Metaplex: A Multi-Asset Service Protocol in the Solana Ecosystem

1. Introduction

Solana is undoubtedly the best-performing L1 public chain in this round of the bull market. From the perspective of active addresses and fee income, Solana's market share in the L1 market has significantly expanded:

• The share of active addresses increased from 3.48% to 56.83%, a year-on-year growth of 1533%.
• The share of fee income increased from 0.62% to 28.92%, a year-on-year growth of 4564%.

The meme craze is the core driving force behind the rapid growth of various metrics for Solana. In addition to Solana, DEXs like Raydium have also benefited, with active trading contributing significant revenue to them.

This article will focus on another project that benefits from the Solana asset issuance boom: Metaplex. It will mainly discuss the following questions:

1. What is Metaplex's business positioning and business model? What are its competitive advantages?
2. How is the business data of Metaplex? What is the development trend?
3. What is the background of the Metaplex team and their funding situation?
4. What is the current valuation level of Metaplex? Is there investment value?

2. Business Positioning and Business Model of Metaplex

Metaplex is a digital asset creation, sales, and management system based on Solana and supporting SVM on the blockchain, providing developers, creators, and enterprises with the tools and standards to build decentralized applications. Supported asset types include NFTs, fungible tokens (FT), real-world assets (RWA), game assets, DePIN assets, and more.

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

2.1 Metaplex Product Matrix

Metaplex, as an asset issuance, management, and standard system, serves clients including NFTs and fungible tokens. The main products include:

Core: A new generation NFT standard that adopts a "single account design", significantly reducing minting costs and computational power consumption, supporting advanced plugins and mandatory royalties.

Bubblegum: A program used for creating and managing compressed NFTs ( cNFT ). Through compression technology, a large number of NFTs can be minted at a very low cost.

Token Metadata: Additional data attached to fungible and non-fungible assets on Solana. Currently, all tokens created on the largest Meme issuance platform on Solana, Pump.fun, rely on Metaplex's metadata service.

Candy Machine: The most commonly used NFT minting and issuance program on Solana.

Other products: also includes multiple asset service tools such as MPL-Hybrid, Fusion, Hydra, and more.

Aura: A decentralized indexing and data availability network serving Solana and SVM ( testnet ).

2.2 The Business Model of Metaplex

Metaplex charges for 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 utilize these projects, including project teams creating various types of fungible tokens and individual users minting NFTs.

Charging small projects and retail users is a better business model because:

1. Small users are not very sensitive to prices; the individual transaction fees are low but the total amount is considerable.
2. Large projects can serve as distribution channels to help reach more decentralized users.
3. The bargaining power of a dispersed user base is weak, which is conducive to maintaining profit margins.

The specific fee standards for Metaplex on Solana are:

• Mint NFT: 0.0015 SOL/time
• Use Token Metadata: 0.01 SOL/transaction

2.3 The moat of Metaplex

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

1. After developers and users become heavily reliant on Metaplex tools, the switching costs are high.
2. The asset format of Metaplex has become the de facto standard within the Solana ecosystem, and new projects tend to choose the more compatible Metaplex.

Thanks to this, the lack of projects competing with Metaplex within the Solana ecosystem ensures its strong profitability.

3. Metaplex Business Data: High Product-Market Fit, Strong Growth in Core Metrics

3.1 Monthly Active Users

As of November 30, 2024, the monthly active users of Metaplex interacting with the protocol reached 844,966 unique addresses, setting a new historical high, with a year-on-year growth of 253%.

( 3.2 protocol minting assets number

In November, the total number of minted asset types exceeded 1.44 million, setting a new historical high. Among them, 94% were fungible tokens, and 6% were NFTs. Compared to January this year, where NFTs accounted for 18.6% and fungible tokens for 81.4%, Metaplex's main business has shifted towards fungible token asset services, most of which stem from the Meme craze.

