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

The community first noticed Tiny SPL because it was retweeted and pinned by Solana co-founder Anatoly on his Twitter homepage. BlockBeats introduced Tiny SPL in an article titled "What is the new token standard Tiny SPL that was pinned by the Solana founder on Twitter?" published on January 5th.

Deez Nuts was initially available for free minting, and after being minted, the floor price of DN rapidly dropped to less than 0.001 SOL after breaking through 0.2 SOL. Recently, with the launch of AMM trading, the liquidity of Deez Nuts has been activated, and Tiny SPL has once again attracted attention.

Introduction of Tiny SPL with State Compression Method

The special feature of Tiny SPL is the introduction of "state compression" method, which allows users to hold tokens on Solana without paying storage rent.

Rent is a unique concept in the Solana account model. Unlike transaction fees, which are paid to process instructions on the network, rent is the cost of storing data on the Solana blockchain. Unlike Ethereum, Solana charges a fee for storing data status on its network, which is called rent. Rent is charged periodically based on the balance of tokens stored in the 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 If an account cannot pay the rent, the system will delete the account to reduce storage costs for data that is no longer maintained.

VanEck, a company in the cryptocurrency industry, mentioned in a valuation report on Solana that the rental storage cost on Solana is 0.00000348 SOL per byte, with a wallet data size of 372 bytes, and each active wallet holder must reserve 0.0026 SOL. Similarly, applications and token smart contracts must also maintain these storage costs. A program like Serum, which is approximately 340KB in size, needs to maintain a balance of 2.4 SOL to avoid paying rent.

The state compression method is a new data storage method launched by Solana in April 2023. It can compress the verifiability of Merkle trees into a hash, allowing developers to store small amounts of data on the chain and update them directly in the Solana ledger, greatly reducing data storage costs while maintaining the security and decentralization of the Solana underlying system. This is also why the logo of Tiny SPL is an upside-down tree.

Currently, state compression methods have significantly reduced the cost of NFT minting on Solana. According to the Solana Foundation, as of April 5, 2023, minting 1 million uncompressed NFTs on Solana costs over $250,000, while using state compression reduces the cost to approximately $110 per NFT. Previously, the popular DePIN project Helium Mobile minted nearly 1 million NFTs on Solana at a cost of only $113 per NFT.

Related reading: "Detailed explanation of current popular DePIN projects: Honey, DIMO, and Helium (Mobile)

Therefore, through the state compression function, Solana can provide creators and brands with a way to offer a large number of NFTs to a wider audience without paying a lot of costs. Now, Tiny SPL applies the state compression method to token assets, and compared with tokens that use the regular SPL standard, Tiny SPL tokens do not need to pay rent. In addition, Tiny SPL tokens will not be displayed in the user's wallet balance, but only visible in the NFT section. The token asset based on Tiny SPL is called "DN (Deez Nuts)", and because the corresponding image is two peanuts, it is also called "peanuts" in the Chinese community.

What can users do?

Currently, the liquidity pool of Tiny SPL has been launched, supporting token transactions of Tiny SPL standard. Users can enter https://tinys.pl/, link their wallet, and click "Swap" to enter the trading interface. Simply enter the amount to be traded and click "Swap" to complete the transaction.

Due to the fact that Deez Nuts can be split or merged, only users who hold the largest share of Deez Nuts can trade them. Therefore, if you want to sell Deez Nuts, you can merge them in advance. The process of splitting and merging Deez Nuts has been introduced in "What is the new token standard Tiny SPL, which was tweeted by the founder of Solana?".

除了交易，用户还可以将持有的 NUTS 加入到 AMM 池中作为 LP，截至目前已经有超 1300 多个 SOL 被添加到 AMM 池中。贡献者将在 LP 池中锁定 1 个月，之后所得 LP 代币将按比例返还给贡献者。初始 LP 贡献者将赚取代币锁定当月交易量的全部 1% 交易费。

In addition to trading, users can also add their NUTS holdings to the AMM pool as LP. As of now, over 1300 SOL have been added to the AMM pool. Contributors will lock their holdings in the LP pool for 1 month, after which they will receive LP tokens in proportion to their contribution. Initial LP contributors will earn 1% of the trading fees for the month in which their tokens are locked.

The "rebirth" of Deez Nuts is inseparable from the efforts of sol_idity, the founder of Tiny SPL. After launching Deez Nuts, the founder developed batch synthesis and AMM trading functions while continuously calling on the DEX aggregator birdeye on Solana to add indexes for DN. Thanks to the joint efforts of the founder and the community, Deez Nuts achieved its fundraising goal of 800 SOL / 400,000 NUTS within 24 hours after calling for donations on its official Twitter account on January 20th.

According to the founder, new utilities will be created for the Tiny SPL token, improvements will be made to the wallet's support for the protocol, and the Tiny SPL standard will be open-sourced in the coming weeks. It should be noted that, on the one hand, as "state staking" technology demonstrates greater potential for application, Deez Nuts, as the first token protocol to adopt this technology, is positioned as "ORDI on Solana" in the eyes of optimistic investors. However, Deez Nuts' current positioning is more like a combination of meme and NFT, with no actual use cases yet, so investors should carefully evaluate the risks when trading.

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