Magic Eden’s Statements
cNFTs, unlike regular Solana NFTs, compress and store their data off-chain. As a result, they may allow for more feasible mass production due to requiring lower fees for minting.
According to Magic Eden, these types of NFTs are ideal for creating mass-produced collections in various industries such as gaming, music, events, and the metaverse. The NFT marketplace believes that it enables content creators to reach wider audiences without spending more.
The NFT marketplace also believes that by reducing the costs associated with NFT production, it can potentially encourage adoption and become an “easy access point” for new people to try collecting NFTs without risking a significant amount of funds to acquire a collection. This can help mitigate the risk of losing money through NFTs.
What Makes cNFTs Different?
cNFTs are supported by Solana’s state compression feature, allowing for the creation of approximately 110 to 1 million NFTs for as little as $110. Compared to minting NFTs on Ethereum, which can cost between $2.9 and $30 per NFT, the production cost with cNFTs appears to be significantly reduced.
While there are benefits to hosting NFTs off-chain, it also brings its challenges. For example, in 2022, NFTs minted on the FTX crypto exchange became corrupted and displayed blank images due to the exchange’s bankruptcy. An engineer pointed out that NFTs being hosted using a Web2 API instead of the blockchain was a lesson to be learned about removing NFTs’ reliance on Web2 technology.
