Looking back at the decentralized storage track that has been neglected by the market from EthStorage

One of the hottest tracks this year should be the L2 track that enhances the scalability of blockchain. Once successfully implemented, faster speeds and lower costs will promote the gradual prosperity of Web3 applications. The generation of a large amount of data in the future will demand explosive storage. This article will focus on EthStorage, the first place winner in this year’s EDCON Super Demo, and look back at the decentralized storage track, which has low market heat but huge potential.

1. Development process of network storage

Consensus, computing, and storage are the three pillars and underlying infrastructure of Web3. When data and information are generated, storage is needed. Since the birth of computers, storage technology has been developing through exploration and breakthroughs, which can be divided into four stages in this article.

1) Centralized storage: centralized storage + centralized management

Computers initially used paper tape to record data, and later IBM manufactured the first hard disk in 1956 as a storage medium, which is the storage method we are familiar with today.

The equipment for centralized storage has been iterated, such as hard drives, magnetic tapes, storage cards, SSDs, etc. However, the storage architecture is fixed. Terminal devices can access and request data from storage resources through the network, but all data storage resources are centralized in one central location or server, under unified control and management.

2) Cloud storage: distributed storage + centralized management

In 2006, Amazon AWS was launched and introduced EC2 and S3 cloud storage services. Since then, storage has entered a new era, and companies like Microsoft, Google, Alibaba, etc. have followed suit, making it the most widely used storage method now.

Cloud storage applies a distributed storage architecture, using multiple servers to store data, splitting the data into multiple server backups, reducing single point failures, and having features like reducing data redundancy and elastic scalability. However, the servers of cloud storage are managed centrally by cloud service providers, and the actual control of data does not belong to users.

3) Traditional blockchain storage: distributed, full-node storage + decentralized management

Since the birth of Bitcoin, blockchain network storage has become an alternative to centralized storage and management. Through distributed storage, consensus mechanisms, and transaction verification mechanisms, blockchain ensures data security and immutability, while also meeting the characteristics of decentralized storage and management.

However, the storage costs and efficiency of blockchain networks such as Bitcoin and Ethereum are high. This is mainly because the network architecture of these blockchains is not designed from a storage perspective. Each node has to store a copy of the data, and the block space is limited. Taking the example of Boring Bananas NFT, storing one on the Bitcoin or Ethereum network costs at least hundreds of dollars.

Source: Fundamental Labs

4) Web3 decentralized storage: distributed, multi-node storage + decentralized management

Because storing data directly on the blockchain is very expensive, many web3 decentralized storage solutions and projects have emerged, such as IPFS, Filecoin, Storj, Arweave, Swarm, EthStorage, etc. The goal of these projects is to increase storage space and reduce costs while maintaining decentralized storage and management, using technologies such as data fragmentation, multi-node storage, on-chain proof, etc.

II. ETH Modularity and World Computer

1. ETH Modularity

Since the ETH roadmap centered around Rollup started in 2021, Ethereum’s modularity has begun to be established. It splits the various layers of a single all-in-one chain (*monolithic blockchain), and different modules or chains can assume different functions at different layers to achieve scalability. This direction is also referred to as the “Endgame” by Vitalik.

Ethereum, as a representative of blockchain, splits the chain into four key layers:

(1) Execution Layer: transaction processing, smart contract execution, computation, etc.

(2) Settlement Layer: verification of execution results, dispute resolution, and settlement status commitments.

(3) Consensus Layer: determining the order, validity, and consistency of transactions among nodes.

(4) Data Availability Layer: ensuring data usability, storage, and verifiability.

When it comes to a monolithic blockchain, the blockchain handles all four functions and faces the “trilemma of blockchain.” Modularizing the blockchain can split the four functions into multiple specialized layers to solve different problems.

