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The rise of NFTs has been revolutionary and sudden. So sudden, in fact, that despite a wealth of mainstream adoption and billions of dollars changing hands, there are numerous teething problems.
For all the brilliance of Ethereum, there are a few familiar and fair criticisms that must be overcome to keep the NFT space we love so dearly, growing at a rate of knots. One solution is the combining of two blockchains which may offer a “have your cake and eat it” scenario.
The WAX blockchain is purpose-built for NFTs, but Ethereum is the blockchain world’s monetary system. Two blockchains that may seem to be competing on the face of the issue, given Ethereum is the primary chain for many of the major NFT projects. That needn’t be the case, however. Not only can they co-exist, but they can also complement each other.
WAX’s EVM is news that hasn’t received the attention it deserves; it is a noteworthy moment for WAX, but also anyone with even a passing interest in NFTs and their future.
If you’re not sure what exactly WAX’s EVM entails or why it is an important progression for NFTs, allow me to unpack it for you.
First, we need to understand what the EVM is. EVM is short for Ethereum Virtual Machine and is in essence a virtual CPU spread across the globe. Any computer running Geth is part of the EVM and acts as a node, making up a giant network.
The EVM is known as a distributed state machine as it keeps track of the current state of the blockchain on all nodes. Any time a transaction happens, for example, all nodes track it. So, when the co-founder of Ethereum, Joseph Lubin, said they had built an “unstoppable, uncensorable world computer”, it wasn’t hyperbole!
Like a physical CPU, the EVM executes bytecode in smart contracts. Think of bytecode as highly optimized sets of instructions, executed in this case by the EVM. Smart contracts are basic programs comprised of code and data, stored on a blockchain, and that execute when their conditions are met.
For Ethereum, developers write smart contracts in the programming language Solidity, compile it into bytecode, and then upload it to the blockchain as a smart contract. A smart contracts’ required conditions can be simple, but also extremely complicated. So, how does this all look in action?
For example, imagine a smart contract is created for an NFT where the price of 1 ETH is set. Once the prospective buyer submits his bid of 1 ETH, the conditions of that sale are met, and the smart contract executes instantly. If they are not met, the smart contract will not execute.
There’s no wiggle room here and no debate. Once the smart contract executes, it is irreversible. All nodes of the EVM then pull up their copy of the smart contract for that NFT sale and run the bytecode. The state of the blockchain then changes and the EVM tracks this across every single node.
Why the EVM is of staggering importance is another article, but here are the cliff notes: The EVM is a neutral computing infrastructure. It is without ownership, automated, has complete transparency, and there is no trust involved in the workings.
This is why it is so attractive for financial purposes and why Ethereum is the blockchain world’s monetary system.
Ethereum’s Virtual Machine is brilliant, but Ethereum’s flaws are nevertheless, numerous. There are three primary concerns with Ethereum: the gas fees, the slow transaction speeds and low capacity of them, and the environmental impact. These are all traceable back to Ethereum’s Proof of Work (PoW) system. The PoW system requires people to crack arbitrary puzzles and is used in cryptocurrency mining, but at a cost.
The gas fees are arguably the most infamous of Ethereum’s drawbacks, and so I’ll give a brief example: My friends launched a series of NFTs earlier this year and I wanted to buy one to support their project. The price of the NFT was around $30, but when I tried to purchase it, the gas fee for the transaction was $112. After two days of waiting and checking, I managed to snag the NFT for $30 and $72 in gas fees. Imagine you ordered a t-shirt online and the shipping fees were nearly three times the price of the t-shirt! It was, and is, untenable.
The issue with transactions on the Ethereum network all comes down to the maximum number of transactions it can handle, which is around 30 per second. That sounds like a lot, but it isn’t.
If Ethereum is financially centered, then the benchmark ought to be Visa’s average transactions per second, which is around 2,000. Ethereum can be forgiven for being a little sluggish, but that’s quite the chasm. Remember that number of 30 per second as we’ll be coming back to it and it’s important. A low number of transactions per second means the network will feel slow as transactions are queued.
