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Top NFT Collections Fear Return of High Gas Fees and Look to Layer 1s
By: Samuel Haig
Despite Ethereum being the birth-place of NFTs, some of the network’s most popular NFT communities are expanding onto alternative Layer 1 blockchains. The reason? The threat Ethereum’s high gas fees may return.
On Thursday, Pudgy Penguins and Doodles both announced they will expand beyond Ethereum. Pudgy Penguins launched cross-chain bridging between Ethereum, Arbitrum, Polygon, and BNB Chain, while Doodles announced its new Doodles 2 project will live on the Flow blockchain.
Both teams said securing low gas fees for their users was a core motivation behind exploring other alternative smart contract chains. Pudgy Penguins warned that with less than 2M transactions currently processed by Ethereum daily, a surge in on-chain activity could drive gas fees up by “1,000% or more
The 2021 NFT boom was a major source of congestion for the Ethereum network, with average transaction fees for simple transactions spiking above $50 while complex smart contract interactions cost hundreds of dollars in late 2021 and early 2022.
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According to BitInfoCharts, average Ethereum transaction fees fell 93.5% from $63 in November 2021 to just $4 today.
Despite leading players in the NFT sector making significant gas fee optimizations in 2022 and on-chain activity remaining low during recent months, the moves from Pudgy Penguins and Doodles to explore alternative chains suggests many developers are bracing for the possibility that Ethereum fees could soon spike again.
“Ethereum is an ideal base chain for preserving your NFT’s provenance over time,” Pudgy Penguins said in a blog post. “However, Ethereum mainnet’s user experience is not as friendly as it could be for people new to the technology.”
Pudgy Penguins teamed up with Layer Zero, a cross-chain interoperability protocol, to launch its bridge.
“This partnership sets the grounds for the Pudgy Penguins ecosystem to grow, and opens up exciting opportunities for the road ahead,” Pudgy penguins tweeted.
Pudgy Penguin holders that use the bridge will be rewarded with non-transferable soulbound tokens based on which chain they move their NFT to. The team said it chose Arbitrum, Polygon, and BNB Chain for its first multi-chain foray due to their “rapidly growing usage and exposure.”
“It must be easy for the next wave of users, that are in the hundreds of millions, to interact and become a part of the Pudgy Penguins ecosystem,” the team said. “By enabling the Lil Pudgys to go cross-chain, we’re setting up the Pudgy Penguins ecosystem to reach millions of people.”
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Pudgy Penguins has a market cap of $77.2M, according to NFT Floor Price. Its floor price is $8,710, a 246% gain in two months.
Also on Jan. 25, Doodles, a popular PFP avatar collection limited to 10,000 NFTs, announced it will launch Doodles 2 on Flow.
Doodles 2 will allow users to customize their NFT. After minting a base-level doodle and selecting traits such as skin tone and hair color, holders can then customize their NFT with digital wearables such as clothing, accessories, and gadgets of “varying tiers and rarity.”
“In 2023, we’re opening the gates so Doodles can live everywhere,” Doodles tweeted. “Thanks to Flow’s nonexistent gas fees, Doodles holders can enjoy endless customization to create their own uniquely personalized characters.”
Doodles said it will mint the first digital wearables for the new project on Jan. 31. The team hinted that a second set of wearables will be launched roughly one month later.
Doodles 2 wearables buyers will also receive “Doodles 2 Beta Passes” granting access to the project’s private beta launch.
The team said it will continue to invest in its Ethereum-based ecosystem, including upcoming “unannounced experiences” it plans to launch on the chain.
Doodles is the 14th largest NFT collection by market cap with $114.7M, according to NFT Price Floor. The collection’s last sale was $11,475, up nearly 80% from its local low in November.
Samuel Haig•
Samuel Haig•
Samuel Haig•
Samuel Haig•
Samuel Haig•
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