Nfts
Why Solana’s New Token Expansions Are a ‘Game Changer’ for NFTs – DL News
- A new token extension allows Solana developers to natively embed metadata into NFTs.
- Development disrupts Metaplex monopoly, says Solana infrastructure developer.
- The new token expansions could help Solana’s NFTs catch up with those on other blockchains like Ethereum.
Solana recently rolled out 13 new token extensions that bring a host of new features for developers to build with.
In developer circles, one of these new features is generating a lot of excitement: the ability to natively embed metadata into Solana NFTs.
Metadata is a key tool in blockchain protocols, allowing additional information, such as images and characteristics, to be assigned to NFTs.
Previously, Solana tokens only had the ability to include minimal metadata, such as the supply of a given token.
Solana’s new token extensions enable a generic metadata interface, independent of a single stakeholder. Developers can now create their own bespoke NFT standards, enabling more competition and innovation within Solana’s NFT ecosystem.
It didn’t take long for developers to exploit this new capability.
Ming Ng, a developer working on the popular decentralized exchange aggregator Solana Jupiter, has already released a new Solana NFT token standard in collaboration with the NFT fractionation protocol Ovols.
A Metaplex monopoly?
Since there was previously no way to attach more metadata to Solana NFTs natively, independent Solana companies created their own solutions.
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Metaplex, a protocol that enables the creation and minting of NFTs, was the most prominent of these. It allows Solana developers to attach additional metadata to tokens. Due to the high costs of doing so, many NFT creators have opted not to create their own metadata protocols and have instead opted to use Metaplex’s.
Although much of Solana A $4.8 billion NFT market would not exist without Metaplex, this situation was not a good long-term solution, according to Mert Mumtaz, CEO of infrastructure provider Solana Helius Labs.
“A single centralized, for-profit entity – Metaplex – currently holds a complete monopoly on the NFT standard on Solana,” Mumtaz said. DL News“Lack of competition leads to lack of innovation.”
Nhan Phan, co-founder and CTO of Metaplex Studios, the for-profit company that uses the Metaplex protocol in its products, said DL News that Metaplex “has never been a monopoly” and that there have been several NFT standards alongside Metaplex’s that have shipped in the past.
The Metaplex protocol is owned and operated by the Metaplex Foundation, a non-profit entity. Although the Metaplex protocol code is open source, those who use it cannot waive its mandatory fees.
“Our goal has always been to innovate and disrupt ourselves – for example, with compression – and that’s what has allowed us to remain the go-to option for digital asset developers,” Phan said.
September 2022 white paper published by the Metaplex Foundation, indicates that its protocol has been used to create over 20 million NFTs, representing over 99.9% of Solana’s NFT market.
Phan also said that the Metaplex protocol includes more than just a metadata extension and also provides Solana NFT tools, as well as on-chain NFT collection launches and on-chain NFT data storage.
“There is a lot to improve”
With the ability to natively include NFT metadata, Solana’s NFT ecosystem can now catch up with other networks like Ethereum, where multiple distinct NFT standards, such as ERC721, ERC1155, and more recently ERC404have gained popularity.
“The new token extension is a radical change for Solana NFTs,” said a spokesperson for NFT marketplace Magic Eden. DL News. Magic Eden said the new metadata interface would empower builders and allow them to easily innovate with new token standards.
One way to achieve this would be to combine the Metadata extension with the Transfer Hook extension. This would allow NFTs to execute custom logic when transferred and could be used to create permissioned tokens or NFTs that automatically distribute royalties.
Magic Eden isn’t alone in highlighting the power of token expansions.
“There is a lot of room for improvement when it comes to Solana NFTs,” said Armani Ferrante, the creator of the Mad Lads NFT project and the Backpack NFT exchange. DL News.
Ferrante said the new token extensions will make it easier to explore “important features like royalty enforcement,” and that Backpack plans to support the new standards.
The application of NFT royalties – a small portion of each NFT sale sent to its creators – has always been a controversial issue.
Some marketplaces, such as OpenSea, have finally chosen not to claim royalties for NFTs sold on the platform due to other popular NFT marketplaces making royalties optional.
A few NFT collectors are fighting over that not enforcing royalties harms NFT creators and prevents them from generating a stable revenue stream from their work.
Update, February 13: This article has been edited to clarify the differences between the Metaplex Protocol, the Metaplex Foundation, and Metaplex Studios.
Tim Craig is DL News’ DeFi correspondent based in Edinburgh. Feel free to share your tips with us at tim@dlnews.com.