The NFT craze has been an intriguing moment for digital artists who have seen great leaps in how tech has allowed them to create their work, but not as much progress in shifting how they profit off of it.
Though crypto’s early adopter artists have seemed to gain the most attention thus far, more institutionally present artists are dipping their feet into the token world. One of the bigger barriers has been the environmental concerns tied to the Ethereum blockchain, which required intense energy usage to mint new artwork, tied to incredibly high transaction fees, something that has invited controversy for early artists because of climate change concerns.
There have been a number of blockchain products to emerge in recent months that promise the benefits of Ethereum with greater speed, lower costs and lower energy usage, most notably Dapper Labs’ Flow blockchain, which powers their NBA Top Shot product. Today, we saw the debut of a new “layer-two” entrant from ConsenSys, called Palm, which operates as a sidechain on Ethereum’s main network but will be supported via the popular crypto wallet MetaMask.
As part of Palm’s launch, the artist Damien Hirst announced he will be launching an NFT project, his first, called “The Currency Project,” on the platform’s Palm NFT Studio.
Ethereum has already committed to transitioning to a more energy-efficient proof-of-stake consensus structure, but it’s unclear how quickly that’s going to happen. The network currently relies on a proof-of-work system (as does bitcoin), which use an energy-intensive manner of prioritizing where the next block in a chain is mined that gets more intensive as a network sees more traffic. It’s a reason why crypto mining operations have had to consistently invest in the latest hardware to maintain an edge and use more power. Proof-of-work does away with most of that, instead choosing nodes on the network to mine the next block based on reputation or their existing stake. There are some real security tradeoffs that have required workarounds though plenty in the crypto community aren’t quite satisfied with the compromises, though proponents argue that environmental concerns should take precedent.
In a press release, the team behind Palm says the ecosystem is “99% more energy-efficient than proof-of-work systems.”
Unlike Dapper Labs’ Flow, Palm benefits from its interconnectedness with the community of Ethereum developers, something that was present in today’s announcement that showcased several industry partnerships including Nifty. The news arrived alongside details this morning of Dapper Labs’ monster $305 million fundraise that will give the company backing to build on the momentum of Top Shot, which has given the broader NFT space the wave of enthusiasm it’s currently experiencing.