This is a one-stop resource for you to get up to speed with the state of cNFT (compressed NFTs) adoption on Solana.

You’ve heard of NFTs. They’re the Bored Yacht Apes, the Cryptopunks, the DeGods, the SMBs. We’ve seen experimentations of NFTs unfold, from non-profit fundraising to token-gated access; from empowering agriculture supply chains to providing fun and access to events/communities; and we’ve seen them cut through the music industry and the traditional art houses (Sotheby’s, Christie’s, MOCO, etc.). NFTs are important to the blockchain space because they’re the second major use case that found product market fit within blockchain technologies after crypto.(1)

By now, it’s dumb to think NFTs are all scams–– especially when we’re now in an era of ‘compressed NFTs’, or, cNFTs. Throughout this article, I’ll explore the state of cNFT adoption in the Solana ecosystem with you, because what they mean for the culture of creation onchain, and possibly real world assets (RWA), is something we cannot ignore leading up to the next bull run. We can’t fumble the bag again. 🤦🏽‍♀️

But first, WTH is a cNFT– and who created them? 🤔

Here’s the definition of cNFT presented by Will Smith:

cNFT is basically the love child of two gigabrains in Solana: Solana Labs and Metaplex.👨‍👨‍👦 Through the combined creation of Solana Labs’s Merkle tree program (aka account-compression) and Metaplex’s compressed NFTs program (called Bubblegum), cNFTs were born. 💕

Long story short, the Merkle tree program (why does this sound so festive lol?! 🎄) enables compressed NFTs created via Metaplex to be encoded into the Solana blockchain. They store metadata and other info (like who the owner is) in a Merkle tree, which is different to normal NFTs which store their data onchain. FYI- a Merkle tree is basically just a data structure that allows you to verify large amounts of data quickly and efficiently. It breaks data down into smaller pieces called 🍃 “leaves” 🍃 then it gets more technical after that so ask Mert. 🤣

Why were cNFTs created?

This is why cNFTs matter, compiled from at least 7 sources and compressed into top 3 reasons 😜:

1. CHEAPER ➡️ Makes enterprise-level activity cheaper to help serve web2 and web3 enterprise customers who want to activate millions or even billions of users. In fact, many cNFTs are free, and this removes entry barriers for newbies.

   This dramatic improvement in cost will reshape the industry by widening use cases across the board (more on this later, keep reading! 📌).

2. EFFICIENT ORGANISATION ➡️ cNFTs are specifically associated with Metaplex Certified Collection (MCC), meaning cNFTs adhere to a set of standards/certification provided by the Metaplex platform. This gives a standardised and organised way in which cNFTs are managed and intricately linked through the ecosystem.

3. SCALE ➡️ Because it’s cost-effective, it means that it’s easier to scale the content creation. cNFTs harness Solana’s state compression, facilitating the minting of up to 1 MILLION NFTs for hella cheap prices. In the words of Jay Z, “Ball so hard, this shit crazy.”

Here’s the math so far:

It allows founders, operators, and creators to experiment with their product, services, and/or art. This leads to better chances of succeeding and capturing user attention, and this level of attraction organically brings in people who want to build more products, tools and use cases to service potential users and intrigued, hyped communities.

What can cNFTs be used for?

This brings us to the use cases of cNFTs right now.

1. Starting with Drip Haus. 💧🏠 A project which allows creators to mint and airdrop NFTs, providing collectibles every week from Solana’s favorite creators. FOR FREE!

Drip leverages cNFTs by rewarding loyal users and talented creatives at a minimal cost. By joining Drip you’ll get all kinds of NFTs, access to rich collections, art with utilities, and maybe some phygitals too. The platform has minted over 36 million collectibles, witnessed 1.2 million sales on secondary markets, and +500,000 members/users. Through cNFTs, Drip Haus has shown us how to mint and distribute in vast quantities at a large scale– all in the name of access, frictionless onboarding, and community. (2)

2. The other is a rather unique and daring use case: Solarplex. 🌞🔗 It’s a social app for the Solana ecosystem, connecting builders, creators, users, and other community members to discover and develop one another. In it, you can:

