Minting More Than JPEGs

Explore Solana’s NFT Revolution

Table of Contents:
1. The Story of the Evolution of NFT Standards
2. Nfts and Nft Standards Demystified
3. Major Protocol/Framework on Solana — their Benefits, Drawbacks, and Cost Analysis
4. Future of NFTs and Outlook on the Solana Ecosystem

What’s this Article All About?

It’s about the ever-evolving world of NFTs, understanding the current standards and on-chain implementations is crucial for both enthusiasts and investors. This article aims to provide a detailed analysis of prominent NFT standards (i.e. nft/pNFT/cNFT/ephNFT/Wns), On-chain implementations, and the major Nft Protocol on Solana (i.e. Libreplex, Metaplex, Metame), their benefits, drawbacks, and associated costs.

The Story of the Evolution of NFT Standards

In the early days of the digital realm, NFTs began on Ethereum with the ERC-721 standard, enabling the creation of unique digital assets. The ERC-1155 standard emerged for greater flexibility, allowing both unique and multiple copies of assets — ideal for games and collectibles

SOLANA entered the scene with the SPL standard, prioritizing speed and low transaction fees for NFTs while the Wen New Standard (WNS) offers enhanced possibilities for fractionalization and community governance.

New standards like pNFTs (separating NFT aspects), cNFTs (NFTs built from NFTs), ephNFTs (time-limited NFTs), and the WNS are expanding creative possibilities. Standards streamline NFT creation, promote compatibility across marketplaces, and often offer better security.

The NFT space is rapidly evolving, with the potential for older standards to become less relevant as innovation continues.

Nfts and Nft Standards Demystified

NFTs (Non-Fungible Tokens)

The basic NFT standard on Solana represents unique tokenized digital assets. An NFT is distinguished from a regular fungible SPL token in that each NFT is unique and not interchangeable. NFTs enable digital scarcity and ownership of digital items like art, collectibles, virtual land, etc.

For starters, standards are like the format for those trading cards. Do they focus on single items? Can they be bundled together? How do you track ownership transfers? These rules keep everything organized.-0xmarkdams

pNFTs (Programmable NFTs)

Programmable NFTs (pNFTs) on Solana are a new standard that redefines digital art, ownership, and royalties in the web3 space. They empower NFT artists and creators by allowing them to enforce royalties and maintain better control of their work.

The pNFT standard was proposed by Metaplex, a collective of Solana blockchain innovators. Unlike other NFTs under the Metaplex Token Standard, pNFTs feature a ‘frozen’ Token Account, which is transferable, burnable, or lockable only via Metaplex’s Token Metadata Program.

Moreover, pNFTs come with rule sets validated by the Token Metadata Program throughout the token’s lifecycle. These validation measures enable creators to include Programs and Accounts in allow/deny lists, offering them absolute control over NFT interactions. Creators can limit transfer permissions to royalty-paying Programs, exclude known royalty evaders from receiving or holding their NFTs, and ensure that any action not meeting the ruleSet standards won’t be executed.

On-chain implementation

Solana’s flexibility and speed make it a popular platform for pNFT development. Here’s how they typically work:

• Metaplex Standard: Metaplex is the dominant NFT protocol on Solana. It provides a framework for creating pNFTs, including instructions for features like royalty enforcement and metadata updates.
• Rules and Logic: Developers embed the desired rules and behaviors for the pNFT into the smart contract code. This code is stored on the blockchain along with the NFT itself.
• Triggers: External events (like a sale, an interaction with a game, or a date) can trigger the code to execute, changing the NFT’s properties or controlling access

cNFTs (Compressed NFTs)

Compressed NFTs represent a revolutionary advancement in NFT technology, built upon the Solana blockchain. They harness the power of “state compression” and Merkle trees to condense the data associated with an NFT into a compact “hash” or “fingerprint” securely stored on the Solana ledger. This innovative approach allows for the creation, distribution, and management of NFTs in an unprecedented manner.

Furthermore, cNFTs leverage cryptographic techniques to efficiently store and verify large amounts of data on the blockchain. Two key concepts in this process are hashing and Merkle trees:

• Hashing: This is the process by which an input, such as an NFT’s metadata or associated media file, is converted into a fixed-size string of bytes known as a hash. Each hash is unique; even a slight alteration in the input leads to a vastly different hash, making it nearly impossible to deduce the original input from the hash alone.
• Merkle trees: This is a data structure that is used to store hashes of the individual pieces of data in large datasets in a way that allows for efficient and secure verification of the contents of the dataset. Every piece of data (called a leaf) is hashed and then paired with another hash to create a new hash. This process is repeated until only one hash is left, called the root. The root hash is used to verify the integrity of the data.

