Why we invested in Metaplex, an NFT protocol built on the Solana platform
One of the shining stars in the Solana ecosystem, Metaplex, is empowering creators and brands to create non-fungible tokens (NFTs).
Metaplex is an open source protocol that allows for the creation and minting of NFTs using a standardized format across wallets and applications. It consists of two core components: an on-chain program, meaning sellers and buyers do not need to trust a centralized authority, and a self-hosted web3 application.
We invested in Metaplex because it offers a viable alternative to the existing NFT ecosystem. Metaplex takes advantage of Solana’s open source infrastructure, which includes developers, token holders, and validators. In October, FTX.us also launched its own NFT marketplace for users to mint, authenticate, and trade NFTs on the Solana blockchain conforming to the Metaplex standard.
The Metaplex protocol includes an ecosystem of smart contracts and tools designed to make the process of creating and launching NFTs easier. Creators using Metaplex can build their own communities by managing their own branded storefronts. It also enables developers to hard code perpetual royalties into NFTs ensuring that creators will always receive their share from secondary sales.
NFTs minted using Metaplex are immutable, which is not always the case with Ethereum-based NFTs. Moreover, all Metaplex NFT media is stored permanently on Arweave — a data storage blockchain protocol.
Creating and auctioning NFTs using Metaplex is considerably more economical than other ecosystems as well. The Metaplex protocol is faster and less expensive than Ethereum-based NFT platforms, thanks to Solana’s proof-of-history timestamp system, delivering 400ms block times at an average transaction cost of $0.00025. It’s about 97% less expensive compared with OpenSea. Metaplex storefronts connect to a powerful on-chain decentralized program that mints and sells NFTs, removing the middleman, and its related fees, from the process.
That’s one of the reasons we joined in the $46 million token investment round for Metaplex. Among the other investors are Solana Labs, Animoca, and Republic Labs.
We believe Metaplex has the potential to grow rapidly. Since launching in June 2021, it has become one of the most popular solutions for creators to launch NFTs storefronts. In less than six months, over 5 million Metaplex NFTs have been minted.
While Metaplex has initially focused on arts and entertainment, we are confident that the protocol is well-positioned to go beyond digital art as NFT projects evolve into the go-to social networks and gaming in a rapidly evolving metaverse.
Joan Kim is an Investor at Samsung Next. Samsung Next's investment strategy is limited to its own views and does not reflect the vision or strategy of any other Samsung business unit, including, but not limited, to Samsung Electronics.
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