Author: Shailey Singh, CoinTelegraph; Compiler: Deng Tong, Golden Finance

1. Decompressing NFT

Compressed NFT is a non-fungible token (NFT) designed to reduce the cost of trading in the Solana area The cost of storing and transacting with NFTs on the blockchain.

As the adoption of NFTs continues to increase, developers are faced with the difficulty of maximizing storage and reducing the cost of minting these digital assets. The Solana blockchain introduces compressed NFTs (cNFTs) to overcome these challenges.

CNFT is a newer non-fungible token that utilizes state compression technology to store data more efficiently on Solana. Unlike traditional NFTs, which store all token metadata directly on-chain or via an external link such as 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 speeds.

While the technology is still in its infancy, it accounts for the majority of NFTs minted on Solana.

2. Main 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, thereby promoting innovation.

Let’s take a look at some of the key features and benefits of cNFTs:

Cost-Effectiveness: Minting thousands of compressed NFTs costs a fraction of regular NFTs. For example, according to Solana’s report, it would take approximately 24,000 to create and mint 1 million traditional NFTs using the traditional metadata path. cNFTs can be organized so that the same setup and minting cost is 10 SOL or less. This means that anyone using NFTs at scale can use cNFTs in place of standard NFTs, reducing costs by over 1000x. Helius' research shows the cost comparison of compressed and uncompressed NFTs, as follows:

Scalability: Designed for high-end games, social media, and Metaverse assets Designed for capacity use cases 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 key advantages that stand out in the blockchain ecosystem. They are affordable and significantly reduce minting and storage costs, allowing creators and businesses to use blockchain technology without financial barriers.

Additionally, cNFTs contribute to greener blockchain practices by reducing storage requirements and thus energy usage. These properties make cNFTs a potential game-changer for scalable, environmentally friendly and innovative applications.

3. Compressed NFTs vs. regular NFTs

While cNFTs and traditional NFTs both 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 prohibitive for large-scale adoption. Compressed NFTs solve this problem by leveraging state compression, significantly reducing costs and enabling affordable mass production of tokens.

Unlike traditional NFTs, which typically store all data on-chain, cNFTs offload metadata to off-chain systems, minimizing blockchain storage requirements while maintaining utility.

Some key differences include:

Regular NFTs are best suited for high-value, one-of-a-kind digital artwork or collectibles. Compressed NFTs, on the other hand, excel in scenarios that require high scalability, such as distributing game assets or digital collectibles to millions of users.

4. How to Mint cNFT: A Step-by-Step Guide

CNFT uses state compression and Merkle trees to store data in a compact format.

Minting cNFTs may seem difficult at first, but with the right tools and knowledge, minting and distributing them is simple. While each platform has its own instructions, here is a general guide to getting started with cNFTs:

Step 1: Set up a wallet: Use a Solana-compatible wallet like Phantom or Solflare to manage your funds and interact with blockchain tools.

Step 2: Fund your wallet: Add SOL (Solana’s native cryptocurrency) to cover minting costs. CNFT is highly cost-effective, so even small amounts are sufficient.

Step 3: Choose a minting platform: Platforms such as Crossmint, Metaplex, and Candy Machine (on Solana) support cNFTs. Choose one based on the size 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 needed.

Step 5: Mint your cNFT and set up a Merkle tree: CNFT uses a Merkle tree to organize data. Most casting platforms automate this process. Follow the platform’s interface to mint your compressed NFT. Confirm the transaction via your wallet and voila! Your cNFT is now online!

5. Where are compressed NFTs stored?

Unlike ordinary NFTs, in cNFTs, Merkle roots are stored on-chain, while Merkle leaves are stored off-chain.

CNFT utilizes a hybrid storage model that balances on-chain and off-chain storage to ensure cost efficiency and scalability. Ownership of cNFTs is always tracked on-chain, ensuring the authenticity and provenance of the asset.

Nonetheless, most of an asset’s metadata, including images or details, is typically stored off-chain. This kind of decentralized off-chain storage often uses protocols such as 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 expensive and inefficient.

With Solana’s cNFTs, metadata is compressed and stored in a way that greatly reduces the storage requirements of the blockchain while maintaining the integrity of the asset information.