Alarm 🚨 NFT Artists You Need To Move Away

Why you need to stop minting and selling your art on L1 now!

This is just a warning I've been repeating since mid-2022 - but it's getting way more urgent now! Ethereum L1 - that is what you see as Ethereum in your wallet - is not meant to be a place for mainstream NFTs and art.

Why you need to move

You need to move, and I mean it as a general statement. Move away now! If you need a number, then everyone not selling 100ETH/pc of art or PFPs needs to move away from Ethereum L1 now! Everyone else should move out as well, but they can live with excuses of security and survive fees a little longer.

This means you have some work to do, my friends! Your NFTs and art don't belong to L1. As more L2s go live on Ethereum, gas costs will rise again, and your NFTs and hard-earned ETH may get stuck there! Imagine you will want to move your 0.5 ETH or 1 ETH, but you'll pay 20% in fees because you'll compete for block space with L2 chains that secure billions of $$ in value. If you have less money or less valuable assets - you may never be able to get them out of the L1 because the costs of moving it will become prohibitive.

This is already happening today - less valuable collections are basically impossible to exit. You can't even accept offers made on your assets because gas fees are higher than the offer.

It's simple, we have better options than to mint or send money to L1 now. Please use them!

What are L2s

I will piggyback on Alice's (Corsini) newsletter here because her latest issue triggered me to write this appeal to NFT artists!

Let's do a bit of theory;

  • L2s are Ethereum scaling solutions; a simple way to describe how they work is - all L2s use batches to inscribe transactions back to Ethereum L1. That means every L2 bundles hundreds of transactions together into one L1 transaction. Writing these bundles back to L1 is how L2s provide you with (almost) the security and immutability of Ethereum for a fraction of the costs. So, on L2s, we get the security and decentralization (or lack of it) of Ethereum.

  • L2s are overtaking Ethereum (L1) in terms of number of transactions and number of users. There are around 10 Million monthly active users interacting with Layer 2 networks (i.e., wallet addresses). That is over 60% of the total number of addresses that are today active on-chain (meaning inside the whole Ethereum ecosystem).

  • Already today, L2s settle 8-10x more transactions than L1.

If you want to know more numbers and nerd over metric like TVL, L3s, TPS, I recommend that you check https://l2beat.com/. I'll give you the relevant points below

A little bit more of tech speak:

  • currently, most active L2 scaling solutions are based on the Optimism stack. It just means they use the code base created by Optimism. Base and Zora are among those most relevant for anyone in NFT space.

  • TVL (Total Value Locked) metric is useful because it shows you how much money is locked to secure the network in question. Arbitrum is by far the leading L2 in this regard. But don't be fooled - in general purpose L2s (which are most of them - except Zora that heavily focuses on creators) TVL can be misleading as it changes with incentives and time on the market.

IMHO the most interesting metric for NFT artists are - ease of use, user (aka wallet) growth, connected chains growth and avg fees paid on the chain. From that perspective my bet would be on Zora and Base. I say that because I believe that's where most of the buyers and cryto OGs are at the moment outside of DeFi.

  • But to give you some more numbers (again from Alice) - "Polygon is currently the Ethereum scaling solution with the largest users base, closely challenging Ethereum’s dominance. It registered 2.4x the number of Arbitrum’s active addresses and 5x Optimism’s ones in January 2024." This means Polygon is also an interesting alternative for NFT artists - also because of their battle tested tech and many corporate relationships.

  • One table to close with -> Rollups list based on activity in past 30 days

To close this warning pledge

The main thing you need to understand that L2s are killer apps for Ethereum ecosystem scaling and as they grow - the gas fees will grow. I am biased for the ones I mentioned - because they're clearly embedded in Farcaster which might be next Twitter (X)/Instagram/Whatsapp/Facebook combined. But that might be just me.

You choose any L2 you like, but choose! Because you don't want to be locked with illiquid value on the chain we all love, but few can afford.

PS: if you want to learn out more crypto in general, I recommend to follow Alice's newsletter: https://alicecorsini.substack.com/ - I'd like Alice to move to Paragraph, but maybe later 😀

I hope this was just a reminder to watch out for negative folks and it does not effect you or your team. If you liked it - bring your friends - they may love it! Feel free to collect this writing too!

Find me as BFG (aka BrightFutureGuy) on socials and let's connect!
- on Farcaster:
https://warpcast.com/bfg
- Web3 Magic Podcast on Substack - https://www.web3magic.xyz
- on X: https://twitter.com/aka_BFG

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