![Has the NFT protocol Metaplex been underestimated while quietly making a fortune in the Solana Meme craze?])https://img-cdn.gateio.im/webp-social/moments-e46084d1c6c563ab68f9b7264cc849e9.webp###

( 3.3 protocol revenue

In November, protocol revenue reached 3.3 million USD, setting a new historical high.

Metaplex's business revenue is very organic, with no direct token subsidies, making it a typical project that achieves Product Market Fit ) PMF ###.

4. Metaplex Team: The Eco OG Close to the Solana Core Circle

Stephen Hess, the founder of Metaplex, was one of the earliest employees at Solana and was responsible for the Solana product department. He founded Metaplex Studios in November 2021.

In January 2022, Metaplex secured a strategic investment of $46 million from institutions such as Multicoin, Jump, and Alameda, with a valuation of approximately $450 million.

After the FTX collapse in November 2022, Stephen Hess quickly decided to lay off employees to prepare for the downturn in the Solana ecosystem, demonstrating a clear awareness of cost control.

The current Metaplex team has about 10 members, which is lean but has strong product delivery capabilities, with high iteration and development efficiency.

The Metaplex team's overall quality is excellent:

• Core member background matching
• closely related to the core circle of the Solana ecosystem
• Product with keen instincts, diligent and efficient
• Have a cost control awareness
• Received investment from top VCs, possessing quality business resources

5. MPLX: Token Utility and Valuation Levels

( 5.1 Token Basic Information

The total supply of MPLX is 1 billion, with a current circulation rate of 75.6%. Most of the investors' shares are already in circulation, resulting in a small unlocking pressure. The portion that has not been circulated mainly comes from Metaplex DAO, the foundation, the treasury, and some unlocked shares.

![Is the NFT protocol Metaplex underestimated while quietly making money in the Solana Meme craze?])https://img-cdn.gateio.im/webp-social/moments-ca888d028c835b96b23b757232743604.webp###

( 5.2 token utility

Currently, MPLX is mainly used for governance voting. Starting from March 2024, Metaplex will use 50% of protocol revenue to repurchase tokens, and the repurchased tokens will enter the treasury for ecosystem development.

Starting from June, buy back 10,000 SOL of MPLX every month for 5 months. Next month it will increase to 12,000 SOL.

After the future Aura function goes live, MPLX is expected to become a staking asset for Aura nodes, sharing Aura rewards.

![Is the NFT protocol Metaplex underestimated while quietly making a fortune in the Solana Meme craze?])https://img-cdn.gateio.im/webp-social/moments-d4c5f128d44bfb09a15b7a8809ac10da.webp###

( 5.3 protocol valuation

Compared to Raydium, which is also part of the Solana ecosystem, benefits from the Meme craze, and has a buyback mechanism, Metaplex has a slightly higher valuation. However, the business positioning of the two is quite different and is for reference only.

![Is the NFT protocol Metaplex underestimated while quietly making a fortune in the Solana Meme craze?])https://img-cdn.gateio.im/webp-social/moments-b6761627a22ec603f0cd623b463422a9.webp###

( 5.4 Potential Driving Factors and Risks

Advantages:

• Master the standard-setting authority of assets and directly benefit from the prosperity of the Solana ecosystem.
• The product has a high market fit, and it can be profitable without token subsidies.
• Actively expand the second growth curve
• The team has excellent quality and is closely related to the ecosystem.
• The token has a buyback mechanism and a low market value.

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.
• Some projects have fixed asset types, making it difficult to continuously generate income.

![Is the NFT protocol Metaplex underestimated while quietly making a fortune in the Solana Meme craze?])https://img-cdn.gateio.im/webp-social/moments-33f1c8da7949876fe3e41318b7678191.webp###

Summary

Metaplex is actually a foundational protocol that serves all types of assets in the Solana ecosystem and is a direct beneficiary of the Meme craze. For investors optimistic about the Solana ecosystem, Metaplex, which occupies the upstream ecological niche of "asset issuance and management," is worth long-term attention.