Merkle trees data structure — the bottom-level nodes (leaf) represent individual data items or transactions. These leaves are then paired up and hashed.

Implementations On-chain

Here’s a simplified breakdown of how cNFTs work on the Solana chain:

1. NFT Metadata: The creator assembles the NFT’s metadata as usual (image, name, etc.).
2. Merkle Tree Magic: The full NFT data is structured into a Merkle tree. The system calculates a unique hash (called the Merkle root), which acts as a digital fingerprint representing the entire dataset.
3. Compressed Storage: The Merkle root is stored on-chain in a Solana account. The larger NFT data lives off-chain, but it remains securely linked to the on-chain data.
4. Verification: Anyone can verify that a particular piece of off-chain data belongs to the original NFT by using the Merkle root and cryptographic proofs.

For example:

The implementation of compressed NFTs on Solana’s mainnet-beta is powering the next wave of novel on-chain product experiences. Compressed NFTs are 2,400–24,000x cheaper than their uncompressed counterparts, while still retaining identical structures. Now minting $100 million NFTs on Solana costs only $50.

“Instead of storing data in accounts (expensive), compression lets you store it on the Solana ledger (cheap).” -0xmarkdams

Wen New Standard (WNS)

Wen New Standard (WNS) is a new generation of tokenized assets on Solana, powered by Token Extensions. It is a fully open-source framework for minting NFTs and paying royalties to the creators of those NFTs. WNS extends the Token Extensions program, efficiently integrating its features into the heart of Solana’s core functions. It offers the lowest mint cost on the market, fully refundable, embedded royalty distributions, and much more.

Implemented Roles on-chain

1. Mint Authority: The entity (wallet or program) that has the authority to create (mint) new tokens of a particular NFT.
2. Update Authority: The entity (wallet or program) with the power to modify the NFT’s metadata (name, symbol, image link, etc.).
3. Freeze Authority: The entity (wallet or program) capable of freezing an NFT, preventing its transfer.
4. Built on Token2022: WNS utilizes Solana’s token standard, ensuring compatibility with numerous wallets, platforms, and future developments within the Solana ecosystem.

For example:

AssetDash, a leading portfolio tracker, achieved a groundbreaking feat by minting the first-ever PFP collection named “Elements” on the WNS NFT Standard. This highlights a crucial milestone for the progress of the WNS standard.

ephNFT (Ephemeral NFTs)

Ephemeral NFTs (ephNFTs) on Solana are a type of Non-Fungible Token (NFT) that has a time-limited lifespan. This means that these NFTs expire after a specific duration, such as 24 hours. This unique feature opens up new possibilities for use cases where temporary ownership is required.

On-chain Implementation

Here’s how ephNFTs are typically implemented on the Solana Chain:

1. Expiry Mechanism: The most crucial part of an ephNFT is the logic for its expiry. There are two main ways to achieve this:

• Block-based: The smart contract stores a specific block number or timestamp at which the NFT becomes invalid. The blockchain itself enforces this expiry.
• Oracle-based: An external oracle (a data feed) provides real-world time data. The smart contract triggers the NFT’s expiry based on this information.

2. Functionality During Validity: While valid, an ephNFT can function like a regular NFT. It may offer ownership rights, access permissions, or other features.

3. States Post-Expiry: What happens to an ephNFT after it expires?

Here are some possibilities:

• Deletion: The NFT is simply removed from the blockchain.
• Transformation: The NFT could morph into a commemorative asset or ‘tombstone’ that represents its past use.
• Community Governed: The NFT holders could potentially vote to extend the life of the NFT if its use case is still relevant.

How ephNFTs Could Work on Solana

Here’s a conceptual outline of how you might implement ephNFTs on Solana. There isn’t a standardized way yet, so this involves some creative thinking about how to leverage Solana’s features:

1. NFT Metadata

• Include an expiry or validUntil field in the NFT's metadata to store the expiration timestamp.

2. Smart Contract Logic

• Minting: When minting the ephNFT, set the expiration timestamp in the metadata.
• Validation: Create functions within the NFT’s smart contract to check if the current timestamp exceeds the expiration time. If so, the NFT becomes invalid, and relevant actions are taken (e.g., denying access, removing the NFT from a user’s wallet).

