The Three Pillars of Web3 and the Future of Decentralization Storage

Web3, as the core concept of the next generation of the internet, is built on the foundations of consensus, storage, and computing. The decentralization revolution triggered by blockchain technology is expanding across the entire internet domain, and decentralized storage is a key component of this transformation.

Peer-to-peer networks represented by Decentralization storage technology are creating a global, trustless, and immutable data storage system. In this field, some innovative projects are providing cost-effective solutions to ensure the permanence, immutability, and censorship resistance of data to meet the growing demand for NFTs and decentralized applications.

According to predictions by the International Data Corporation (IDC), global data generation will reach an astonishing 221,000 exabytes (EB) by 2026. To put this into perspective, it is equivalent to approximately 23.17 billion TB of data. Such a massive scale of data highlights the tremendous potential of Decentralization storage protocols in future markets.

In addition to the storage field, Decentralization computing is also making breakthrough progress. Some projects are developing "super-parallel" computing systems aimed at combining large AI models with smart contract technology. These systems not only possess the high-speed processing capabilities of traditional blockchains but also maintain the verifiability required by decentralized projects.

The global AI market is expected to experience explosive growth in the next decade, reaching approximately $257.516 billion by 2032, with an average annual growth rate of 19%. Decentralization AI technology is expected to address the long-standing issues of transparency and control in the field of machine learning, fostering the formation of a more equitable and open AI ecosystem while better protecting intellectual property and personal data privacy.

The continuous innovation in the field of decentralized storage and computing has placed some projects at the forefront of the Web3 movement, not only meeting the current key market demands but also laying a solid foundation for future development. These technological advancements will greatly expand the application scope and market potential of Web3.

Core Mechanism of Decentralization Storage Protocol

A certain decentralized storage protocol employs an innovative technical architecture aimed at achieving permanent data storage through a one-time payment. The core of the protocol consists of two key components: the data storage layer and the human-computer interaction layer.

The data storage layer serves as the foundation of the protocol, responsible for handling storage orders and replicating data. It adopts a consensus mechanism called Simplified Proof of Random Access (SPoRA), which requires nodes to provide cryptographic proof of access to previously uploaded data before accepting new data, thus ensuring data integrity and reliability.

On top of the data storage layer, a human-computer interaction layer that mimics the structure of the World Wide Web has been built. Unlike traditional web pages, the content on this layer has immutability, ensuring that once uploaded, websites and decentralized applications will remain unchanged forever.

The protocol also supports smart contract functionality, but it uses a different approach compared to traditional blockchain networks like Ethereum. Its smart contract platform computes the contract state only on the local machine that requests to run the contract, a design that greatly improves efficiency and scalability.

The protocol uses native tokens as utility credentials for the network. Users pay for storage space using these tokens, and a significant portion of these payments goes into a special storage donation fund. The fund is designed to ensure that it can indefinitely cover storage and network maintenance costs based on conservative assumptions of declining storage costs. Historical data shows that the average annual decline rate of storage costs is approximately -30.57%, a trend that supports the long-term viability of the protocol.

Participants in the network (such as miners) earn rewards in various ways, including transaction fees, inflationary token issuance (with the issuance rate gradually decreasing over time), and payments from donation funds.

The token economic model of the protocol includes an initial issuance of 55 million tokens, as well as an additional 11 million tokens for inflationary issuance. Over time, the issuance of new tokens will gradually decrease until the total circulating supply reaches 66 million tokens. It is worth noting that the protocol does not adopt a token burning mechanism, but maintains a fixed final supply.

Recent Developments in Decentralization Storage Networks

At the end of 2023, a certain decentralized storage network experienced a community controversy. An important participant in the network had expressed plans to fork, which sparked strong opposition within the community. Multiple ecosystem participants voiced concerns about this move, believing it could violate the network's fundamental principles. However, after communication and clarification, this disagreement was ultimately resolved, and the parties involved returned to the community.

At the same time, the network underwent a significant technical upgrade in March 2024. This upgrade introduced a coordinated mining mechanism that allows multiple nodes to work together, significantly improving the efficiency and computing power of the network. Additionally, the upgrade also added support for pooled mining, enabling miners to better share resources.

This agreement change also includes increasing the difficulty of individual block solutions to promote the generation of more complete data copies, while introducing new pricing measures and optimizing the checkpoint depth of the network. Although these changes initially sparked some controversy, the community ultimately accepted these updates as the network's performance and stability improved significantly. These technical advancements are also reflected in the price of the network's native token.