After ETH is modularized, the ETH main chain becomes L1, and many L2 solutions have emerged on top of it, mainly serving as the execution layer of ETH. For example, OP Stack’s L2 technology has also developed a modular architecture to enhance future scalability. Through modularization and Rollup, ETH will mainly focus on the Data Availability Layer (DA) and Consensus Layer in the future, becoming the mainstream and most secure base layer, while other layers’ functions will be upgraded through other chains and solutions to achieve scalability and improve overall ETH ecosystem scalability.

2. World Computer

The goal of Ethereum is to build a world supercomputer. Currently, Ethereum has done well in terms of security, but it is still breaking through in terms of scalability. Rollup is an important direction to solve scalability. The modular approach can to some extent solve the trilemma of blockchain, but to become a supercomputer, it also needs to face three challenges: consensus, computation, and storage. These three challenges are interrelated and mutually constraining.

Source: “Towards World Supercomputer”

The different priorities of these three challenges will result in different trade-offs:

Strong consensus ledger: inherently requires redundant storage and computation, thus not suitable for scalable storage and computation.

Strong computational power: requires repeating consensus when executing a large number of computation and proof tasks, thus not suitable for large-scale storage.

Strong storage capacity: It needs to reuse consensus when executing frequent random sampling space proofs, so it is not suitable for computation.

Currently, traditional L2 solutions also face the problem of centralized sorters and balancing computational efficiency, and cannot provide strong storage capacity. The authors of the article “Towards World Supercomputer” proposed a bottom-up architecture based on the partitioning of world computers by function to solve the three dilemmas of becoming a world computer.

That is, the final world supercomputer will be composed of three topologically heterogeneous P2P networks, similar to building a physical computer, connecting consensus ledgers, computing networks, and storage networks through trustless buses (*connectors) such as zero-knowledge proof technology, and assembling them into a world supercomputer. Other components can be added according to the needs of specific applications, and selecting and connecting each component appropriately will achieve a balance between consensus ledgers, computing power, and storage capacity, ultimately ensuring the decentralization, high performance, and security of the world supercomputer. Among them, EthStorage acts as a solution for the storage module in the supercomputer architecture.

Source: “Towards World Supercomputer”

If based on this framework, the transaction process of Ethereum’s world supercomputer will be divided into the following steps:

(1) Consensus: Use Ethereum to process and reach transaction consensus.

(2) Computation: The zkOracle network verifies proofs and consensus data passed by zkPoS as a bus, and performs related off-chain computations.

(3) Consensus: In some cases, such as automation and machine learning, the computing network will send data and transactions back to Ethereum or EthStorage through proofs.

(4) Storage: For storing a large amount of data from Ethereum, such as NFT metadata, zkPoS acts as a messenger between Ethereum smart contracts and EthStorage.

Source: “Towards World Supercomputer”

III. ETH Storage

1. Introduction

EthStorage is the first Layer 2 solution that provides programmable dynamic storage based on Ethereum’s data availability, which can extend programmable storage to hundreds of TB or even PB levels at a cost of 1/100 to 1/1000.

The team has twice received funding from the Ethereum Foundation to support research in the direction of data availability and L2 dynamic data set storage proof using Ethereum L1 contracts. They also won first place in the 2023 EDCON Super Demo.

2. Technical Features

(1) Highly integrated with ETH

The client of EthStorage is a superset of the Ethereum client Geth, which means that when running a node of EthStorage, it can still participate in any process of Ethereum normally. A node can be a validator node of Ethereum and a data node of EthStorage at the same time. The Data Provider module of each EthStorage node will initiate a connection request to other EthStorage nodes’ Data Providers. When they are connected to each other, they actually form a decentralized storage network.

Source: “EthStorage – The First Ethereum Storage L2”

Users of EthStorage can directly use existing wallets to interact with all applications built on top of the storage, whether it is NFTs, decentralized social networks, or decentralized games, in order to minimize the entry barrier for users to access EthStorage. At the same time, the EVM-compatible EthStorage can bring excellent interoperability to smart contracts. For example, if user A wants to set an image for the NFT they mint, with EthStorage, A only needs to execute one Ethereum transaction. However, when using Arweave, A needs to submit one Arweave transaction and two Ethereum transactions, and cannot achieve synchronous execution like EthStorage.

