1. Introduction

If asked which L1 has developed the best business in this bull market cycle, most people would answer: Solana.
In terms of active addresses and fee revenue, Solana’s market share among L1s has grown rapidly:
Active addresses: Solana’s share of active addresses increased from 3.48% to 56.83%, a year-over-year growth of 1,533%.

L1 monthly active address market share, data source: Token Terminal.
Fees: Solana’s fee revenue share increased from 0.62% to 28.92%, a year-over-year growth of 4,564%.

L1 monthly fee revenue market share, data source: Token Terminal.
The Meme wave has been the key driver behind the rapid growth of Solana’s core metrics during this cycle. Apart from Solana, projects like Raydium, a DEX, have also benefited from the Meme wave. The active trading of Meme assets has contributed significantly to transaction volume and protocol revenue, with Raydium’s price recently hitting a new high for this cycle.
In this article, the focus will shift to another project that has benefited from the massive asset issuance on Solana: @metaplex"">@metaplex.

This discussion will address the following four questions:

• What is Metaplex’s business positioning and business model? Does it have a moat?
• How are Metaplex’s business metrics performing, and how is its growth trajectory?
• What are Metaplex’s team background and funding situation, and how should the team be evaluated?
• What is Metaplex’s current valuation level, and is there a margin of safety?

This article reflects the author’s thoughts at the time of publication and may evolve in the future. The opinions expressed are highly subjective and may contain errors in facts, data, or reasoning. Feedback and further discussion from peers and readers are welcome. However, this article does not constitute any investment advice.

The following is the main content.

2. Metaplex’s Business Positioning and Business Model

The Metaplex protocol is a system for creating, selling, and managing digital assets built on Solana and other blockchains that support the Solana Virtual Machine (SVM). It provides tools and standards for developers, creators, and enterprises to build decentralized applications. The types of crypto assets supported by Metaplex include NFTs, FTs (fungible tokens), real-world assets (RWA), gaming assets, and DePIN assets. \
Recently, Metaplex has expanded its business horizontally into other foundational service areas within the Solana ecosystem, such as data indexing (Index) and data availability (DA) services. \
In the long term, Metaplex has the potential to become one of the most important multi-domain foundational service projects in the Solana ecosystem.

2.1 Metaplex’s Product Suite

Metaplex, as an asset issuance, management, and standards system, supports both NFTs and fungible tokens. The following products form a comprehensive suite serving assets in the Solana ecosystem.
Core
Core is the next-generation NFT standard on the Solana blockchain. It adopts a “single-account design,” significantly reducing minting costs and computational power while supporting advanced plugins and enforcing royalty payments.
Background: Solana’s Account Model
To understand the advantages of the “single-account design,” it’s essential to first understand Solana’s account model and how traditional NFTs are stored.
On the Solana blockchain, all state storage (e.g., token balances, NFT metadata) is tied to specific accounts. Each account can store a limited amount of data and requires rent fees to maintain this storage. Efficiently managing accounts and on-chain data storage is a critical consideration for developers on Solana.
Traditional NFT Design
In traditional NFT design, multiple accounts are often used to store different pieces of information for each NFT. For example, a typical NFT might involve:
A main account: Stores ownership information (e.g., the current holder).
A metadata account: Stores metadata (e.g., name, description, image link).
A royalty account: Stores information related to creator royalties.
This multi-account design, while flexible, presents some challenges:
Complexity: Managing and interacting with multiple accounts increases complexity, especially when data needs frequent querying and updating.
Costs: Each account requires rent to maintain storage, leading to higher fees with more accounts.
Performance: Operations involving multiple accounts consume more blockchain resources, affecting performance and transaction speed.
Advantages of the “Single-Account Design”
Metaplex Core addresses these issues by introducing the “single-account design,” consolidating all NFT-related information (e.g., ownership, metadata, royalties) into a single account. This simplifies the account structure, reduces account costs, improves interaction efficiency, and enhances NFT scalability. This design is particularly suitable for large-scale NFT projects on high-performance, low-cost blockchains like Solana (e.g., gaming, DePIN projects).
Bubblegum
Bubblegum is Metaplex’s program for creating and managing compressed NFTs (cNFTs). Using compression technology, creators can mint a massive number of NFTs at an extremely low cost—1 billion NFTs can be minted for just 500 SOL (achieving over 99% cost reduction compared to traditional minting methods). This offers unprecedented scalability and flexibility.
Thanks to Bubblegum, large-scale, low-cost NFT minting has become possible, prompting DePIN projects like Render and Helium to migrate to Solana and inspiring innovative NFT platforms like DRiP. The table below illustrates how these three examples have applied Bubblegum technology.