The environmental issue with Ethereum is the most profound and urgent. Due to Ethereum’s PoW system — a design shared by Bitcoin — it requires an enormous amount of computing resources which, in turn, consumes vast amounts of electricity. You will have likely heard of people mining Bitcoin. Well, you can mine Ethereum too and the energy consumption and carbon emissions as a result of this, are harrowing.
Ethereum 2.0, it must be said, will solve several key issues for Ethereum, including a dramatic reduction in energy consumption. Ethereum will merge with Ethereum 2.0, taking it from the PoW system to a more environmentally friendly and faster, Proof of Stake system (PoS).
However, a recent study from the University College of London found that while PoS systems are better, they aren’t all equal. Ethereum 2.0 is projected to be less energy efficient than its rival, Cardano.
With all this in mind, it’s time to turn our attention to WAX. WAX is of course not perfect either and is still improving week on week. For instance, the system of staking resources requires you to stake some of your WAX tokens for network RAM and CPU, which will then allow you to execute transactions without fees.
This can be a confusing situation for newcomers to the blockchain and can result in transactions failing and smart contracts running out of RAM.
However, this is going to become an automated function. Nevertheless, WAX can overcome the major stumbling blocks of Ethereum with the WAX EVM which makes it useful to many Ethereum projects struggling with gas fees and transaction times, for instance.
WAX EVM is a part of WAX’s Tokenomic model, which has inter-blockchain functionality central to its design. WAX EVM, simply put, is a sort of emulator that allows the execution of Ethereum smart contracts, on the WAX blockchain.
By smart contracts made for Ethereum being processed on the WAX blockchain, we can have the best of both worlds, and without affecting the smart contract’s code.
Where Ethereum is the primary monetary blockchain, WAX is designed to be the best blockchain for buying, selling, and trading NFTs. WAX uses a Delegated Proof of Stake system (DPoS) as opposed to the PoW of current Ethereum or PoS of Ethereum 2.0, and you needn’t understand the differences. (If you wish to learn about the difference between PoS and DPoS, this is a good starting point.)
What the DPoS system does is avoid having to pay your month’s rent in gas fees to buy a couple of NFTs. It also overcomes those clunky transaction times as the glass ceiling of how many transactions per second are possible, is shattered.
Furthermore, the DPoS system WAX uses is even more energy efficient than the PoS system, and uses over 100,000 times less energy per transaction than Ethereum on its current PoW system! In fact, WAX is a certified carbon neutral blockchain.
WAX’s blockchain technology can hand up to 8,000 per second and has proven that with its 500,000 daily active users, 17,000,000 daily transactions, and WAX’s annualized secondary NFT market volume being now five times the size of the NFT primary market.
It manages all this while staying complete carbon neutral, instead of melting a penguin’s house. This is why WAX is the most used layer-1 blockchain; it can accommodate a high number of fast transactions without gas fees and without damaging the planet.
Nevertheless, there are developers, gamers, artists, collectors — you name it — already on Ethereum, wincing every time a smart contract is executed. Enter WAX EVM. Interfacing between blockchains hasn’t been easy, but as it becomes more achievable, WAX asked: what if you could have the best of both Ethereum and WAX?
That is, inter-blockchain functionality where those smart contracts on the Ethereum blockchain can be processed with WAX’s technology. You would be able to execute Ethereum smart contracts on WAX’s blockchain, thus avoiding hefty gas fees and getting significantly faster results.
This is all achieved without affecting the original coding of the smart contracts. Let’s look at how big a difference that would make.
It’s truthfully difficult to succinctly summarise all the good this can do. The chief benefit would have to be environmental; using a carbon neutral blockchain over one that has the annual carbon footprint equal to an entire country is more than a positive — it’s necessary.
The transactions per second capacity being raised from around 30 to around 8,000 makes life a lot quicker and smoother. Not having to pay three times your t-shirt in shipping is also welcome, but is consequential in ways many won’t at first appreciate. To me, that’s a saving of $72 in gas fees when purchasing my friend’s NFT.
However, to projects being developed on Ethereum, this solution is a lifeline. Every flaw of the Ethereum blockchain is magnified to these developers as slow speeds and high gas fees cripple their budgets, gating their success until there is a viable alternative, and the WAX EVM is just that.
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