Asset Infrastructure of the Solana Ecosystem: Analysis of Metaplex's Business Model and Development Prospects

1. Introduction

The development of the Solana ecosystem is particularly noteworthy in the current cryptocurrency bull market cycle. Core metrics such as the number of active addresses and transaction fee revenue have shown significant growth:

• Active addresses: Solana's market share increased from 3.48% to 56.83%, a year-on-year growth of 1533%
• Fee income: Solana's share increased from 0.62% to 28.92%, a year-on-year growth of 4564%.

The meme token craze is the main driving force behind the rapid growth of Solana's ecosystem metrics. Besides Solana, DEX projects like Raydium have also benefited, with a significant increase in trading activity and protocol revenue.

This article will focus on another project that benefits from the Solana asset issuance boom: Metaplex. The article will discuss the following four aspects:

1. What is the business positioning and business model of Metaplex, and does it have a moat?
2. Metaplex's business data and development status
3. Background and funding situation of the Metaplex team, evaluation of the project team.
4. Does the current valuation level of Metaplex have investment value?

2. Business Positioning and Business Model of Metaplex

2.1 Metaplex product matrix

Metaplex is a digital asset creation, sales, and management system built on the Solana blockchain and supporting SVM. It provides tools and standards for developers, creators, and businesses to build decentralized applications. The asset types supported by Metaplex 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.

The main products of Metaplex include:

• Core: Next-generation NFT standard, adopting "single account design"
• Bubblegum: A program for creating and managing compressed NFTs.
• Token Metadata: Attach additional data to assets on Solana
• Candy Machine: A commonly used NFT minting and issuance program
• Fusion: NFT merging function
• Hydra: A large-scale NFT minting solution
• Aura: provides decentralized indexing and data availability services for Solana and SVM

2.2 The business model of Metaplex

Metaplex's business model is to charge for providing on-chain asset-related services. Its clients include project parties on Solana, small projects, and individual users.

The fee standards of Metaplex are relatively low. For example, the cost to mint an NFT is only 0.0015 SOL; adding metadata for a Meme project only costs 0.01 SOL. These costs are almost negligible for users.

It is worth noting that over 90% of Metaplex's protocol revenue currently comes from fungible token (Meme), rather than NFTs. This is a significant gap from public perception.

2.3 The moat of Metaplex

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

Thanks to these moats, there are currently no projects within the Solana ecosystem that can compete with Metaplex, ensuring its strong profitability.

3. Metaplex Business Data: Product-Market Fit Fully Verified

3.1 Monthly Active Users

As of November 30, 2024, Metaplex's monthly active users reached 844,966, a record high, with a year-on-year growth of 253%.

3.2 Number of assets minted by the protocol

In November, the total number of minted asset types exceeded 1.44 million, setting a new historical high. Among them, 94% were fungible tokens, while only 6% were NFTs. This ratio was 18.6% for fungible tokens and 81.4% for NFTs in January 2024.

3.3 Protocol Income

The agreement revenue in November reached 3.3 million dollars, also setting a new historical record.

Metaplex's revenue is organically growing, without any token subsidies, which fully validates the product's fit with market demand.

4. Metaplex Team Background and Financing Situation

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

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

The current team size is about 10 people, maintaining a lean and efficient structure.

In September 2024, The Block revealed that institutions such as Pantera Capital and ParaFi Capital purchased a large amount of MPLX tokens from Wave Digital Assets, with purchase prices ranging from $0.2 to $0.25.

5. MPLX: Token Utility and Valuation Level

5.1 Token Basic Information

The total supply of MPLX is 1 billion, with a current circulation rate of 75.6%.

5.2 Token Utility

MPLX is primarily used for governance voting. Starting from June 2024, Metaplex will buy back MPLX with 10,000 SOL every month.

In the future, MPLX will become the staking asset of Aura nodes, sharing Aura's profits.

5.3 Protocol Valuation

Compared to Raydium, Metaplex has a relatively higher market capitalization. However, the business positioning of the two is quite different, and the comparison is for reference only.

5.4 Potential Driving Factors and Risks

Driving factors:

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

Risk:

• Solana Meme craze fades
• Projects with fixed asset types cannot generate continuous income.

Summary

Metaplex is the foundational protocol serving all types of assets in 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.