Token Metadata
The Token Metadata program allows additional data to be attached to fungible and non-fungible assets on Solana. Token Metadata is crucial for information-rich NFTs, but in reality, most fungible token projects on Solana also rely on Token Metadata.
What many don’t know is that the largest meme token platform on Solana, Pump.fun, creates all of its tokens using Metaplex’s metadata service. Today, the largest demand for Token Metadata comes not from NFTs, but from the massive number of meme projects being issued.
For meme projects, using the Token Metadata program when issuing tokens offers significant benefits:

• First, it ensures the standardization and compatibility of the issued tokens. By using Metaplex’s Metadata service, these tokens will be easily recognized by mainstream wallets (such as Phantom and Solflare) and can be correctly displayed on exchanges with their names, icons, and other additional information, making seamless integration with other Solana applications possible.
• Secondly, it provides on-chain storage and transparency. The Metaplex Metadata service stores the token’s metadata on-chain, making the token’s information and data easier to verify and preventing tampering.
• The additional information, such as images and text, provides multiple dimensions for meme speculation, transforming memes from just a name and a string of contracts into a form of content that fuels meme propagation, remixing, and narrative creation.

The new Meme tokens constantly appearing on pump.fun, source: pump.fun.
With the ongoing Meme craze on Solana, more than 90% of Metaplex’s protocol revenue now comes from fungible tokens (Meme). This reality contradicts the popular perception that “Metaplex is a foundational NFT protocol in the Solana ecosystem,” leading to a significant cognitive gap.
Candy Machine
Metaplex’s Candy Machine is the most commonly used NFT minting and issuance program on Solana, enabling the efficient, fair, and transparent launch of NFT collections.
Other Product Suite
Metaplex’s other services include:
MPL-Hybrid: A hybrid NFT storage and management solution designed to combine the advantages of on-chain and off-chain storage, providing efficient and cost-effective storage for NFTs. This is particularly suitable for storing large files (e.g., high resolution) or NFTs that require dynamic updates.
Fusion: An NFT merging feature that allows users to combine multiple NFTs into a new one. This can enhance user interaction and provide more playability for NFT projects, suitable for gaming, collectibles, and art projects.
Hydra: An efficient, scalable large-scale NFT minting solution, specifically designed for projects that need to mint a large number of NFTs (e.g., gaming, social platforms, or loyalty programs).
……
Metaplex’s existing product list (for asset services) is as follows:

Image source: Metaplex Developer Documentation

Aura

In addition, in September, the Metaplex Foundation officially announced the launch of Metaplex Aura—a decentralized indexing and data availability network for Solana and SVM-based services (testnet). Through the indexing and data availability services provided by Aura, Solana and other blockchain projects adopting the SVM standard can read asset data more efficiently and support batch operations at a significantly lower cost, reducing operation costs by more than 99%, as shown in the image below:

After adopting Aura, the cost comparison of large-scale asset operations before and after implementation, source: Metaplex official Twitter.

When the product preview was released, Metaplex also listed the partner protocols supporting the product. Many of these are well-known projects within the Solana ecosystem, and they will be potential users of Aura in the future.

Source: Metaplex official Twitter

From an asset service system to data indexing and data availability service protocols, Metaplex is expanding its offerings horizontally and evolving into a full-stack foundational service platform within the Solana ecosystem.

2.2 Metaplex’s Business Model

Metaplex’s business model is simple and easy to understand: it charges for services related to on-chain assets. Some of the services mentioned in the product array above are free, while others are paid.
Although Metaplex’s direct partners are other projects on Solana, which represents a B2B expansion of its business, most of its revenue comes from small projects or retail users who utilize the services provided to larger B2B projects, including those creating fungible token projects or minting NFTs.
In my view, charging decentralized users rather than large B2B projects (such as Pump.fun) is a better business model for Metaplex because:

• Small project users or retail users make decisions more emotionally and are less price-sensitive than B2B projects. Since the service fees from Metaplex make up a small portion of their overall costs, the absolute fee per user is not high. However, when the user base becomes large enough, the total fees become significant.
• B2B projects can serve as distribution channels for Metaplex’s services, helping them reach more decentralized users without needing to invest additional effort or costs in marketing or distribution.
• The user base is more fragmented and less concentrated, making it difficult for users to bargain with basic service providers like Metaplex. This gives Metaplex the ability to maintain product margins and even raise prices when necessary.