3. Expiration Mechanisms

• On-Chain Timer: Maintain a timer within the smart contract that triggers expiration actions when the time limit is reached (potentially resource-intensive).
• External Oracle: Use an Oracle service to provide the current timestamp and trigger the expiration logic within the smart contract.

Below is a simplified example of an ephemeral NFT smart contract on Solana — This contract allows users to mint an NFT that expires after a specific duration (e.g., 24 hours).

// Solana smart contract for an ephemeral NFT
use solana_program::{
    account_info::AccountInfo,
    entrypoint,
    entrypoint::ProgramResult,
    msg,
    pubkey::Pubkey,
};

// Define the NFT struct
#[derive(Debug, BorshSerialize, BorshDeserialize)]
struct EphemeralNFT {
    owner: Pubkey,
    expiration_timestamp: u64, // Unix timestamp when the NFT expires
    // Add other metadata fields as needed
}

// Entry point for minting an ephemeral NFT
#[entrypoint]
fn mint_ephemeral_nft(
    accounts: &[AccountInfo],
    expiration_timestamp: u64,
) -> ProgramResult {
    // Validate expiration timestamp (e.g., ensure it's in the future)

    // Create the ephemeral NFT
    let nft = EphemeralNFT {
        owner: *accounts[0].key,
        expiration_timestamp,
    };

    // Save the NFT data to the account (you'll need to handle serialization)

    msg!("Ephemeral NFT minted successfully!");
    Ok(())
}

Users call the mint_ephemeral_nft function, passing the desired expiration timestamp.

Major Protocol/Framework/Project on Solana — their Benefits, Drawbacks, and Cost Analysis

“Think of these as the card companies that make and facilitate the trade of your NFTs. They provide secure marketplaces, tools to create NFTs, and ways to manage them.”-0xmarkdams

Let’s explore them start with:

Metaplex

The most widely used NFT platform on Solana(which recently announced new standards called Core), with over 5 million NFTs minted. Metaplex utilizes the cNFT and pNFT standards.

Each creator has a Verified attribute that, when True, guarantees the token was signed by that creator. Each creator also has a Share attribute that can be used by marketplaces to distribute royalties. Source

Benefits

Fast and cheap transactions:Solana can process up to 50,000 TPS with fees less than $0.01, making minting and trading NFTs very fast and inexpensive.

Easy to use: Metaplex provides a standardized NFT minting and selling process that abstracts away blockchain complexity. This makes it easy for anyone to mint and sell NFTs without coding.

Support for token standards: Metaplex supports the SPL NFT standard used on Solana as well as the ERC-721 standard for cross-chain compatibility.

Decentralized exchange: Metaplex has a built-in decentralized NFT exchange allowing for trading without a centralized platform taking fees.

Large ecosystem: As one of the leading NFT platforms on Solana, Metaplex benefits from the network effects of its large community of users, projects and developers.

Drawbacks

Still maturing tech: As an emerging L1(layer 1) blockchain, Solana and Metaplex are still maturing and working through technical issues as adoption grows. Experienced some network outages in 2022.

Limited functionality: Compared to Ethereum’s NFT platforms, Metaplex has more basic functionality. Advanced features like lazy minting or bidding auctions are still in progress.

Centralization risks: Due to Solana’s reliance on fewer but more powerful validators, there are centralization concerns that could impact censorship resistance.

Cost Analysis

Minting a 10,000 NFT collection on Metaplex would cost around 5–10 SOL in total ($500-$1000 at current prices), making it extremely cheap compared to the $100,000+ it would cost to do so on Ethereum.

Trading those NFTs would incur negligible transaction fees of 0.00000005 SOL per trade ($0.0005).

The effectiveness of compression techniques in reducing the storage costs associated with NFT collections on the Solana blockchain.Source

Libreplex

It is an open-source alternative to Metaplex, aiming to provide more decentralized NFT infrastructure. Moreover, Libreplex is a relatively new NFT protocol for Solana. It distinguishes itself by aiming to be creator-friendly, offering royalty flexibility and customization tools for NFT collections. (explore Libreplex libraries)

The differences in features and costs between Libreplex and Metaplex .source

Benefits

• Community Governance: Decentralized decision-making about protocol updates.
• Flexibility: Potentially greater customization options compared to Metaplex.
• Reduced upfront development costs by leveraging existing code.
• Open-source and community-driven for collaboration.

