How to use compressed NFTs on Solana, powered by state compression

Compressed NFTs represent a significant breakthrough in blockchain technology, offering a cost-effective solution for minting and managing non-fungible tokens on the Solana network. By leveraging state compression technology, these compressed NFTs achieve a remarkable reduction in cost while maintaining identical functionality to their uncompressed counterparts. This comprehensive guide explores the fundamental concepts and practical steps required to effectively utilize compressed NFTs on Solana.

Understand Merkle trees

State compression operates on the principle of Merkle trees, a sophisticated data structure that compresses the verifiability of an entire tree of data into a single "hash" or "fingerprint" representing the current state. This cryptographic approach enables efficient verification without storing complete data on-chain.

The Merkle roots are stored directly on the Solana blockchain, while updates are recorded in the Solana ledger. This architecture allows any participant to permissionlessly reconstruct the tree by combining extensive verifiable off-chain storage with minimal on-chain storage costs. The system maintains security and transparency while drastically reducing computational and storage expenses.

Solana Labs engineers implemented a unique innovation: the capability to perform concurrent updates to Merkle trees multiple times within a single block. This is achieved through fast-forwarding stale proofs, a feature that distinguishes Solana's implementation from traditional blockchain approaches and significantly enhances transaction throughput.

Initialize the tree

Initializing a Merkle tree requires configuring three critical parameters: depth, buffer size, and canopy height. Understanding these parameters is essential for optimizing performance and cost efficiency when working with compressed NFTs.

Depth determines the tree's capacity, calculated as 2^DEPTH leaves. Developers can configure trees ranging from eight leaves to one billion leaves (2^30), with each leaf potentially representing an NFT. This flexibility allows scaling from small collections to massive token distributions.

Buffer size approximates the number of concurrent updates that can occur within the same block. Traditional Merkle tree implementations suffer from a limitation where any tree modification invalidates previously computed proofs. However, Solana's novel concurrent implementation addresses this by fast-forwarding stale proofs while maintaining acceptance by smart contracts. A buffer size of 64, for example, means proofs remain valid for 64 tree updates before requiring recomputation. Buffer sizes can range from eight to 2048, depending on requirements.

Canopy height specifies the portion of the tree stored on-chain, reducing the number of proofs clients must submit for verification. Given Solana's transaction size limitations, this parameter becomes essential for validating trees with depth greater than 20, with a maximum canopy height of 17.

Best practice recommends deploying multiple smaller trees of varying sizes rather than a single large tree. This approach reduces write-lock contention on tree accounts and enhances composability by minimizing required proofs. A canopy height of DEPTH-3 proves particularly effective, providing interface compatibility with existing NFT-related smart contracts while requiring only three account submissions. For instance, a depth-20 tree with a canopy of 17 requires clients to submit only three proofs for any tree modification.

Mint an NFT

Minting compressed NFTs has been streamlined through existing tooling infrastructure. Bubblegum, a smart contract developed by Metaplex, powers compressed NFTs using state compression technology internally. All operations—minting, transferring, and replacing—are executed against the Bubblegum smart contract.

Notably, minting operations do not require proofs, making the process as straightforward as traditional NFT minting. Anyone can initiate compressed NFT mints with the same ease as before, democratizing access to cost-effective token creation on Solana.

Use an RPC to get the latest data

Compressed NFTs diverge from the traditional on-chain account model. Since tree-related data is recorded directly into the Solana ledger, Remote Procedure Calls (RPCs) become essential for delivering fast and responsive read experiences.

Multiple RPC providers now support compressed NFTs, including Helius, SimpleHash, and Triton. Notably, many of these providers implement the Metaplex Read API, a standardized interface for retrieving comprehensive information about both compressed and uncompressed NFTs. This unified approach simplifies development and ensures consistency across different platforms.

Use proofs to transfer NFTs

Compressed NFTs require a different approach for modifications due to their storage methodology. Any change to a compressed NFT—whether transferring ownership or updating metadata such as collection information—necessitates modification of the underlying storage tree.

To execute such modifications, developers must compute proofs demonstrating knowledge of the tree's latest state, combined with the leaf owner's or delegate's cryptographic signature. Merkle tree proofs consist of hash sets that verify a leaf's presence in the tree.

RPC nodes provide these proofs through the getAssetProof Read API method. Depending on the canopy height configuration, clients can submit a subset of the proof path while allowing the on-chain program to reconcile the remaining components, optimizing transaction efficiency.

The process involves submitting proofs alongside the intended modification—such as designating a new owner—and broadcasting the transaction to the network. This streamlined process, combined with Solana's unique concurrent update capabilities, enables efficient NFT operations at unprecedented scale.

Conclusion

Compressed NFTs on Solana represent a transformative advancement in blockchain economics and scalability. By mastering the five key concepts—understanding Merkle trees, initializing tree parameters, executing mints, leveraging RPC infrastructure, and utilizing proofs for transfers—developers can unlock cost-effective, high-scale NFT applications that have become increasingly practical on blockchain networks.

The significant cost reduction compared to uncompressed NFTs, while maintaining identical functionality, positions compressed NFTs as the foundation for next-generation on-chain product experiences. With mature tooling, standardized APIs, and growing RPC support, the pathway to implementing compressed NFTs has never been more accessible. Developers are now equipped to build innovative applications at scales from millions to billions of NFTs, reshaping the possibilities of blockchain-based digital assets.

FAQ

Are compressed NFTs worth anything?

Yes, compressed NFTs hold real value by significantly reducing gas fees and transaction costs. Their worth stems from cost-efficiency benefits and practical utility in frequent trading and transfers, making them increasingly valuable in the NFT ecosystem.

How to claim compressed NFT?

To claim a compressed NFT, redeem it for a voucher through the Bubblegum protocol. This removes the NFT from the tree and creates a voucher account as proof of ownership, allowing you to access the full NFT data.

What is the difference between NFT and cNFT?

NFTs represent ownership on the blockchain. cNFTs (Confidential NFTs) add privacy features, allowing sensitive information to be encrypted and hidden while maintaining ownership verification on-chain.

Is NFT worthless now?

No. While many NFTs lost value during market downturns, quality projects retain utility and value. Compressed NFTs offer lower costs and efficiency, attracting new use cases. The market has matured, separating valuable assets from speculative ones.