Specifically, the fee structure for Metaplex’s products on Solana is as follows:

Image source: Metaplex Developer Documentation

As can be seen, the absolute cost of using Metaplex’s product services per individual call is relatively low. For example, the cost for a user to mint an NFT is only 0.0015 SOL; for a Meme issuer, adding text and image descriptions to their Meme project using Token Metadata costs just 0.01 SOL. These costs are negligible compared to the expected benefits for the users, or can be considered almost negligible.
Of course, it should be noted that the large-scale issuance of fungible tokens, represented by Memes, has brought revenue to Metaplex. However, the sustainability of the Meme craze is uncertain, which could affect the long-term stability of Metaplex’s income. Even for Solana, the fluctuation in the Meme craze is significant. For example, during the coldest week in September, the number of new tokens on DEX was only about one-third of what it was during the hottest period in May, while in mid-November, that number surged by a factor of ten.

Solana Dex weekly new token listings, source: Dune.

2.3 Metaplex’s Moat

In the business world, a company’s moat can come from various advantages, such as cost advantages from scale or location, value accumulation from network effects, user stickiness and pricing power from brand effects, and competitive barriers from administrative licenses and patents.
A project with a strong moat is one where new competitors entering the same market find it hard to catch up, or the cost of catching up is so high that it far outweighs the expected returns, leading to fewer competitors in the field. Financially, such a project shows steady and gradually increasing profitability, with marketing and development costs being relatively low compared to its income.
In the Web3 space, there aren’t many projects with strong moats, such as Tether in the stablecoin sector and Aave in centralized lending.
In my opinion, Metaplex also belongs to the category of projects with a moat, and its moat comes from “high switching costs” and “setting standards.”
First, once developers and users are deeply reliant on Metaplex’s tools and protocols for asset issuance and management, switching to another protocol for asset management will inevitably incur high time, technical, and economic costs.
Second, when Metaplex’s asset formats (including NFTs and FTs) become the common standard in the Solana ecosystem, and are recognized as the consensus for compatibility with various infrastructure and applications, new developers and projects will prioritize choosing Metaplex’s asset formats for their ecosystem compatibility.
Thanks to its moat, there are currently no projects in the Solana ecosystem that can compete with Metaplex, ensuring its strong profitability. This will be analyzed in the next section.
In addition to asset services, Metaplex is also testing data indexing and data availability services, which may create a second growth curve for the business in the future. Given that the target clients for this service overlap heavily with Metaplex’s existing customer base, this new business may be more easily adopted and experienced by existing partners.

3. Metaplex Business Data: PMF Fully Proven, Core Data Shows Strong Growth

Metaplex’s core business currently revolves around providing asset-related services. We can observe its core metrics, such as the number of active users, the number of projects minting assets, and protocol revenue.

3.1 Metaplex Monthly Active Users

Metaplex monthly active users refer to the unique addresses that have interacted with the Metaplex protocol in a given month.

Metaplex monthly active addresses, data source: Metaplex Public Dashboard, same below. As of the date of writing (November 30, 2024), Metaplex’s latest monthly active users reached 844,966, setting a new monthly record, with a year-over-year growth of 253%.

3.2 Number of Assets Minted Through the Protocol

The number of assets minted through the protocol refers to the types of assets created using the Metaplex protocol.

Metaplex Monthly Asset Minting Categories
As of the date of writing (November 30, 2024), the number of asset categories minted through Metaplex reached an all-time high, with over 1.44 million asset types minted in November.
What is even more noteworthy is that 94% of these assets were fungible tokens, while only 6% were NFTs. In contrast, this ratio was 18.6% versus 81.4% in January of this year. This shift indicates that Metaplex’s primary business has transitioned to fungible token asset services, rather than NFT services. The majority of these fungible token mintings are driven by the ongoing Meme coin trend.

3.3 Protocol Revenue

Protocol revenue refers to the payments received by Metaplex for providing its services.

Metaplex’s monthly protocol revenue
As of the date of writing (November 30, 2024), Metaplex’s monthly protocol revenue reached $3.3 million, marking a historic new high.

