owned by centralized companies.

Regarding decentralization, the trend in the past ten years is gradually changing from a middleman model earning price difference to a user-led community model. People began to yearn for the real (digital) property rights on the open platform, and the centralized "walled garden" seemed so pale in comparison. The emergence of trusted, neutral, and shared digital infrastructure has given birth to NFTs. It is this foundation, and the possibilities it opens up, that makes NFTs attractive and different from other previous forms of digital ownership. NFTs are actually"share internet"The smallest unit of , it can be used to express a stunning variety of digital items and give them their own history, provenance, and more complex attributes. We believe that the trustworthiness and neutrality of the networks that issue NFTs are the core drivers that make them valuable. What makes these networks attractive is that they are owned by everyone at the same time, but no one actually owns them. Does the market really value this attribute as much as we do? The chart below seems to reiterate their sentiments.

If you want to explain why security is so important to brand reputation and users, you only need to highlight the consequences of lack of security. A lack of security can lead to manipulation and theft, as well as a loss of confidence in the future of the NFT space. For those big IPs who want to put 3A brands on the chain, the risks brought by insufficient security should not be ignored.

Ultimately, if NFTs do succeed in mainstream adoption, end users may not even know what the underlying technology is all about. A good user experience actually encompasses all the intricacies we just discussed. We hope the explanation in this article will be helpful to you. Now that you know the factors to consider, have you figured out where to base your digital brand in the future?