Sistine Research: Why we like Metaplex (MPLX)

In early September, insiders revealed that several crypto funds including Pantera Capital and ParaFi Capital (as well as Modular, Syncracy, and Theia Blockchain) recently purchased a large number of Metaplex (MPLX) tokens from Wave Digital Assets, which made Metaplex gain a lot of attention for a while, and the price of its native token MPLX also rose above the market average in the following 20 days. Research institution Sistine Research released its latest Metaplex (MPLX) research report on September 26. The following content is organized and compiled by BlockBeats:

Overview

The Metaplex protocol is a decentralized platform based on the Solana blockchain that aims to simplify the creation, sale, and management of digital assets. It provides developers, creators, and businesses with a range of tools and standards to build decentralized applications.

Metaplex supports the minting of various digital assets, including NFTs, common tokens, RWAs, game assets, and DeFi assets, and has become one of the most widely used blockchain protocols, with more than 550 million assets minted in 55 million independent wallets.

Learn about Metaplex

Metaplex currently consists of Metaplex Developer Platform, SVM, MLP, Aura Network and Metaplex DAO. Specific information includes:

· Metaplex Developer Platform: provides SDK, CLI, guidance and basic documentation suggestions

· Solana Virtual Machine (SVM): execution and status verification

· Metaplex Program Library (MPL): provides audited smart contracts and programs

· Aura Network: supports indexing and data availability, powered by MPLX

· Metaplex DAO: Governed by MPLX

Solana Virtual Machine (SVM)

Metaplex is built on top of the Solana Virtual Machine (SVM), or the Solana smart contract execution environment or Solana blockchain. The SVM allows developers to write and deploy smart contracts in a secure and decentralized manner.

Metaplex Developer Platform

Writing and deploying smart contracts on the SVM is not an easy task without pre-existing frameworks, guides, and documentation. This is where Metaplex can help developers. Metaplex provides a developer platform (including SDK, CLI, guides, and documentation) for developing on Solana.

Metaplex Library (MPL)

Metaplex provides a library of audited smart contracts for developers to use. Compared to developing an unaudited contract from scratch, using Metaplex programs is not only efficient but also more economical, and the team only needs to pay a small fee.

Here are the specific programs:

· Bubblegum

Bubblegum is a program for creating and interacting with compressed NFTs (cNFTs) on Solana. In scenarios where a large number of NFTs are required, such as blockchain games, cNFTs can significantly reduce the cost of storing NFTs.

Assume that every picture on Instagram is an NFT on Solana. Without cNFTs, the cost of storing these images will increase linearly, and the storage fee will reach 12 million SOL per billion NFTs. Through Metaplex's Bubblegum cNFT program, the cost of storing a billion NFTs can be significantly reduced to 500 SOL.

· Core

Core is an affordable NFT standard that provides developers with multiple advantages, including lower minting costs, less computing requirements (more transactions can be processed in the same block), and enforceable royalties.

· MPL-Hybrid

MPL-Hybrid (MPL-404) implements a hybrid system of non-fungible and fungible tokens. This concept has recently gained attention with the release of the DEGOD token by DeGods. Users can redeem DeGods NFTs for a certain number of DEGOD tokens and vice versa.

· Inscription

The Metaplex inscription program allows developers to write data directly to Solana, leveraging the blockchain as a way to store data, similar to how inscriptions can be made directly on the Bitcoin blockchain. This capability is particularly useful for small collections of art NFTs that wish to store data directly on Solana and are willing to pay a premium for doing so.

· Token Auth Rules

Create and update the ruleset for SPL tokens, ensuring that transactions that violate the rules are reversed.

· Token Metadata

The NFT standard on Solana that allows developers to create digital assets by adding metadata to tokens. This standard is used by most PFP NFT collections.

· Fusion

Create composable NFTs. For example, you can combine 7 NFT fragments into a sword NFT in a Web3 game, or collect 10 works of art and combine them into a unique collection.