Drawbacks

• Smaller Ecosystem: Less widely adopted than Metaplex, potentially leading to a smaller marketplace presence.
• Discovery and integration costs may be higher due to a smaller ecosystem.
• Technical Complexity: This may require more developer experience to utilize fully.

Cost Analysis: Similar to Metaplex but slightly cheaper, tied to Solana’s low transaction costs.

Metame

Metame NFTs emphasize a minimalist and elegant visual aesthetic, creating a distinctive look within the Solana NFT ecosystem; pushing the boundaries of the Solana NFT space with its clean and captivating art collection.

Benefits

• Immutability: On-chain data is highly resistant to alteration. NFTs become less reliant on external storage solutions as they exist entirely on the blockchain.
• Unique Art Style: The clean, minimalist aesthetic of Metame NFTs stands out within the Solana NFT ecosystem, appealing to those who appreciate simplicity in visual design.
• No metadata: This refers to additional information attached to the NFT, which can sometimes be bulky or change over time. Metame keeps things simple by focusing on the core artwork.
• Community Focus: Metame emphasizes building a strong and supportive community around its project, which could contribute to a healthy and engaged collector base.
• Full IP rights: Unlike some platforms where ownership rights are murky, Metame grants the NFT holder full ownership of the intellectual property behind their NFT.
• No marketplace blacklistings: Metame NFTs shouldn’t be restricted from being traded on any Solana NFT marketplace.

Drawbacks

• Storage Costs: Putting entire NFT assets on-chain can be more expensive than storing metadata with external links.
• File Size Limitations: Best suited for smaller file sizes due to cost implications.
• Limited Current Utility: The practical use cases for Metame NFTs are still under development, which might make them less attractive to collectors seeking immediate tangible benefits.
• NFT Market Volatility: Like all NFTs, the value of Metame NFTs is subject to broader fluctuations and risks within the NFT market.
• IP rights complexity: While full IP rights are a boon, navigating the complexities of intellectual property can be daunting for some. Understanding how to leverage and commercialize your NFT’s IP can be a challenge.

Cost Analysis: Significantly higher minting costs than Metaplex or Libreplex due to on-chain storage requirements.

Future of NFTs and Outlook on the Solana Ecosystem

Minting basic NFTs on Solana is inexpensive at around $0.01 per NFT, but this often comes with limitations like lack of metadata editability. Standards like cNFTs and ephNFTs provide more creative possibilities but can have higher storage costs associated with IPFS. The Wen New Standard (WNS) introduces fractionalization, potentially reducing the individual cost of owning a portion of an NFT as storage is shared among owners.

Payments & Adoption

Standards like WNS can potentially drive wider NFT adoption by facilitating easier on-chain payments and community governance mechanisms. This makes the NFT experience more user-friendly, particularly for those new to the Solana ecosystem.

Functionality vs. Cost

pNFTs add flexibility, separating metadata from the core NFT for dynamic updates, but this comes with the complexity of more sophisticated smart contracts. There are inherent tradeoffs between cost, functionality, and metadata flexibility when choosing the right NFT standard.

Evolving Ecosystem

The NFT ecosystem on Solana continues to rapidly evolve. Standards like ephNFTs and innovations like WNS demonstrate the push towards balancing metadata flexibility, cost-efficiency, and community-driven features. We will likely see continued innovation as NFT use cases expand.

Navigating Complexity

As the NFT space continues to mature, staying informed about standards, on-chain implementations, associated costs, and emerging innovations is paramount.

References:

1. https://www.helius.dev/blog/priority-fees-understanding-solanas-transaction-fee-mechanic
2. Metaplex docs: https://docs.metaplex.com
3. Libreplex docs: https://libreplex.github.io/libreplex-program-library
4. Metame docs: https://github.com/a0rtega/metame/action
5. Solana docs: https://solana.com/docs
6. https://www.jupresear.ch/t/wen-new-standard-wns-0-0/133
7. Other references consulted are duly hyperlinked.

Caveat! “The article emphasizes that it does not contain sponsored content or financial advice. Instead, it offers educational insights into cryptocurrency within the Solana ecosystem. Readers are urged to research independently and consult financial professionals before investing. The article underscores the volatility of the cryptocurrency market and advises caution in financial decisions and the opinions reflected herein are subject to change without being updated.”

Feel free to reach out to me on Twitter @Oxmarkdams with any suggestions or opinions. If you find this even slightly insightful, please share it — I’ve invested countless hours crafting this content, and your support means everything in helping it reach a wider audience. Thank you.