Metaplex: Asset Infrastructure of the Solana Ecosystem

1. Introduction

Solana has performed remarkably in this bull market cycle, with a significant increase in both the number of active addresses and the market share of fee income. The meme craze has been the core driving force behind the rapid growth of Solana's various metrics. Besides Solana, DEXs like Raydium have also benefited from this.

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

• What is Metaplex's business positioning and business model? What are its competitive advantages?
• What is the business data of Metaplex like? What are the development trends?
• What is the background and funding situation of the Metaplex team?
• What is the current valuation level of Metaplex? Is it undervalued?

2. The business positioning and business model of Metaplex

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

Metaplex has recently expanded its business into the fields of 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.

2.1 Metaplex Product Matrix

The main products of Metaplex include:

• Core: The next generation NFT standard, adopting a "single account design"
• Bubblegum: A program for creating and managing compressed NFTs ( cNFT ).
• Token Metadata: Attach additional data to assets on Solana
• Candy Machine: NFT minting and issuance program
• MPL-Hybrid: Hybrid NFT storage and management solution
• Fusion: NFT merging feature
• Hydra: Large-scale NFT minting solution
• Aura: Decentralized Indexing and Data Availability Network ( Testnet )

2.2 Metaplex's Business Model

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

The fee structure of Metaplex is relatively low. For example, the cost for a user to mint an NFT is only 0.0015 SOL; when adding graphic and text information for a Meme project using Token Metadata, it only costs 0.01 SOL per instance.

2.3 The Moat of Metaplex

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

• After developers and users deeply rely on Metaplex tools, the cost of switching to other protocols is high.
• The asset format of Metaplex has become the standard within the Solana ecosystem, and new projects tend to choose the more compatible Metaplex.

3. Metaplex business data: Core metrics show strong growth

3.1 Monthly Active Users

As of November 2024, Metaplex's monthly active users reached 844,966, setting a historical high, with a year-on-year growth of 253%.

Number of assets minted by agreement 3.2

In November 2024, the monthly asset minting types of Metaplex exceeded 1.44 million, setting a new historical record. Among them, 94% were fungible tokens and 6% were NFTs.

3.3 Protocol Revenue

In November 2024, Metaplex's monthly protocol revenue reached $3.3 million, also setting a historical record. It is worth noting that Metaplex did not provide token subsidies, and the revenue growth was relatively organic.

4. Metaplex Team Background

Metaplex founder Stephen Hess was an early employee at Solana and participated in the development of several core projects. The team is small but has strong product delivery capabilities and has received investment support from institutions including Multicoin and Jump.

5. MPLX Token and Valuation Analysis

5.1 Token Basic Information

The total supply of MPLX is 1 billion, with a current circulation rate of 75.6%. In the token distribution, creators and early supporters account for 21.9%, Metaplex DAO accounts for 16%, the foundation accounts for 20.31%, and the strategic round accounts for 10.2%, among others.

5.2 Token Utility

MPLX is mainly used for governance voting. Starting from March 2024, Metaplex will use 50% of the protocol revenue to buy back tokens. After the Aura feature is launched, MPLX is expected to become the staking asset for nodes.

5.3 Protocol Valuation

Using Raydium, which is also part of the Solana ecosystem, as a reference, the valuation of Metaplex is relatively high. However, the business positioning of the two is quite different, and it only has certain reference value.

5.4 Potential Driving Factors and Risks

The advantages of Metaplex include:

• Located upstream in asset services, directly benefiting from the prosperity of the Solana ecosystem.
• The product has validated PMF and has a clear business moat.
• Actively expand new growth curves
• The team has good quality and maintains close relationships with the core ecosystem.
• The token has a buyback mechanism, and its market capitalization is relatively small.

Potential upside drivers:

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

Potential Risks:

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

summary

Metaplex is actually a foundational protocol serving all types of assets within the Solana ecosystem and is a direct beneficiary of the Meme craze. For investors who are optimistic about the Solana ecosystem, Metaplex is worth long-term attention.