It is important to note that, unlike many Web3 projects that rely on token subsidies to drive product demand and exchange protocol revenue for project tokens, Metaplex’s business income is quite organic and does not involve direct token subsidies. It is a project that has achieved PMF (Product-Market Fit).
From this section’s data, we can observe:

• Metaplex, as an underlying asset protocol, directly benefits from the development of the Solana ecosystem. Its core metrics rise in sync with Solana’s core metrics, especially protocol revenue.
• Metaplex benefits from both NFT and FT activity, and is not just an “NFT asset service protocol.” After the Meme trend, if more active sectors emerge in Solana, such as Depin, gaming, or RWA, Metaplex’s demand space will be further expanded.
• Metaplex’s business demand is organic, and it generates income without relying on token subsidies.

Next, we will look at the team behind the Metaplex project and the situation with its project tokens.
Metaplex team: Close to the core circle of Solana’s ecosystem OGs.

Stephen Hess
The founder of Metaplex is Stephen Hess, who also serves as the chairman of the Metaplex Foundation. He founded Metaplex Studios in November 2021.
A graduate of Stanford with a focus on Symbolic Systems (a program dedicated to the design of human-computer interaction systems), Stephen Hess was also one of the earliest employees at Solana (joining when Solana was just a year old). At that time, Solana co-founder Raj invited him to join Solana to lead the product department. During his tenure, he contributed to the development of Solana’s staking system (Solana Stake Pools), the SPL governance system, and the Wormhole project. He was also a member of the team that developed the first version of the Solana NFT standard, which eventually evolved into Metaplex.
In January 2022, shortly after Metaplex’s founding, it received $46 million in strategic investment from firms such as Multicoin, Jump, and Alameda. Based on the 10.2% share in the token distribution chart for the strategic funding round, the estimated valuation for Metaplex at that time was around $450 million, which was a high first-round valuation even during the bull market.
However, just as Metaplex was about to mark its first anniversary, FTX collapsed in November 2022 due to massive financial mismanagement. Although Metaplex’s finances were not directly impacted by FTX’s collapse, Stephen Hess quickly announced a decision to lay off employees, preparing for the impending downturn in the Solana ecosystem. In retrospect, his decision proved to be very prudent. He had a clear understanding of the future and did not fall into the typical habits of many Web3 teams that spend excessively.
According to Metaplex’s current LinkedIn information, the team consists of fewer than 10 people, maintaining a lean structure. However, based on the monthly project reports, this streamlined team shows strong delivery capabilities and ambition, with high efficiency in product iteration and new product development.

Metaplex’s Monthly Work Report, Source: Official Blog
Looking back at the founder of Metaplex’s career and the project’s development history, Metaplex largely aligns with my vision of a strong Web3 team:

• The core members possess educational, professional skills, and experience backgrounds that match the entrepreneurial project, with no history of credit issues.
• They are closely connected with the core circle of their blockchain ecosystem, maintaining open communication channels, and their product philosophy is well-recognized by the ecosystem’s community.
• They have strong product intuition (avoiding many mistakes), work diligently, and deliver results efficiently.
• They have an awareness of cost control and avoid unnecessary spending.
• They secured investment from top-tier industry VCs and possess excellent business resources.

Additionally, on September 9, 2024, The Block reported that prominent firms such as Pantera Capital and ParaFi Capital purchased a significant amount of Metaplex (MPLX) tokens from Wave Digital Assets. These tokens were originally held by FTX, and the purchase price was around $0.20-$0.25, with certain lock-up terms.

5. MPLX: Token Utility and Valuation Level

5.1 Token Basic Information

The protocol token for Metaplex is MPLX, with a total supply of 1 billion tokens.

Source: Project Whitepaper
The specific token allocation is as follows:

• Creators and Early Supporters: 21.9%, with 50% distributed via airdrop within the first year (starting September 2022) and the remaining 50% unlocked monthly over the second year.
• Metaplex DAO: 16%, no lockup, distributed based on DAO proposals.
• Metaplex Foundation: 20.31%, no lockup.
• Strategic Round: 10.2%, with 50% unlocked one year after the first airdrop (September 2022) and the remaining 50% released monthly over the second year.
• Partner Everstake: 10%, locked for two years (until September 2024) and released linearly over the following year (currently unlocking).
• Metaplex Studios: 9.75%, locked for one year (until September 2023) and released linearly over two years (currently unlocking).
• Community Airdrop: 5.4%, immediately released.
• Founding Advisors: 3.34%, locked for one year and released linearly over the following year (fully unlocked).
• Founding Partners: 3.1%, locked for one year and released linearly over the following year (fully unlocked).

