Understanding Compressed NFTs
Compressed NFTs (cNFTs) are a type of Non-Fungible Token (NFT) designed to reduce storage and transaction costs on the Solana Blockchain.
As NFTs become increasingly popular, developers have struggled to optimize storage and reduce minting costs for these digital assets. The Solana Blockchain has introduced Compressed NFTs (cNFTs) to address these challenges.
CNFTs are a new type of Non-Fungible Token that applies state compression technology to store data more efficiently on Solana. Unlike traditional NFTs, which store all Token metadata directly on-chain or through external links (such as IPFS), cNFTs use a Merkle tree to optimize data storage.
In simple terms, while regular NFTs store individual ownership and metadata records on-chain, cNFTs bundle these records into a highly compressed format. This significantly reduces storage costs and improves transaction speeds.
Although this technology is still in its early stages, it has already accounted for a significant portion of NFTs minted on Solana.
Did you know? In March 2023, Crossmint created the first large-scale deployment of Compressed NFTs on Solana. Minting 300K NFTs the traditional way cost over $74K, but with state compression technology, Crossmint reduced this cost to under $200!
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, driving innovation.
Let's explore some of the key features and benefits of cNFTs:
- Cost-Effective: Minting thousands of Compressed NFTs costs only a small fraction of the cost of minting regular NFTs. For example, according to reports from Solana, it takes around 24K SOL to create and mint 1 million traditional NFTs using the standard metadata approach. cNFTs can be organized to mint for as little as 10 SOL or less. This implies that anyone using NFTs at scale can use cNFTs instead of standard NFTs to reduce costs by over 1,000 times. Research from Helius shows the cost comparison with and without NFT compression as follows:
- Scalability: Designed for high-volume use cases like games, social media, and metaverse assets, where thousands or millions of Tokens are needed.
- Flexible On-chain and Off-chain: While ownership is tracked on-chain, much of the metadata can be stored off-chain, continuing to reduce costs without sacrificing utility.
Compressed NFTs offer several standout benefits in the blockchain ecosystem. Their low-cost nature significantly reduces minting and storage expenses, allowing creators and businesses to access blockchain technology without financial barriers.
Additionally, cNFTs contribute to greener blockchain practices by reducing storage demands and, consequently, energy consumption. These attributes position cNFTs as a game-changing potential for scalable, environmentally-friendly, and innovative applications.
Did you know? DRiP on Solana has distributed over 4 million free Compressed NFTs, making it one of the most accessible NFT platforms to onboard new users. This creative approach allows artists to create and share digital art at minimal cost, reshaping how people experience NFTs.
Compressed NFTs vs. Traditional NFTs
While both cNFTs and traditional NFTs aim to tokenize digital assets, their designs and use cases differ significantly.
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 address this issue by using state compression, significantly reducing costs and enabling affordable mass production of Tokens.
Unlike traditional NFTs, which often store all data on-chain, cNFTs shift metadata to off-chain systems, maintaining utility while reducing blockchain storage demands.
Some key differences include:
Traditional NFTs are best suited for high-value, unique digital art. In contrast, Compressed NFTs shine in scenarios requiring high scalability, such as distributing game assets or digital collectibles to millions of users.
How to Mint Compressed NFTs: Step-by-Step Guide
CNFTs utilize state compression and Merkle trees to store data in a lightweight format.
Minting cNFTs initially may seem daunting, but with the right tools and knowledge, it's a straightforward process to issue and distribute them. While each platform will have its own specific guidelines, here is a general guide to get started with cNFTs:
- Step 1: Set up a wallet: Use a Solana-compatible wallet like Phantom or Solflare to manage your assets and interact with blockchain tools.
- Step 2: Fund your wallet: Add SOL (Solana's native cryptocurrency) to cover minting fees. Compressed NFTs (cNFTs) are very cost-efficient, so even a small amount is sufficient.
- Step 3: Choose a minting platform: Platforms like Crossmint, Metaplex, and Candy Machine (on Solana) support cNFTs. Based on your project's scale and features, select one.
- Step 4: Prepare the metadata: Determine the details of your NFT collection, including artwork, description, attributes, and other metadata. Use an off-chain storage solution like IPFS if necessary.
- Step 5: Mint your cNFTs and set up the Merkle tree: cNFTs use a Merkle tree to organize data. Most minting platforms automate this process. Monitor the platform's interface to mint your compressed NFTs. Confirm the transaction through your wallet, and voila - your cNFTs are live!
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.
cNFTs employ a hybrid storage model, balancing 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.
However, much of the asset's metadata, including images or detailed information, is typically stored off-chain. This distributed off-chain storage often utilizes protocols like IPFS to ensure the data is distributed and accessible to anyone.
The combination of on-chain ownership and off-chain metadata significantly reduces costs, as storing large amounts of data directly on the blockchain can be expensive and inefficient.
In the case of Solana's compressed NFTs, the data is compressed and stored in a way that drastically reduces the blockchain's storage requirements while still maintaining the integrity of the asset's information.
