Author: Shailey Singh, CoinTelegraph; Compiled by: Deng Tong, Jinse Finance
1. Understanding Compressed NFTs
Compressed NFTs are a type of non-fungible token (NFT) designed to lower the costs of storing and using NFTs for transactions on the Solana blockchain.
As the adoption rate of NFTs continues to rise, developers face challenges in maximizing storage and reducing the minting costs of these digital assets. The Solana blockchain introduced compressed NFTs (cNFTs) to overcome these challenges.
cNFTs are a newer type of non-fungible token that utilizes state compression technology to store data more efficiently on Solana. Unlike traditional NFTs that store all token metadata directly on-chain or through external links (such as IPFS), cNFTs use Merkle trees to optimize data storage.
In short, while conventional NFTs store individual ownership and metadata records for each token on-chain, cNFTs group these records in a highly compressed format. This greatly reduces storage costs and increases transaction speed.
Although the technology is still in its infancy, it accounts for the majority of NFTs minted on Solana.
2. Key Features of Compressed NFTs
With cNFTs, artists and developers can mint thousands or even millions of tokens at a fraction of the cost of traditional NFTs, facilitating innovation.
Let's take a look at some of the main features and benefits of cNFTs:
Cost-Effectiveness: The cost of minting thousands of compressed NFTs is only a small fraction of that of conventional NFTs. For example, according to a report by Solana, creating and minting one million traditional NFTs using the conventional metadata path costs about 24,000 SOL. cNFTs can be organized such that the same setup and minting costs are 10 SOL or less. This means that anyone using NFTs on a large scale can utilize cNFTs instead of standard NFTs, reducing costs by more than 1000 times. Research from Helius shows a comparison of costs between compressed NFTs and uncompressed NFTs as follows:
Scalability: Designed for high-capacity use cases such as gaming, social media, and metaverse assets that may require thousands or millions of tokens.
On-chain and off-chain flexibility: While ownership is tracked on-chain, most metadata can be stored off-chain, further reducing costs without sacrificing utility.
Compressed NFTs offer several prominent key advantages in the blockchain ecosystem. They are affordable, significantly reducing minting and storage costs, enabling creators and businesses to use blockchain technology without financial barriers.
Additionally, cNFTs contribute to more environmentally friendly blockchain practices by reducing energy usage through lowered storage requirements. These attributes make cNFTs a potential game changer for scalable, eco-friendly, and innovative applications.
3. Compressed NFTs vs. Conventional NFTs
While both cNFTs and traditional NFTs aim to tokenize digital assets, their design and use cases are quite different.
Traditional NFTs are known for their uniqueness and exclusivity, but their minting and storage costs can be prohibitively high for large-scale applications. Compressed NFTs solve this problem by leveraging state compression, significantly lowering costs and enabling affordable batch production of tokens.
Unlike traditional NFTs that typically store all data on-chain, cNFTs offload metadata to off-chain systems, minimizing blockchain storage requirements while maintaining utility.
Some key differences include:
Conventional NFTs are best suited for high-value, unique digital artworks or collectibles. In contrast, compressed NFTs excel in scenarios requiring high scalability, such as distributing game assets or digital collectibles to millions of users.
4. How to Mint cNFTs: A Step-by-Step Guide
cNFTs use state compression and Merkle trees to store data in a compact format.
Minting cNFTs may seem difficult at first glance, but it becomes simple with the right tools and knowledge. While each platform has its own instructions, here is a general guide to get started with cNFTs:
Step 1: Set up a wallet: Use a Solana-compatible wallet (such as Phantom or Solflare) to manage your funds and interact with blockchain tools.
Step 2: Fund your wallet: Add SOL (Solana's native cryptocurrency) to pay for minting costs. cNFTs are highly cost-effective, so even a small amount is sufficient.
Step 3: Choose a minting platform: Platforms like Crossmint, Metaplex, and Candy Machine (on Solana) support cNFTs. Choose one based on the scale and features of your project.
Step 4: Prepare metadata: Define the details of your NFT collection, including artwork, description, attributes, and other metadata. Use off-chain storage solutions like IPFS if necessary.
Step 5: Mint your cNFT and set up the Merkle tree: cNFTs use Merkle trees to organize data. Most minting platforms will perform this process automatically. Mint your compressed NFT according to the platform's interface. Confirm the transaction through your wallet, and voila! Your cNFT is live!
5. Where are compressed NFTs stored?
Unlike ordinary NFTs, in cNFTs, the Merkle root is stored on-chain while the Merkle leaves are stored off-chain.
cNFT utilizes a hybrid storage model that balances on-chain and off-chain storage, ensuring cost efficiency and scalability. The ownership of cNFTs is always tracked on-chain, ensuring the authenticity and provenance of the assets.
Nevertheless, most of the asset's metadata (including images or details) is typically stored off-chain. This decentralized off-chain storage often utilizes protocols like IPFS to ensure that the data is distributed and accessible to anyone.
This combination of on-chain ownership and off-chain metadata helps significantly reduce costs, as storing large amounts of data directly on the blockchain can be both expensive and inefficient.
For Solana's cNFTs, metadata is compressed and stored in a manner that significantly reduces the storage requirements on the blockchain while maintaining the integrity of asset information.
