Deez Nuts Reborn with Doubling in Value After AMM Launch, Topped by Solana's Founder

introduction

On January 27th, the Solana ecosystem’s new token standard, Tiny SPL, launched AMM trading. Subsequently, its token DN (Deez Nuts) saw a 24-hour floor price increase of 185%, reaching 0.004SOL as of the time of writing.

The community first took notice of Tiny SPL when it was retweeted and pinned to the top of the Twitter homepage by Solana co-founder Anatoly, as introduced in the article published by BlockBeats on January 5th, “What is the New Token Standard Tiny SPL Pinned by Solana’s Founder on Twitter?”

Originally, Deez Nuts could be minted for free. After the minting was completed, the floor price of DN rapidly fell to less than 0.001 SOL after breaking through 0.2 SOL. Recently, with the launch of AMM trading features, the liquidity of Deez Nuts was activated, and Tiny SPL once again came into the spotlight.

The State Compression Method Introduced by Tiny SPL

The special feature of Tiny SPL is the introduction of the “state compression” method, which allows users to hold tokens on Solana without needing to pay for storage rent.

“Rent” is a unique concept in the Solana account model. Unlike transaction fees, which are paid for processing instructions on the network, rent is the cost of storing data on the Solana blockchain. Different from Ethereum, Solana charges a fee for storing data state on its network, which is referred to as rent. The rent is periodically charged based on the size of the token balance stored in an account. If an account cannot pay the rent, the system will delete the account to reduce storage costs for data that is no longer maintained.

Investment management company VanEck mentioned in a valuation report on Solana that the rent storage fee on Solana is 0.00000348 SOL per byte, with wallet data size being 372 bytes, and each active wallet holder must retain 0.0026 SOL. Likewise, applications and token smart contracts must also maintain these storage costs. A program like Serum, which is about 340KB in size, needs to keep a balance of 2.4 SOL to avoid paying rent.

To reduce the costs associated with rent, Solana launched a new method for storing data in April 2023, known as “state compression,” which can compress the verifiability of a Merkle tree into a hash (this is why the logo of Tiny SPL is an inverted tree), allowing developers to store a small amount of data and directly update it in the Solana ledger. This significantly reduces data storage costs while maintaining the security and decentralization of the Solana base layer.

Currently, the state compression method has significantly reduced the cost of minting NFTs on Solana. According to the Solana Foundation, as of April 5, 2023, the cost of minting 1 million uncompressed NFTs on Solana exceeded $250,000. However, the cost of minting NFTs using state compression is approximately $110. Previously, the popular DePIN project Helium Mobile minted nearly 1 million NFTs when migrating to Solana, with the minting cost only being $113.

Therefore, through the state compression feature, Solana can offer creators and brands a way to provide a large volume of NFTs to a broader audience without incurring significant costs. Now, Tiny SPL applies the state compression method to token assets. Compared to tokens using the standard SPL, Tiny SPL tokens do not need to pay rent. Tiny SPL stores tokens on the chain similar to Ordinals, and the token asset based on Tiny SPL is “DN (Deez Nuts)”, because the corresponding image is two peanuts, so the Chinese community also calls it “peanuts”. Deez Nuts can be traded as NFTs through NFT marketplaces, as well as traded as tokens through AMM.

What Can Users Do?

Currently, the liquidity pool for Tiny SPL has been launched, supporting the trading of tokens based on the Tiny SPL standard. Users can go to https://tinys.pl/, link their wallet, and click on Swap to enter the trading interface. Simply enter the amount you want to trade and click “Swap” to execute the transaction.

Since Deez Nuts can be split or merged, only the user holding the largest share of Deez Nuts can conduct transactions. Therefore, if you want to sell Deez Nuts, you can merge your Deez Nuts in advance. The process of splitting and merging Deez Nuts has been introduced in the article “Highlighted by Solana’s founder on Twitter, What is the New Token Standard Tiny SPL?”

Besides trading, users can also add their NUTS to the AMM pool as LP (Liquidity Provider), and as of now, more than 1300 SOLs have been added to the AMM pool. Contributors will lock their LP tokens in the pool for one month, after which the LP tokens will be returned to the contributors proportionally. Initial LP contributors will earn the entire 1% transaction fee from the trading volume of the month when the tokens are locked.

The “rebirth” of Deez Nuts would not have been possible without the effort of Tiny SPL’s founder, sol_idity. After launching Deez Nuts, the founder developed batch synthesis and AMM trading functionalities while continuously urging the Solana DEX aggregator birdeye to add an index for DN. Thanks to the founder and the community’s joint effort, Deez Nuts achieved its fundraising goal of 800 SOL / 400,000 NUTS within 24 hours after calling for donations on Twitter on January 20.

According to the founder, the next few weeks will focus on creating new utilities for Tiny SPL tokens, improving wallet support for the protocol, and open-sourcing the Tiny SPL standard. sol_idity today retweeted a poem, the first letters of each line of which spell out “NFT SOON.”

It is important to note that, on one hand, as the “state staking” technology shows greater application potential, Deez Nuts, being the first token protocol to adopt this technology, holds a position like “ORDI on Solana” in the eyes of optimistic investors. However, Deez Nuts currently resembles more of a combination of meme and NFT, lacking practical application scenarios, so investors should carefully assess the risks when trading.

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