• Discover cutting-edge projects, news, and resources in the Web3 ecosystem

• Test products with real users and get high-quality user feedback

• Transform ideas into NFTs in a flash

With Solarplex, creating an NFT is as simple as tweeting and collecting one is as simple as hitting the like button! ⚡

This wouldn’t have been doable before with normal NFTs because the cost would’ve been hiiiiiiiiiigh! But with compressed NFTs, they’re able to drop/send NFTs to daily active users. This is actually pretty cool because then you’re kinda bringing your “tweets” onchain and curating your own community via the cNFT content/”tweets” you’ve l̶i̶k̶e̶d̶ minted.

3. Dialect is another. 📲 💬

A first of its kind chat experience, Dialect is a blockchain-based mobile messaging tool, leaning hard into compression NFTs to power its interactive messaging functionality. They’re showcasing the innate social nature of NFTs.

You know how we’re able to preview rich media or open other texts through links? 🔗

Dialect’s ‘smart messaging’ does that for web3 so you can interact and engage with other users directly.Most recently, they introduced the feature of minting and sharing stickers directly within the messaging platform.

Before compression NFTs, Dialect would’ve had to either:

1. Bear the full cost of transactions to enable in-platform NFT mints or

2. Transfer those costs to the user.

Both of those options are huge Ls. 👎🏾

And more importantly, they’re huge barriers for builders attempting to make NFTs available on a massive scale and definitely not something artists/creators would appreciate.

Now, cNFTs make this possible. Their compressed state dramatically lowers minting costs and users can– pretty much freely– share NFT stickers on a mass scale with one another in a fun and engaging way. (3)

4. Helium has been a prominent test/use case as well. 🎈🤝🏽

Dubbed as #The PeoplesNetwork, Helium migrated to Solana earlier in the year (~April) and they were able to mint 1M hotspots as NFTs. 🤯 This means that each hotspot on the crypto wireless network is now represented by an NFT. (4)

Minting that many NFTs on Solana would’ve typically cost an approx. $250,000+ worth of SOL. But because of the state compression of cNFTs, Helium was able to mint 1,000,000 NFTs, the process cut the minting cost to about $113 worth of SOL.

BRUUUH, how?!

5. Picolo is super fun. 🔳♟️

…And powered by cNFTs. You can play Chess daily to win fun rewards and you can collect an NFT that has a timestamp and the number of attempts you made before winning. Can’t fake that I’m a grandmaster anymore! 😅

By combining exclusive weekly collectible drops and incentivising players to keep daily streaks, Picolo is a great way to utilise the technology of cNFTs while engaging a community through creative play.

6. And of course, MOB Studios. 💪🏼🔌

They’ve grown from an NFT project that has continued to evolve over the years, and they’ve chosen to leverage the functionality of cNFTs through Redeemables. Redeemables allow you to buy digital items linked to physical counterparts (phygitals), which can be traded or ‘burned’ to redeem the physical item directly from the brand or manufacturer.When I asked @Uzy100x why they decided to use cNFTs for Redeemables even though their pfp collection are legacy NFTs, he shared the following reasons:

• Low cost and fast speed of creation and distribution at scale makes this perfect for larger audiences and making these available to the masses

• The ability to enforce royalties means businesses/partners know they’ll share royalties from secondary transactions (incentivises them towards SOL and cNFTs over other chains as it protects their interest and allows monetisation)

• The carbon footprint of each transaction is the equivalent to that of 2 Google searches, so mass adoption can really make a positive environmental impact especially where Redeemable changes the supply chain process

Who is powering all of these dope use cases?

All of these super cool things I listed are just the beginning, fam. There are so many different ways to engage people through cNFTs that won’t be possible if there aren’t any tooling platforms/services making all of this happen. cNFT tooling in the Solana ecosystem makes it easy to enable frictionless minting and distribution of compressed NFTs.

TipLink seems to be a favourite. Making a huge feature in this year’s (2023) Breakpoint, where they showcased how to transfer digital assets as easy as sending a link (the link is the wallet!), programmed to generate and hold tokens and NFTs at scale with our their API.

