Golden Encyclopedia | What is compressed NFT? How to mint cNFT?

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

1. Understanding Compressed NFT

Compressed NFTs are a type of non-fungible token (NFT) designed to reduce the cost of storing and transacting with NFTs on the Solana 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 through external links 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 NFT

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

Let’s take a look at some of the main features and advantages of cNFT:

• 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 traditional metadata paths. cNFTs can be organized so that the same setup and minting cost is 10 SOL or less. This means that anyone using NFTs on a large scale can use cNFTs instead of standard NFTs, reducing costs by more than 1,000 times. Research by Helius shows the cost comparison of compressed and uncompressed NFTs, as follows:

• Scalability: Designed for high-volume use cases such as gaming, social media, and Metaverse assets, which 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, eco-friendly and innovative applications.

3. Compressed NFT and regular NFT

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 prohibitive for large-scale adoption. Compressed NFTs solve this problem by leveraging state compression, greatly 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 practicality.

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 are general guidelines for getting started with cNFTs:

• Step 1: Set up a wallet: Use a Solana-compatible wallet such as 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. If necessary, use off-chain storage solutions such as IPFS.

• Step 5: Mint your cNFT and set up the Merkle tree: CNFT uses Merkle trees 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 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, ensuring 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 usually 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.

For 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 asset information.