Case Study: Dialect onboards the masses through decentralized social messaging and NFT stickers

by Solana Foundation

Case Study: Dialect onboards the masses through decentralized social messaging and NFT stickers

Collecting, appreciating, and sharing art is human nature. This is true with digital art, too, as evident when trying to find the perfect emoji or right sticker to send over text message or popular apps like WhatsApp, Telegram, or Signal. Non-fungible token (NFT) technology has extended this behavior to digital collectibles, giving people the chance to collect digital art and express their personalities with friends. A new technology on Solana called state compression is making this inclination up to 2000 times cheaper.

Dialect, a blockchain-based mobile messaging tool, is leaning hard into state compression with its interactive messaging functionality. A social messaging app built on Solana, it lets people share their personality with their friends by letting them mint and share stickers directly within the messaging platform.

Dialect uses compressed NFTs, a new type of NFT made possible by state compression, to dramatically lower minting costs and let users share NFT stickers on a mass scale. This solves a massive pain point among NFT enthusiasts by making the already-low cost of NFT minting on Solana almost negligible — which, in turn, makes web3 experiences much more scalable for businesses.

The social nature of NFTs

Some NFT collectors focus on rarity and scarcity to drive price speculation. But there’s more to be said for the way NFTs can bring together communities and friends, explains Dialect cofounder and CEO Chris Osborn.

The company introduced the idea of making chat stickers—a concept already used in popular messaging apps like WhatsApp and Telegram—collectible and ownable, thereby giving users a way to express their unique identities.

“[NFT chat stickers are] exactly what you'd expect,” Osborn said. “They are NFTs like any other, but the art is expressive."

Such virality will be instrumental in bringing web3 to mainstream adoption, Osborn predicts. This insight isn’t new: At its height in the late 1990s and early 2000s, peer-to-peer chat software AOL Instant Messenger activated 36 million monthly users with custom away messages and stylized fonts. Some technologists even credit AIM for establishing early internet behavior that eventually evolved into social media norms.

“What Dialect is building is bringing us one step closer to it being seamless to own digital assets and have them show up in your digital space,” said Solana Foundation technical lead Jon Wong.

How compressed NFTs make minting in-app stickers possible

Compressed NFTs rely on a unique innovation from the Solana ecosystem known as state compression. Using a Merkle tree, a commonly known cryptographic structure that branches data into multiple “leaf” nodes connected to a single “root,” state compression stores the minimal amount of data on chain in order to confirm that an NFT’s underlying data is correct, while storing updates in the Solana ledger to take advantage of the chain’s security and decentralization. And with RPC providers and NFT indexers like Helius, Triton, and SimpleHash help with the heavy lifting of managing their own version of the tree, taking advantage of this technology is orders of magnitude easier.

Before state compression, messaging apps would have to either 1) bear the full cost of transactions to enable in-platform NFT mints, or 2) transfer those costs to the user. This has disincentivized apps and dApps from attempting to make NFTs available on a massive scale.

“When we message on iMessage, WhatsApp or Telegram, we don't pay for those messages, even though [the platform] is paying for infrastructure,” Osborn says. “The same thing goes for NFTs. There's infrastructure costs for provisioning and storing the NFT, and then there's the actual cost of the goods.”

Such infrastructure costs are now virtually negligible thanks to compressed NFTs. “What compression technology has done for Dialect is reduced the infrastructure cost to basically nothing. We can do these enormous supply launches, and we don't have to worry about users having to front the bill,” said Osborn.

Dialect’s first NFT drop, known as the “genesis” sticker, was free. “Not a single user paid a penny in any way shape or form,” Osborn said, adding that many who minted were first-time web3 users who became onboarded through the NFT minting experience, and no user has paid fees since.

“They got to try their first digital collectible at no cost to them. They got to experience true ownership,” says Osborn. “Compression tech makes it possible for us to do these drops at scale to give that ‘try before you buy’ experience that the most sophisticated web2 companies provide.”

The cost savings breakdown of compressed NFTs

Solana is already known for its cost-effective infrastructure. The normal price of NFT minting on Solana is 0.012 SOL, a comparatively low figure among blockchains.

The fee structure in a typical mint increases linearly, meaning the collector pays 0.012 SOL for each NFT they mint. But enterprises that want to issue NFTs to thousands or millions of users must employ technologies that allow NFT mints to get cheaper as volume increases. “If you think about games where the game studio wanted to issue tons of assets as NFTs… it's economically infeasible for the company to handle that,” Osborn says.

With state compression, NFT minting costs increase with scale, not linearly. Minting 100,000 NFTs costs $103, and a million NFTs (ten times the original amount) for only $30 more.

This chart is based on a snapshot taken on April 5, 2023 and based on a price of SOL at $21.14, MATIC at $1.14, and ETH at $1,909.45. See footnote.

NFT stickers for all

Osborn says the Dialect team is already observing how gamification emerges naturally through people’s innate desire to create, exchange, share and own cherished artwork in both social and private ways.

“Even in a very deep bear market, we've had a lot of excitement around what we're building,” Osborn says. “We have a waitlist, and we've been bringing users into the direct experience as quickly as we can. We're growing every week.”

While Dialect is still in beta mode, the company already has thousands of users testing its in-app sticker functionality. The first compressed NFTs were officially released in late 2022, and the team has been able to experiment with gamification and incentivization, noting which features bring users the most delight.

“You can trade and open packs, which will be fun, given the randomization,” Osborn says. Meanwhile, artists themselves are excited to recreate the iconic suite of emoji stickers in their signature styles. Already, hundreds of artists have signed up, including Joyce LiuHyblinxx, Trev El. Viz, and NFT profile picture projects like Claynosaurz. “Artists can now be like, who's going to be the next great ‘crying with laughter’ sticker that gets brought to adoption?’”

Osborn predicts the accessibility of decentralized messaging will invite mainstream users to web3, with affordable, mass-minted NFT stickers serving as a type of memento encouraging friends of web3 natives to partake.

“A messaging environment, which we think is the best medium for helping onboard more people to crypto, is contextualized,” he says. “It's social. You and your friends can teach each other how to do things. And so we see chat stickers as this entirely new mode of expression for artists and a new kind of collectability for our users and communities.”

Wong agrees: “Dialect is really great. The important lens that they're taking is that you shouldn't have to know a lot about tokens or crypto in order to use the product,” he said, adding that the company has been thoughtful about how to make web3 onboarding as simple as sending a message.

Footnote (Click to expand)