WHAT ARE COMPRESSED NFTS?

Compressed NFTs (cNFTs) are a new form of non-fungible token (NFT) designed to lower the costs associated with storing and transacting NFTs on the Solana blockchain.

As NFTs continue to gain popularity, developers face challenges in optimizing storage and reducing minting costs for these digital assets. To address these issues, the Solana blockchain introduced cNFTs, a more efficient alternative.

cNFTs utilize state compression technology to store data more effectively on Solana. Unlike traditional NFTs, which store metadata directly on-chain or through external links like IPFS, cNFTs leverage Merkle trees to improve data storage.

In essence, while conventional NFTs store individual ownership and metadata for each token directly on-chain, cNFTs group this information into a compressed format. This reduces storage costs and enhances transaction speed.

Though still in its early stages, cNFTs have already become the dominant form of NFTs minted on the Solana blockchain.

With cNFTs, artists and developers can mint thousands, or even millions, of tokens at a fraction of the cost compared to traditional NFTs, encouraging greater innovation.

Here are some key features and benefits of cNFTs:

• Cost Efficiency: Minting large quantities of compressed NFTs is much cheaper than creating standard NFTs. For example, according to a Solana report, it would typically take about 24,000 SOL to mint 1 million traditional NFTs using the conventional metadata approach. However, cNFTs can be organized in a way that allows the same quantity to be minted for just 10 SOL or less. This cost reduction of over 1000x makes cNFTs a more affordable option for those looking to scale their NFT projects. Helius research also provides a comparison between the costs of traditional NFTs and cNFTs.

• Scalability: cNFTs are designed for high-volume applications, such as gaming, social media, and the metaverse, where there’s a need for thousands or even millions of tokens.

• Onchain and Offchain Flexibility: While ownership information is recorded on-chain, much of the metadata can be stored off-chain. This reduces costs even further, without compromising functionality.

Compressed NFTs provide significant advantages in the blockchain space. Their low minting and storage costs open the door for more creators and businesses to use blockchain technology without the financial burden.

Furthermore, cNFTs help promote more eco-friendly blockchain practices by reducing storage demands, which in turn lowers energy consumption. These qualities make cNFTs a potential game-changer for scalable, cost-effective, and environmentally sustainable applications.