What are compressed NFTs and minting cNFTs

Understanding compressed NFTs

As a seasoned crypto investor with years of experience navigating the ever-evolving digital asset landscape, I must say that the advent of compressed NFTs (cNFTs) has been nothing short of revolutionary. Having witnessed the rise and fall of numerous trends, I can confidently assert that cNFTs represent a genuine breakthrough in the world of non-fungible tokens.

Compressed NFTs represent a kind of Non-Fungible Token (NFT) specifically developed for lowering the cost associated with their storage and transaction on the Solana blockchain.

As more people start using Non-Fungible Tokens (NFTs), creators often struggle with finding ways to increase storage capacity and reduce the cost of minting these digital items. To tackle these issues, the Solana blockchain has introduced a solution called compressed NFTs (cNFTs).

CNFTs, or compressed non-fungible tokens, are a modern form of NFT that utilizes state compression technology for more efficient data storage on the Solana network. In contrast to conventional NFTs, which either store all metadata directly on the blockchain or via external links like IPFS, cNFTs employ Merkle trees to streamline data management.

Essentially, traditional NFTs keep the ownership details and information of each token on the blockchain individually. However, Compressed NFTs (cNFTs) bundle these details in a highly compact form. This compression method results in lower storage expenses and faster transaction times.

Although the technology is still in its infancy, it accounts for most NFTs minted on Solana.

Did you hear? In March of 2023, Crossmint made history by minting a massive number of compressed NFTs on the Solana blockchain. Normally, minting 300,000 NFTs would set you back around $74,000, but thanks to their state compression technology, Crossmint managed to slash that cost down to just under $200!

Key features of compressed NFTs

Through cNFTs, creators and innovators have the ability to produce vast numbers of tokens, ranging from thousands to millions, at a significantly lower cost compared to conventional NFTs. This reduction in cost encourages increased creativity and advancement.

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

• Cost efficiency: Minting thousands of compressed NFTs costs only a fraction of what it would for regular NFTs. For instance, as per Solana’s report, about 24,000 SOL are needed to create and mint 1 million traditional NFTs utilizing the traditional metadata route. It is possible to organize cNFTs so that the same setup and mint cost 10 SOL or less. This implies that anyone utilizing NFTs on a large scale may use cNFTs instead of standard NFTs to reduce expenses by more than 1000x. Research by Helius shows cost comparison with and without compression NFTs, as seen below:

• Scalability: Designed for high-volume use cases like gaming, social media and metaverse assets, where thousands or millions of tokens might be needed.
• Onchain and offchain flexibility: While ownership is tracked onchain, much of the metadata can be stored offchain, further reducing costs without sacrificing utility.

In the world of blockchain, Compressed NFTs present numerous notable advantages. They drastically reduce the costs associated with minting and storage, making it more economical for artists and businesses to utilize this technology, regardless of their financial resources.

Moreover, Carbon Neutral NFTs (cNFTs) promote more environmentally friendly blockchain practices due to their reduced storage needs and associated energy consumption. This makes cNFTs an exciting prospect as a potential pioneer in large-scale, sustainable, and technologically advanced applications.

Did you realize? DRiP on Solana has handed out more than 4 million free, compressed NFTs, positioning it as one of the most welcoming NFT platforms for newcomers. This groundbreaking method enables artists to produce and disseminate digital art at low costs, thereby altering the way people interact with NFTs.

Compressed NFTs vs regular NFTs

While both cNFTs and traditional NFTs aim to tokenize digital assets, their design and use cases differ significantly. 

Non-Fungible Tokens (NFTs) are often recognized for their unique and exclusive qualities, but the cost associated with creating them and storing them can be excessively high when it comes to widespread use. The solution to this issue is Compressed NFTs, which take advantage of state compression, significantly lowering costs and making it feasible for a large number of tokens to be produced affordably.

Rather than keeping all their information directly on the blockchain like conventional NFTs do, Collectible NFTs (cNFTs) transfer metadata to external systems. This approach retains usefulness while reducing the need for extensive blockchain storage.

Some key differences include:

In simpler terms, standard NFTs are ideal for unique and valuable digital works like art and collectibles. Conversely, compressed NFTs perform optimally when it comes to mass distribution tasks, such as dispersing game items or digital collectibles to a large number of people.

How to mint cNFTs: A step-by-step guide

CNFTs use state compression and Merkle trees to store data in a compact format.

Creating cNFTs might initially appear challenging, but with the correct resources and understanding, it’s actually a simple process to create and disseminate them. Although each platform may offer unique guidelines, I’ve provided a basic outline to help you kickstart your journey into 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 the cost of minting. CNFTs are highly cost-efficient, so even small amounts are sufficient.
• Step 3: Select a minting platform: Platforms like Crossmint, Metaplex and Candy Machine (on Solana) support cNFTs. Based on your project’s scale and features, choose one.
• Step 4: Prepare metadata: Define the details of your NFT collection, including artwork, descriptions, attributes and other metadata. Use offchain storage solutions like IPFS if needed.
• Step 5: Mint your cNFTs and set up a Merkle tree: CNFTs use Merkle trees to organize data. Most minting platforms automate this process. Follow the platform’s interface to mint your compressed NFTs. Confirm transactions through your wallet, and voila — your cNFTs are live!

Where are compressed NFTs stored?

In contrast to traditional NFTs, Content-Based NFTs (cNFTs) have their Merkle root details stored directly on the blockchain, while the individual data points, or “leaves,” are kept off the blockchain instead.

As a researcher delving into the world of Non-Fungible Tokens (CNFTs), I find that these innovative assets employ a storage model that cleverly combines on-chain and off-chain storage. This design strikes an optimal balance between cost efficiency and scalability, making it a practical choice for the future. Crucially, ownership of each CNFT is meticulously recorded on the blockchain, ensuring its authenticity and tracing its origin – a vital aspect that guarantees the asset’s provenance.

Even though most of an asset’s metadata, such as images or comprehensive details, is usually saved elsewhere, this off-chain storage is often decentralized and relies on systems like InterPlanetary File System (IPFS) to make sure the data is distributed across various locations. This allows anyone to access the information easily.

By linking on-blockchain ownership with off-blockchain information, we can substantially cut costs. Directly storing vast data sets on the blockchain is often costly and inefficient due to the high expenses associated with it.

For Solana’s Collectible NFTs (cNFTs), the metadata is compacted and saved in a manner that significantly decreases the storage requirements on the blockchain, all while keeping the essential data about the asset intact.