The cryptocurrency market has drastically increased recently, which pushed technologies to innovate faster than ever. Bitcoin and Ethereum are competing for the first place, while other digital assets continuously provide developed solutions. If Bitcoin overtakes Ethereum, other cryptocurrencies will take its place, such as Solana ―you can click here to learn more about Bitcoin. Set side by side, these two technologies have similar features, but Solana offers the same services with lower costs and faster transaction speed. Solana also uses a combined consensus mechanism from PoS and PoH through which the blockchain can verify orders and encode trustless passages into the ledger.
Solana’s technology is among the most developed, providing high scalability, security and decentralization standards. Lately, Solana has improved another of its features to minimize on-chain storage costs, which are usually known as pricey in Ethereum or Bitcoin.
Here’s what Solana can do.
Solana’s state compression
Last week, Solana’s Foundation team revealed they’re working on a project that aims to decrease the cost of minting 1 million NFTs on the network to $110. Currently, storing the same number of NFTs costs around $24,000 on the Solana blockchain.
The innovative technology is already on Solana’s Mainnet-Beta and is working towards a better on-chain product experience. The project was successful only after numerous tests, adoption and rollout efforts to bring compressed NFTs to life. Now, developers can store data on-chain and update it from the Solana ledger, which would drastically reduce data storage costs. The team has already introduced this innovation in blockchain-based messaging services, and even an NFT and API tooling company.
What are compressed NFTs?
Generally, compressed NFTs are issued and confirmed on-chain, and they were initially created by Solana’s Lab Merkle tree program and the Metaplex Foundation to facilitate NFT minting. Being the subject of multiple tests, the technology now allows data to be stored and handled off-chain, which helps minimize storage costs.
Compressed NFTs facilitate minting for businesses and individual users on a massive scale while leveraging the same security features. Many industries can use compressed NFTs, such as the gaming sector, in which they work as in-game assets that can help Web3 game development companies save costs. The metaverse too can use compressed NFTs to digitize large numbers of in-game collectibles. On an enterprise level, these technologies can track merchandise across supply chains and allow organizations to mint, store and retrieve NFTs.
Compressed vs uncompressed NFTs: when should they be used?
Compressed NFTs are quite different from regular ones. First of all, they store data off-chain and are accessed through Solana RPC providers, which makes them more cost-effective. Secondly, compressed NFTs require users to cryptographically prove their authority to change compressed NFT, which increases security measures. Safety is also enhanced as every NFTs account has three other accounts powering it, the mint account, the associated token account and the wallet account as well. Both new and existing NFTs can be compressed, and the processes are not complex.
NFT decompression is also available for removing NFTs from the off-chain Merkle tree dataset. Regardless, the main difference between compressed and uncompressed NFTs lies in the type of transaction ―on-chain or off-chain.
On-chain vs off-chain cryptocurrency transactions
Blockchain technologies provide different types of solutions for every kind of challenge. For example, on-chain transactions offer more security, while off-chain ones ensure speed, anonymity and cost-efficiency. Both ecosystems are needed for their features, but they also have their limitations:
- While on-chain technology provides security, it might trigger slower transactions;
- If on-chain solutions are decentralized, their transaction fees are also increased;
- On-chain transactions ensure transparency, but their power usage might be an inconvenience;
On the other hand, off-chain transactions have the similarities of providing faster speed but less transparency. At the same time, they’re less secure, even if costs are lower, with little-to-no fees.
On Solana’s RPC providers
Compressing NFTs with this new technology is possible with the help of RPC (Remote Procedure Call) providers, which is actually a software communication protocol. Public, private and shared Solana RPC providers are available for anyone to use if they want to connect with Solana’s blockchain, but also for API key owners to have the same accessibilities.
How to choose the correct Solana RPC provider
Depending on each company’s needs, the RPC provider must be appropriately chosen for it to leverage Solana’s features of fast transaction speed and low latency. Here are some factors that need to be considered:
- Reliability and scalability are essential for guaranteeing requests are services and scale is on demand;
- Data correctness helps deliver accurate smart contract answers, while latency ensures availability to service the requests;
- APIs offer support for Solana’s features, while customer support helps minimize downtime;
Why Solana needs more media coverage
Currently, Solana is acknowledged for its innovative approach to blockchain technology. Still, due to the lack of popularity, at least compared to its top competitor, Ethereum, Solana has a long way to go until reaching mass adoption, says CNBC.
But as many as 350 projects are powered up by Solana blockchain at the moment, and the technology helps DApp developers create cost-efficient applications in an effortless way. Some of its most interesting projects include the following categories:
- DeFi: Mango Markets, Orca and Serum;
- Wallets: Phantom and Solflare;
- Stablecoins (definition here): Tether and USDC;
- NFTs: Solanart and Metaplex;
- Games: Star Atlas and Aurory;
Some upcoming Solana-based projects for 2023 include many NFT collections, such as the Node, which will be the first-ever Action Figure NFT based on a dystopian sci-fi comic. The Pirate Robots also combines 200 unique assets with pirate and robotic features. WIzzzard is another great Solana-based technology that leverages a read-and-earn idea through which people can earn tokens by reading aloud in the app provided. Finally, the Shutter Bots Club combines NFTs, photography and film industries to share revenue from stock photography and allow holders to receive artful assets.
Solana’s innovative features bring technology to a point where assets and applications are cheaper and faster to transact and build. With its latest updates and features, Solana will become the power base of most applications and software solutions, and companies will leverage better services.
Last Updated: May 12, 2023