Source: “EthStorage – The First Ethereum Storage L2”

(2) Decentralized solution based on DA layer for L2

Actually, EthStorage adopts a similar architecture to L2. A storage contract will be deployed on Ethereum as the entry point for data operations in EthStorage. At the same time, the proof of off-chain storage data, which stores data off-chain, also needs to be verified through this contract.

Compared with the current L2:

Rollup (L2) stores the state tree off-chain, and the commitment on-chain is the root of the state tree. After receiving new data, Rollup also needs to execute transactions off-chain to complete the state transition process and establish a new state tree;

EthStorage stores data off-chain, and the commitment on-chain is the proof of data storage. After receiving a request to update storage data, EthStorage will generate new storage proofs for these data.

From the above, it can be seen that the current direction of Optimism Rollup or ZK-Rollup for scalability is to scale the computing power of Ethereum, while the direction of EthStorage Rollup for scalability is to scale the data storage capability of Ethereum.

At the same time, EthStorage is a modular storage layer that can be run on any blockchain as long as there is EVM and DA to reduce storage costs (*but currently, many Layer1 do not have DA). It can even run on Layer2. For example, EthStorage is currently considering how to use its technology to implement fraud proofs on Optimism. Corresponding DA layer has also been enabled on Optimism.

(3) Achieving dynamic storage

From the perspective of system design architecture, Filecoin and Arweave are more suitable for static storage, where a large amount of data can be uploaded to decentralized storage, but cannot be modified or deleted, and can only be re-uploaded with new data. Thanks to the key-value storage paradigm, EthStorage supports CRUD, which means creating new storage data, updating storage data, reading storage data, and deleting storage data. This is easy to achieve in centralized storage but currently only EthStorage can achieve it in decentralized storage.

Source: Official EthStorage

(4) Creating Ethereum Network Access Protocol

On the Internet of Web2, browsing web pages, sending emails, downloading files, and other behaviors all rely on the HTTP protocol, which is one of the most common protocols on the Internet. The HTTP protocol defines how resources are transmitted and exchanged between clients and servers. URL is the identifier for specifying the location of these resources on the Internet. When typing a website address or clicking a link in a web browser, an HTTP request is triggered, which uses the URL to determine the requested resource. The web browser parses the URL, then communicates with the server using the HTTP protocol, requests the specific resource, and displays it to the user after receiving a response from the server. The HTTP protocol and URL work closely together to form the foundation for browsing, interacting, and transmitting resources on the web. However, the data of Web2 web pages or internet services is hosted on centralized servers. When the server’s subscription is not renewed, the cloud service used by the application will stop, and the application’s data will be deleted by the centralized service provider.

EthStorage founder Zhou Qi proposed a Web3-based network access protocol called ERC-4804, which was finally reviewed and approved through EIP. ERC-4804, fully named “Web3 URL for EVM Call Information Decoding”, is an HTTP-style Web3 URL (*web3://) for calling information on the EVM. It is the first network access protocol on Ethereum. Unlike Web2, which accesses server resources, the web3:// access protocol directly renders resources hosted on Ethereum smart contracts, including HTML, CSS, PDF files, and so on.

In simple terms, web3:// (*http://web3url.io) is a decentralized version of http://. It adds a decentralized presentation layer to Ethereum, allowing users to directly browse web content, such as web pages, images, songs, etc., on the EVM, while the EVM serves as a decentralized backend.

Source: EthStorage Official

3. Current Situation and Plans

(1) Product Applications

Through EthStorage, internet applications can be re-enabled using decentralized storage as the underlying layer (*currently, many Dapps still use centralized storage methods), such as dynamic NFT, on-chain music NFT, personal websites, hostless wallets, Dapps, Deweb, etc.