Decentralization Computing's New Paradigm

A certain Decentralization storage network is developing a new type of computing system aimed at combining the security of blockchain with the efficiency and scalability of cloud computing platforms. This system leverages the network's strong underlying architecture to address the challenges faced by zero-knowledge machine learning (zkML) in terms of scalability and efficiency. It provides a transparent, verifiable computing environment while relying on a secure, permanent data storage foundation.

The system employs parallel processing technology, capable of running multiple programs simultaneously on a large scale, similar to multitasking on a personal computer, but on a much larger scale. This approach optimizes resource allocation, allowing resources to be dynamically transferred from less active tasks to those that require more resources, much like how busy websites allocate server resources based on traffic. This intelligent management makes the entire system operate more smoothly and quickly, significantly enhancing scalability and performance to meet the ever-growing computational demands.

The system's design adopts an open data protocol, providing a flexible and modular architecture that makes upgrading and replacing various components (such as the sorter and virtual machine) straightforward.

As the core of the system, a Decentralization operating system allows developers to run command-line processes similar to smart contracts. It combines the convenience of traditional cloud server operations with the advantages of Decentralization and trustless processing. This operating system is written in the Lua programming language, which is widely used in game development, such as Roblox and Angry Birds. It supports the creation of blockchain applications compatible with various virtual machines, including the Ethereum Virtual Machine (EVM).

In this system, processes frequently interact with the underlying storage network as autonomous agents, providing an efficient data exchange mechanism for applications such as tokenized games or AI chatbots. Unlike traditional smart contract platforms, this system allows contracts to be executed automatically at scheduled times, paving the way for truly autonomous blockchain applications.

Industry Competitive Landscape

In the field of decentralized storage, a large storage network project is a major competitor. The core difference between the two lies in their storage strategies: one focuses on long-term data storage, while the other is committed to disrupting the current storage market landscape through low-cost temporary storage. The former is pioneering a whole new permanent storage market, while the latter needs to compete directly on price with tech giants like Amazon and Alibaba to secure a foothold in the cloud storage market. The development of this competitive landscape in the coming years will be the focus of industry attention.

In terms of blockchain performance, a certain decentralized storage network has recently made significant progress. As of late February, the network reached a processing capacity of over 600 transactions per second, making it one of the highest-throughput permissionless blockchains. Considering that the network's new computing system is still in its early stages, this achievement is particularly noteworthy, as its transactions per second (TPS) have already surpassed some well-known blockchain projects.

Project Background and Development History

The decentralized storage project was co-founded by two PhD students, Sam Williams and William Jones, at the University of Kent. The inspiration for the project came from a walk in Scotland, combined with Jones's technical insights. Their shared vision led to the creation of this blockchain technology-based permanent data storage platform.

The project successfully raised a large amount of funds through multiple rounds of financing.

• The early financing in October 2017 raised $8.7 million.
• The seed round financing in December 2017 raised 5 million dollars.
• The two rounds of community token sales in March and June 2018 raised $900,000 and $675,000 respectively, with a token price of $0.132, providing substantial returns for early investors.
• The private placement round in February 2020 raised $8.3 million.

Well-known investment institutions such as Coinbase Ventures and Andreessen Horowitz also participated in the investment. The public token issuance in 2020 further strengthened the project's financial foundation. The project adopts a DAO governance model to ensure the community can lead the decision-making and voting process.

The project has developed into an important component of the Web3 ecosystem. As of the third quarter of 2023, its ecosystem includes over 130 projects based on the storage network. The network has processed over 1 billion on-chain transactions, demonstrating its growing adoption rate and strong infrastructure support.

Positive Factors for Project Development

• The launch of the new computing system has enhanced the project's position in the AI field.
• The system enables decentralized applications to efficiently access and store data, opening up new possibilities for machine learning and AI integration.
• The super-parallel architecture promotes the efficient training and deployment of AI models, while the modular setup provides an ideal environment for developing DeFi applications.
• The market's expectations for early adopters possibly receiving airdrops have increased.
• The new computing system addresses the scalability and efficiency challenges of zero-knowledge machine learning, introducing a transparent and verifiable computing system.
• In 2023, the volume of online transactions increased significantly, processing about 100 million transactions per month, surpassing the data from 2022.
• It is expected that in 2024, with the improvement of TPS in the new system and its application in AI and machine learning, trading volume will further increase.

Challenges Faced by the Project

• The testing phase of the new computing system may expose technical issues, including potential vulnerabilities and network access problems.
• The ability to effectively scale AI models on-chain has not yet been fully validated, and there remains uncertainty regarding the overall functionality.
• The integration of old and new tokens may face difficulties, introducing additional market uncertainty.
• As storage and computing demands increase, despite the latest advancements, projects may still face challenges.