Solana Ecosystem Infrastructure Metaplex: The Invisible Billionaire in Low-Key Development?

The most successful L1 project in the Solana ecosystem is none other than Solana. Whether in terms of active addresses or fee revenue, Solana's market share in the L1 sector has rapidly expanded: the share of active addresses has increased from 3.48% to 56.83%, a year-on-year growth of 1533%; the share of fee revenue has increased from 0.62% to 28.92%, a year-on-year growth of 4564%.

The meme craze is the main driving force behind the rapid growth of core indicators for Solana in this round. In addition to Solana, other DEXs like Raydium have also gained a large amount of trading and protocol revenue due to active meme trading. This article will focus on another project that benefits from the issuance of Solana assets: Metaplex.

Business Positioning and Business Model of Metaplex

Metaplex is a digital asset creation, sales, and management system built on Solana and supported by SVM-enabled blockchains, providing developers, creators, and businesses with tools and standards to build decentralized applications. Supported asset types include NFTs, FTs, RWAs, game assets, DePIN assets, and more.

Recently, Metaplex has expanded its business into data indexing and data availability services. In the long term, Metaplex is expected to become one of the most important multi-domain infrastructure projects in the Solana ecosystem.

Metaplex product matrix

Metaplex's main products include:

• Core: A new generation NFT standard, using "single account design" to reduce minting costs.
• Bubblegum: A program for creating and managing compressed NFTs ( cNFT ).
• Token Metadata: Attach metadata to assets on Solana
• Candy Machine: NFT minting and issuance program
• MPL-Hybrid: Hybrid NFT storage and management solution
• Fusion: NFT Merge Feature
• Hydra: A large-scale NFT minting solution
• Aura: Decentralized Index and Data Availability Network ( Testnet )

Metaplex's business model

Metaplex charges by providing on-chain asset-related services. Although the direct partners are other projects on Solana, most of the revenue comes from small projects or retail users that use these projects, including project parties that create tokens and individual users who mint NFTs.

The single service fee for Metaplex is relatively low, such as minting an NFT only costing 0.0015 SOL, and adding metadata for meme projects only costing 0.01 SOL. Such costs are negligible for users.

Metaplex's moat

The moat of Metaplex mainly comes from "high switching costs" and "setting standards":

1. Once developers and users become deeply reliant on Metaplex tools, the cost of switching to other protocols is very high.

2. The asset format of Metaplex has become the standard in the Solana ecosystem, and new projects will prioritize compatibility with Metaplex.

Thanks to these moats, there are few projects within the Solana ecosystem that can compete with Metaplex, ensuring its strong profitability.

Metaplex Business Data: High Product-Market Fit, Strong Growth in Key Metrics

Monthly Active Users

As of November 30, 2024, Metaplex had 844,966 monthly active users, setting a new historical high, with a year-on-year growth of 253%.

Protocol Minted Asset Count

In November, the total number of minted asset types exceeded 1.44 million, setting a new historical record. Among them, 94% were fungible tokens, and 6% were NFTs. In January of this year, this ratio was 18.6% to 81.4%.

protocol income

In November, the protocol income reached as high as 3.3 million US dollars, also setting a historical record.

The revenue of Metaplex is organically grown, without token subsidies. This indicates that it has achieved a good fit between its products and market demand.

Metaplex Team: The Ecological OG Close to the Core Circle of Solana

Founder Stephen Hess is a Stanford graduate and was an early employee at Solana. In January 2022, he received $46 million in investment from Multicoin, Jump, and others, with a valuation of approximately $450 million.

The team size is kept at over 10 people, which is relatively streamlined but has high product iteration and development efficiency.

The Metaplex team embodies the comprehensive elements of an excellent Web3 team:

• Core member background matching
• Closely related to the core layer of the public chain ecosystem
• Good product intuition, strong delivery capability
• Have cost control awareness
• Received investment from top VCs and has high-quality business resources

MPLX: Token Utility and Valuation Level

Token Basic Information

The total supply of MPLX is 1 billion, with a current circulation rate of 75.6%. Most investors' shares are already in circulation, and the unlocking selling pressure is relatively small.

token utility

Currently mainly used for governance voting. Starting from March 2024, 50% of the protocol revenue will be used for token buybacks.

protocol valuation

Compared to Raydium, which also benefits from the Meme craze, Metaplex is valued slightly higher. However, the business positioning of both is quite different, and this is for reference only.

potential driving factors and risks

Advantages:

• Positioned upstream in asset services, directly benefiting from the prosperity of the Solana ecosystem.
• High product market fit, no token subsidies needed to achieve positive cash flow
• Actively expand the second growth curve
• The team's quality is high, and they have close relationships with the core ecosystem.
• The token has a buyback mechanism, and the market cap is relatively low.

Potential upward driving force:

• A new active track has emerged in the Solana ecosystem.
• Launch on larger trading platforms to gain liquidity premium
• Increase service fees

Potential Risks:

• The decline of the Solana Meme craze has led to a decrease in revenue.
• Projects with fixed asset types cannot generate continuous income.

Summary

Metaplex is actually the foundational protocol serving all types of assets in the Solana ecosystem and is a direct beneficiary of the Meme craze. If you are optimistic about the Solana ecosystem, Metaplex, which occupies an upstream position in "asset issuance and management," deserves long-term attention.