Magic Eden, a prominent nonfungible token (NFT) marketplace, has introduced support for Solana’s compressed NFTs (cNFTs), offering a cost-effective and scalable alternative for digital collectible enthusiasts.
cNFTs distinguish themselves from traditional Solana NFTs by compressing and storing their data off-chain. This approach significantly reduces the fees associated with minting, making it more feasible to produce NFTs in larger quantities.
Magic Eden believes that cNFTs hold enormous potential for creating mass-produced collections across various industries, including gaming, music, events, and the metaverse. By lowering production costs, this type of NFT enables creators to reach broader audiences without a substantial financial commitment.
Additionally, Magic Eden sees the reduced cost of NFT production as a catalyst for wider adoption, potentially serving as an accessible entry point for newcomers interested in exploring NFT collecting. Lower costs empower users to engage in NFT collections without exposing themselves to significant financial risks, thus mitigating the potential for financial losses associated with NFT investments.
cNFTs leverage Solana’s state compression technology, enabling the minting of up to 1 million NFTs for approximately $110. This stands in stark contrast to Ethereum, where minting NFTs can cost anywhere from $2.9 to over $30 per NFT. Consequently, cNFTs offer a substantially more cost-effective option for creators and collectors.
It’s important to note that while hosting NFTs off-chain has advantages, it also presents certain challenges. In 2022, NFTs hosted on the crypto exchange FTX experienced issues, displaying blank images as the exchange faced financial difficulties. An engineer highlighted that these NFTs relied on a Web2 API instead of blockchain technology, underscoring the importance of using blockchain-based solutions for hosting NFTs to avoid potential problems.