State Compression and Compressed NFTs

At a high level, state compression is a technique in which a off-chain data is secured by the Solana ledger, using a hashing algorithm to "fingerprint" the off-chain data and storing it inside a special on-chain Merkle tree, called a Concurrent Merkle Tree.

With this technology, compressed NFTs can be created on-chain in a similar manner as before, but for a fraction of the cost as before. As a frame of reference of on-chain cost reduction, take a 1 million NFT collection:

• traditional NFTs (aka non-compressed):
  • 1 million NFTs ~= 12,000 SOL
• compressed NFTs:
  • 1 million NFTs ~= 5 SOL

Tech stack of this repo

• uses TypeScript and NodeJS
• yarn (as the node package manager)

Setup locally

1. Clone this repo to your local system
2. Install the packages via yarn install
3. Copy rename the example.env file to be named .env
4. Update the RPC_URL variable to be the cluster URL of a supporting RPC provider

If you have the Solana CLI installed locally: update the LOCAL_PAYER_JSON_ABSPATH environment variable to be the absolute path of your local testing wallet keypair JSON file.

Recommended flow to explore this repo

After setting up locally, I recommend exploring the code of the following files (in order):

1. ./scripts/verboseCreateAndMint.ts
2. ./scripts/fetchNFTsByOwner.ts
3. ./scripts/transferNFT.ts

After reviewing the code, then running each of these scripts in the same order.

Note: Running each of these scripts will save some bits of data to a .local_keys folder within this repo for use by the other scripts later in this ordered list. Therefore, running them in a different order will result in them not working as written. You have been warned :)

Running the included Scripts

Once setup locally, you will be able to run the scripts included within this repo:

yarn demo ./scripts/<script>

createAndMint.ts

Performs all the following actions:

• create a new Merkle tree on-chain
• create a new NFT collection
• mint two compressed NFTs (to different addresses)

verboseCreateAndMint.ts

Functionally the same as createAndMint.ts. This scripts adds extra console logging and comments for explanation purposes.

fetchNFTsByOwner.ts

Using the ReadApi fetchAssetsByOwner method to fetch the NFTs owners by the two addresses.

fetchNFTsByCollection.ts

Using the ReadApi fetchAssetsByGroup method to fetch the NFTs belonging to the same collection.

transferNFT.ts

Performs the complete process to transfer a compressed NFTs. Specifically:

• fetching the NFT asset data from the RPC
• fetching the asset's proof from the RPC
• verifying the RPC provided proof on the client side
• builds the compressed NFT transfer function

mintToCollection.ts

Mint additional compressed NFTs into an already existing collection and/or tree.

Resources on State Compression and Compressed NFTS

• Account Compression Program:
  • Documentation - https://spl.solana.com/account-compression
  • Repository - https://github.com/solana-labs/solana-program-library/tree/master/account-compression
• Metaplex Read API:
  • open spec: https://github.com/metaplex-foundation/api-specifications/tree/main/specifications/read_api
  • Playground - https://metaplex-read-api.surge.sh/
• Metaplex Compression examples:
  • https://github.com/metaplex-foundation/compression-read-api-js-examples
  • Bubblegum program - https://github.com/metaplex-foundation/metaplex-program-library/tree/master/bubblegum