The NFT Stack: Exploring The NFT Ecosystem

At the end of the day, non-fungible tokens (NFTs) are simply a primitive of blockchains, like fungible, ERC-20 tokens. But the narrative of NFTs as a category has taken off to refer to a broader trend and thus, similar to DeFi, the term “NFTs” now encompasses its own ecosystem.

However, non-fungible tokens will utilize many of the same financial primitives as DeFi and thus the stack ends up looking fairly similar but with a more consumer-centric lens.

Layer 1: Layer-1s

To date, the NFT landscape has been dominated by Ethereum, Flow, and to a lesser extent Wax. It’s likely that most NFT applications will need to transition from Ethereum mainnet onto a Layer-2 solution or sidechain while relying on Ethereum for the settlement layer. The exception to the rule may be for high-end digital art or blue-chip collectibles that require more robust censorship resistance.

Other base layers (Layer-1s) like Solana are actively building out their NFT infrastructure like Metaplex which enables individuals to set up their own NFT storefronts and issue NFT collections with customizable royalty splits.