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 the challenge of maximizing storage while 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 via external links (like IPFS), cNFTs use Merkle trees to optimize data storage.
In short, while regular NFTs store individual ownership and metadata records for each token on-chain, cNFTs group these records in a highly compressed format. This significantly reduces storage costs and increases transaction speed.
Although this technology is still in its infancy, it accounts for most 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, fostering innovation.
Let's take a look at some of the key features and benefits of cNFTs:
Cost Efficiency: The cost of minting thousands of compressed NFTs is only a fraction of that for regular NFTs. For instance, according to Solana's report, creating and minting one million traditional NFTs using the conventional metadata path costs approximately 24,000 SOL. cNFTs can be organized so that the same setup and minting cost is 10 SOL or less. This means anyone using NFTs at scale can use cNFTs instead of standard NFTs, reducing costs by over 1000 times. Helius' research shows a cost comparison between compressed 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, much of the metadata can be stored off-chain, further reducing costs without sacrificing utility.
Compressed NFTs offer several notable key advantages within the blockchain ecosystem. They are affordable, significantly reducing minting and storage costs, allowing creators and businesses to utilize blockchain technology without financial barriers.
Additionally, cNFTs contribute to more eco-friendly blockchain practices by reducing storage requirements, thereby lowering energy usage. These attributes make cNFTs potential game changers for scalable, eco-friendly, and innovative applications.
3. Compressed NFTs vs. Regular NFTs
While both cNFTs and traditional NFTs aim to tokenize digital assets, their designs 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 issue by leveraging state compression, significantly reducing costs and enabling affordable token batch production.
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 distinctions include:
Regular NFTs are best suited for high-value, unique digital artworks or collectibles. In contrast, compressed NFTs excel in scenarios that require high scalability, such as distributing game assets or digital collectibles to millions of users.
4. How to Mint cNFTs: Step-by-Step Guide
cNFTs use state compression and Merkle trees to store data in a compact format.
Minting cNFTs may seem daunting at first, but with the right tools and knowledge, it becomes simple to mint and distribute. While each platform has its own instructions, here are some general guidelines to get started with cNFTs:
Step 1: Set Up a Wallet: Use a wallet compatible with Solana (like Phantom or Solflare) to manage your funds and interact with blockchain tools.
Step 2: Fund Your Wallet: Add SOL (the native cryptocurrency of Solana) to cover 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 functionality of your project.
Step 4: Prepare Metadata: Define the details of your NFT collection, including artwork, descriptions, 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 automatically execute this process. Mint your compressed NFT following the platform's interface. Confirm the transaction through your wallet, and voila! Your cNFT is live!
5. Where are Compressed NFTs Stored?
Unlike regular 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. Ownership of cNFTs is always tracked on-chain, ensuring the authenticity and provenance of the assets.
Nonetheless, much of the asset metadata (including images or details) is typically stored off-chain. This decentralized off-chain storage often uses protocols like IPFS to ensure that the data is distributed and accessible to anyone.
This combination of on-chain ownership with 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 way that significantly reduces the storage needs on the blockchain while maintaining the integrity of asset information.