· Hydra

Create shared wallets that allow large-scale membership to participate in the allocation of funds from a central wallet.

· Candy Machine

Candy Machine is a program for minting and distributing NFTs. If you have minted NFTs on Solana, you have likely used Metaplex’s Candy Machine program.

Metaplex Programming Library (MPL) Summary

Metaplex provides most of the developer tools on Solana.

If you are a project or developer looking to work on Solana, you will most likely use Metaplex’s tools and leverage their existing audited smart contract programs rather than building from scratch.

Most programs charge a small fee (denominated in SOL), and 50% of the revenue generated by Metaplex is used to buy back MPLX tokens.

Aura Network

Metaplex recently launched the Aura Network, a project that provides a data availability layer for Solana, greatly improving Solana’s scalability and creating a whole new value for the MPLX token.

Data Availability (DA) refers to the ability to store and retrieve data in a blockchain environment. Today, decentralized applications face challenges in competing with centralized alternatives because reading and displaying the current state of blockchain data is difficult, expensive, and slow.

Aura solves these problems by complementing SVM and MPL with a decentralized network of Aura nodes. Aura nodes are able to efficiently index asset data and provide real-time data availability in compressed states, all secured by the MPLX token.

“Everything is secured by the MPLX token” refers to the fact that MPLX now serves not only as an incentive token for Aura nodes, but also as a Gas token for operating on the Aura network.

Metaplex DAO

The Metaplex DAO governs the Metaplex protocol and holds the MPLX library used to further develop and support Metaplex. MPLX holders can submit and vote on MIPs (Metaplex Improvement Proposals) and grant proposals.

MPLX Tokens

50% of Metaplex’s revenue is used to buy back MPLX tokens to be injected into the Metaplex DAO treasury.

Metaplex has earned a total of 130,700 SOL since its inception. In June, July and August 2024, 10,000 SOL will be used to repurchase MPLX every month. A total of 30,000 SOL has been spent on repurchasing MPLX, and the cumulative number of MPLX purchased for DAO has reached 13,437,215.

With the launch of the Aura network, MPLX is now comparable to other data availability solutions.

Compared to other projects, MPLX has a total of 380 million tokens, limited supply and all in circulation, AVAIL has a large amount of unlocked tokens and 5% emission, NEAR has too much total and also has 5% emission, and TIA is currently in a high FDV + high unlocked ratio situation, and has the highest 8% emission.

Sistine Research View

Sistine Research believes that MPLX is undervalued by 3 to 10 times for the following reasons:

· MPLX lacks a structural supply flow (issuance) and has a supply cap. If Aura network nodes are rewarded with MPLX tokens, these rewards are subsidized by a closed-loop system of Metaplex revenue, rather than generated through new issuance.

· MPLX has structural flows on the demand side, primarily in the form of MPLX buybacks. These flows are proportional to the price of SOL, as Metaplex revenues are denominated in SOL, making MPLX a highly correlated asset with relatively high demand (see WIF, POPCAT, JUP, etc.).

· MPLX trades at a fraction of the FDV of competing DA solutions. While these projects may be justified by their higher current valuations as they provide DA for multiple chains, not just Solana, Solana is currently gaining a lot of market share while many other chains have low usage. For example, Celestia does provide DA for the Mina protocol, but TIA should not be assigned a significant value at this time.

· Metaplex’s core revenue model (profiting on Solana through tooling) is continuously scalable as new programs and tools are added.

· MPLX is not currently listed on perpetual contract exchanges and is only available on Bybit, Gate and Kucoin. News of future first-tier CEXs listing spot or perpetual contracts will be a bullish catalyst.

Disclaimer

The information provided in this article is for scientific purposes only and is not intended as financial advice. This presentation does not constitute an offer to buy or sell any security or crypto asset. Please consult a professional financial advisor before you invest in any financial market.

This article is from a contribution and does not represent the views of BlockBeats