Underdog Protocol is also providing promising ways to seamlessly integrate compressed (and all type of Solana NFTs) using their API and no-code tools.

This platform offers a suite of tools for managing cNFTs, including mass airdrops with no code and creating storefronts to help with claiming, distribution, buying of digital goods.

And of course an honourable mention for Metaplex. The open-source framework of Metaplex and the Bubblegum programme have continued to expand more ways for cNFT-based applications. By empowering devs to leverage the benefits of cNFTs, Metaplex’s API further unleashes the power of compression across several areas: (5)

• Improves the reliability of data by standardising NFT data

• Improves speed and lowers costs of NFT data queries by not relying on the resource-intensive methods

• Reduces hardware costs over time

The state of cNFTs tooling across Solana is positive and growing. As more of these platforms continue to provide creative approaches to tools, the more beneficial it will be for the Solana ecosystem holistically. We’re already starting to see more engagements and use-friendly involvement across digital assets as the innovative solution to large-scale distribution and creation of NFTs continue to evolve through cNFT-powered applications and services.

Can we quantify the state of cNFTs adoption?

The quick answer is:

Let’s break down the numbers.

⭐ Weekly cNFTs minted: ~3,000,000 a week! (6)

• Almost** 45 million **cNFTs were minted in Q3, a 316% QoQ increase. Drip Haus accounted for 87.5% of these mints, followed by Dialect and Helium. (7)

⭐ Unique users who hold cNFTs:

• Drip Haus facilitated the minting of over 40 million cNFTs across diverse collections, reaching more than 1.2 million unique wallets.

• Dialect has minted over 2.15 million cNFTs, spread across 100 distinct sticker packs.

• During early Q2 of 2023, there were more than 332,000 unique holders of Helium’s cNFTs (claimed from over 991,000 NFTs on offer) according to data compiled by Flipside Crypto. (8)

⭐ Associated costs:

• On Solana (with compression), it will cost around 0.0000005 SOL per NFT, so about $11,000 USD for a billion NFTs. That is ~50 million dollars or about three orders of magnitude cheaper.

• According to this tweet, between Drip, Dialect, and Helium, the minting cost only reached $30,000 USD!

• There are tools like this that can help calculate the costs of how many compressed NFTs would cost to store, as well.

• There some discrepancies on how much cNFTs are reducing costs. There’s no argument that they are reducing them dramatically, but perhaps some numbers are not as accurate as they could be. Here’s an example when @redacted_noah disputed cNFTs minted with Metaplex crossed 6.9M but only cost ~$1,000 USD to mint.

⭐ Marketplace volume:

Here are more insights into legacy NFTs traded volume in the last 24 hours across 6 platforms (as shown via Tensor’s comparative table on the bottom left corner):

How do cNFTs compare to legacy NFTs?

It seems like the state of cNFTs adoption in Solana is increasing more and more. While legacy NFTs still continue to dominate in popularity amongst pfp collections, trading activities on marketplaces like Tensor, the technology driving the cheap costs of cNFTs and their ability to mint in such massive numbers is definitely catching the attention of certain communities in Solana.

Here are a some stats on how the Top 10 trending NFT collections on Tensor compare to the Top 10 trending cNFT collections in the last 24 hours (December 17 2023):

And here are some more deeper technical numbers of NFTs vs cNFTs sales overtime:

Of course, compressed NFTs were only introduced early this year and there’s still room for it to grow against legacy NFTs (they’ve had a head start in the last couple of years anyway). But with the likes of @vibhu from Drip pushing hard on the use case and argument for cNFTs as “Trad NFTs as a format are dying fast”, a pretty drastic comparison in numbers can’t be ignored:

❗ In August 2023, 98.5k NFTs were minted vs. 15.68 million cNFTs ❗

With these numbers and rate of adoption and application, I present these types of communities that have merged since the creation of cNFTs. They all have different interests and goals and so it’s important to note that subcategory, or subcommunity, will view the impact and effects of compressed NFTs in their own way.