Based on the currently available official data, the circulating supply of MPLX stands at 75.6%, indicating that most of the tokens are already in circulation. Notably, the investors’ share has been largely unlocked, resulting in minimal ongoing unlock-induced selling pressure.
The “non-circulating” portion primarily consists of the tokens held by the Metaplex DAO, Metaplex Foundation, the treasury, and the portions still locked for Everstake and Metaplex Studios.

5.2 Token Utility

Currently, MPLX’s primary utility is governance voting. Additionally, Metaplex announced in March 2024 that 50% of protocol revenue (including historically accumulated revenue) would be used for token buybacks. The purchased tokens are added to the treasury to support protocol ecosystem development.
The protocol officially began token buybacks in June 2024, using 10,000 SOL each month to repurchase MPLX tokens. This initiative has continued for five months. Due to the rapid growth in protocol revenue, Metaplex plans to increase the monthly buyback amount to 12,000 SOL starting next month.
Beyond governance and buybacks, MPLX’s next utility will be tied to the Aura functionality. Once Aura is fully launched, MPLX is expected to serve as the staking asset for Aura nodes, enabling token holders to capture revenue generated by Aura.

5.3 Agreement Valuation

When evaluating Metaplex’s valuation, a comparative valuation method is used. However, since there are no directly comparable projects within the same track in the Solana ecosystem, I have selected Raydium as a reference for comparison. Raydium is also part of the Solana ecosystem, has similarly benefited from the Meme frenzy this year with a significant increase in protocol revenue, and has a token buyback mechanism in place.

From a comparison of protocol revenue and market capitalization, Metaplex has a relatively higher valuation.

However, it is important to note that while the two projects share some commonalities, they operate in distinct tracks within the same ecosystem with significantly different business focuses. Therefore, the above valuation comparison is only of limited reference value.

5.4 Potential Drivers and Risks

Overall, Metaplex exhibits clear strengths:

• Positioned upstream in the asset services vertical, holding the authority to set asset standards, and directly benefiting from the prosperity of the Solana ecosystem.
• Its product-market fit (PMF) is well-validated, generating positive cash flow without reliance on token subsidies and possessing a relatively strong business moat.
• Actively exploring a second growth curve based on its existing business foundation.
• The team demonstrates excellent overall quality, is closely integrated with Solana’s core ecosystem, and shows diligence, ambition, and cost-control awareness.
• The token includes a buyback mechanism, and the project has a relatively low absolute valuation (circulating market cap of $260M+, FDV of $350M+), making it a relatively lightweight market cap.

Potential drivers for Metaplex’s future market cap growth include:

• Expansion of active sectors in the Solana ecosystem beyond Meme tokens, such as Depin, gaming, RWA, or a resurgence of NFTs, leading to a larger asset issuance market.
• Listing on larger exchanges such as Binance or Coinbase, enhancing liquidity and potential valuation premium (given its real business demand and positive cash flow, the project could appeal to listing teams looking for sustainable projects).
• Directly increasing service fees. Current fees are relatively low, and the project has the capacity to raise prices. Even a 100% price hike would still represent a negligible cost for users relative to the overall cost of asset creation.

However, Metaplex also faces potential risks and challenges:

• The decline of the Solana Meme token trend, resulting in a rapid reduction in asset creation volume and subsequent revenue decrease.
• Its current revenue model is based on one-time fees for creating asset types. Projects with relatively fixed asset types may not generate ongoing revenue for Metaplex.

Summary

Contrary to the common perception among many investors that “Metaplex is an NFT asset protocol,” Metaplex is, in fact, a foundational protocol serving all asset types within the Solana ecosystem. It has directly benefited from the ongoing Meme token trend that began earlier this year.
If the Solana ecosystem continues to thrive, Metaplex, which occupies the “upstream niche” of asset issuance and management, is certainly worth long-term attention.

References and data sources

Project data:https://analytics.topledger.xyz/metaplex/public/dashboards/T50WQTTu2Cbz8hG0vge18izUO5ghEDrWhzb92knN

white paper:https://whitepaper.metaplex.com/whitepaper.pdf

Official bloghttps://www.metaplex.com/blo

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