ELI5: NFT Scaling Solutions

All Solutions Are Not Equal

Everyone who uses, mints or trades NFTs on Ethereum knows that scaling is the key challenge facing the industry right now. The uniqueness of NFTs, a key part of their desirability, is also the very thing that makes them expensive and illiquid to trade on a blockchain with a limited capacity. Many teams are working extremely hard to give players and studios what they want: scalable, instant, and trustless minting and trading of NFTs. The purpose of this article is to help users and developers compare and contrast the various scaling strategies that have been proposed and built. The properties of these solutions usually have a direct impact on the security of your assets: if you’re an NFT holder, it’s important to understand where they are being stored!

Alternative Blockchains (Tron, Flow, EOS)

Alternative blockchains, which make different design decisions to ETH to prioritize throughput, are commonly proposed scaling solutions. This includes projects like Tron and EOS, which support general-purpose applications, as well as projects like Flow, which are targeting NFTs specifically. In general, the blockchain trilemma still applies: the only fundamental scaling boosts come from a reduction in security or decentralization or both. Nevertheless, this is a decision that comes down to individual applications: what makes sense for users of one game may not make sense for another.

Sidechains (Matic, Ronin, xDai)

Sidechains are separate blockchains that run parallel to Ethereum. They have their own miners (often called validators and operators), their own consensus algorithm, and their own bridge to transfer assets to and from the main chain (in this case, Ethereum). Users deposit by locking their assets in a mainnet smart contract. To withdraw back to Ethereum, users initiate an exit on the sidechain, then provide a proof of the exit once it is included in the side chain’s history.

State Channels (Efinity, Raiden)

State channels are a general purpose scaling solution which are most useful in interactions between a defined number of participants in a closed system.

Optimistic Rollups (Optimism)

Optimistic rollups are “optimistic” because they assume that the proof provided for each transaction batch is valid. During a pre-defined challenge period (usually 1–2 weeks), anyone can challenge the submitted proof and assert fraud — these are therefore called “fraud proofs”. The advantage of optimistic rollups is that they easily support general computation: you will be able to copy/paste your mainnet Solidity code.

  • Instant transaction confirmation and mainstream-quality UX
  • No compromise on user security
  • Retaining access to Ethereum’s ecosystem and network effects

We are the first layer-2 scaling solution for NFTs on Ethereum