The future of cNFTs looks high key interesting 👀

People are now looking to build beyond the use cases of legacy NFTs that creators, builders, and founders have found a barrier with. Different types of things are now being built on compression through art, memes, gaming, etc.

For example:

Games who want to distribute 1,000 digital game assets to X amount of users, and they want to do it monthly for free.

Trad NFTs simply can’t do that.

The future of NFTs on Solana, in my opinion, is not through the impact of 10k pfp collections– it’s through the power of state compression.

Here are some of my real world suggestions– not limited to just art– that take into consideration the possibility of large scale, cheap distribution of NFTs that weren’t possible before:

1. Digital Ticketing and Event Loyalty Programs 🎟️Event organisers, concert venues, and entertainment companies can issue cNFTs as digital tickets for concerts, shows, or events. Either as POAPs or a way to create loyalty and rewards programs by associating specific benefits or perks with the cNFTs.

   ✅ This won’t limit NFTs being available to just a few hundred people who can afford it. Compressed NFTs enable a cost-effective way to manage digital ticketing systems at scale and allows accessibility. They can be easily distributed, verified, and redeemed, providing a seamless experience for event attendees.

2. Educational Certificates and Credentials 👩🏽‍🎓Universities and schools can issue cNFTs as digital certificates and credentials to students upon completion of courses or degrees, making it easier to access their grades when filling out job forms through a wallet instead of physical papers or via emails that get lost.✅ These cNFTs also ensures that grades and credentials can’t be forged. The reduced cost of using compressed NFTs makes this a viable solution for educational institutions of all sizes and to thousands of students.

3. Medical Supply Chain and Product Authenticity 💊Brands can use compressed cNFTs to track and verify the authenticity of products within the supply chain. Each product can be associated with a unique compressed NFT that contains information about its origin, manufacturing details, and distribution history.

   ✅ It’s feasible to implement this solution across a wide range of products because of cNFTs and by doing so enhances transparency in the supply chain, reduces the risk of counterfeit meds, and provides patients with a trustworthy way to verify the authenticity of their medicines.

4. Podcasts and audio distribution 🎧Personally, I’d also like to see podcasts and audio distributed as cNFTs throughout the ecosystem. Podcasters can leverage cNFTs to transform the distribution landscape for audio content (see the likes of Ohr experimenting with audio for social media). ✅ Each podcast episode can be represented by a unique cNFT, offering several advantages for creators and listeners. Reducing overall distribution costs for compared to traditional methods is obvious, but cNFTs can also unlock new community engagement e.g. create limited-edition cNFTs tied to specific episodes, creating a tangible and collectible element for listeners.

So, what does this all mean as far as the adoption and impact of cNFTs in Solana? 🤩

The emergence of cNFTs on the Solana stands out as a revolutionary development, tbh. As we’ve explored together through this overview, cNFTs aren’t just a fleeting trend– it’s low key become a significant evolution in the Solana NFT space.

The state of cNFT adoption on Solana reflects a growing and dynamic ecosystem that has embraced the efficiency and cost-effectiveness of compressed NFTs, while allowing floods of new opportunities for creators, devs, collectors, founders, and the entire community. This innovation is reshaping the way we think about how digital assets can be created, distributed, and experienced.

As cNFTs continue to gain traction and demonstrate their potential across use cases, the Solana ecosystem is witnessing a paradigm shift in not just how different communities are being formed through cNFTs, but also in how we’re approaching and exploring ways the technology can be tested and trialed.

The impact of cNFTs extends beyond the blockchain, influencing real-world scenarios and opening up new possibilities for– dare I say– mass adoption…like actually this time.

The future of cNFTs on Solana appears promising, and it’s redefining the narrative around Solana NFTs in contrast to ETH ones. Lol. Especially since now other-chain maxis are clocking onto the great things SOL is doing, in the broader context of digital culture and web3 enterprises, the state compression has paved a new path for others to be bullish on Solana. #OPOS 🧬

REFERENCES:

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OTHER RESOURCES USED ARE OUTLINED IN THE BOUNTY HERE.