Source: EthStorage Official

Take DeWeb as an example:

We know that Ethereum is a decentralized network, and many decentralized Dapps have emerged on Ethereum. However, these Dapps are not completely decentralized. Many applications’ frontends are still hosted through centralized cloud services. For example, Uniswap’s frontend webpage downtime, removal of trading pairs, and Tornado.Cash’s frontend service being suspended due to suspected money laundering are all because their frontends are hosted on centralized servers, making it difficult to withstand censorship. However, using EthStorage’s solution, web page files and data are hosted in smart contracts and jointly operated and maintained by a decentralized network, greatly enhancing censorship resistance. DeWeb can be realized through the programmability of smart contracts, enabling interesting applications such as De-github, De-blog, and various Dapp frontends.

Source: Official website of EthStorage

Currently, EthStorage has not announced any token plans, but in the test network, you can test and interact with the test token W3Q.

(2) Roadmap

According to the roadmap released by EDCON, in 2023, EthStorage will mainly be in the test network stage and will adapt to the development and testing of the Ethereum Cancun upgrade. In 2024, it may go live on the mainnet, fully integrating Danksharding, CL+EL clients, and Web3 browser access.

Source: Official website of EthStorage

IV. Overview of other storage projects

(1) Filecoin: Filecoin is a decentralized storage network built on IPFS with incentive mechanisms. IPFS is a protocol that uses a distributed hash table (DHT) for storing, addressing, and transmitting data (similar to the HTTP protocol). Filecoin acts as the incentive layer for IPFS and also serves as an open storage market. Filecoin uses a contract-based model to ensure data persistence and combines zero-knowledge proofs, especially space-time proofs and replication proofs. On March 14th of this year, Filecoin announced the official launch of the Filecoin Virtual Machine (FVM) to support smart contracts and user programmability.

The characteristics of Filecoin are: having a separate chain and incentive system; large space for static storage and low cost; support for FVM virtual machine after upgrade.

(2) Arweave: Arweave adopts the “pay once, store forever” model, where a one-time payment covers the cost of permanently storing the data, and retrieving the data does not require additional payment. Arweave uses random access succinct proofs to create a native data structure called the Blockweave, where each block is linked to a previous block and a recall block in history. For nodes, the prerequisite for forging a new block is to synchronize a Recall-Block and the latest generated block data.

The characteristics of Arweave are: having a separate chain and incentive system; on-chain storage and permanent storage; relatively weak interoperability with other chains.

(3) BNB Greenfield: Greenfield focuses on promoting decentralized data management and access, aiming to connect data storage and management with the DeFi environment of the Binance Smart Chain (BSC) by simplifying data storage and management and linking data ownership with the BNB Greenfield dApps and core infrastructure.

The characteristics of BNB Greenfield are: the final piece of the Binance “trinity” ecosystem network, strong operability within the ecosystem, the circulation and use of BNB across various chains; adopting the concept of Amazon S3 “storage bucket”; off-chain storage and on-chain verification.

V. Summary

Storage is one of the three pillars of the Web3 network. Only by implementing decentralized storage can we truly achieve data ownership and sovereign networks. Otherwise, the significance of developing blockchain networks at the cost of sacrificing centralization efficiency is limited. This track belongs to the underlying foundation, has great potential, and carries significant meaning.

Currently, compared to other tracks, decentralized storage has a relatively low popularity in the market, mainly due to the undeveloped stage and insufficient demand. When the development of L2 makes Dapp applications cheap and fast, the accumulation of a large amount of data and the demand for value will push the market’s enthusiasm towards decentralized storage.

EthStorage, as an emerging project, has a good ecological foundation in Ethereum and strong interoperability. It can be combined with other L1 and L2 layers with DA, providing new development directions and solutions. Currently, decentralized storage projects all have their own main directions and are continuously developing, looking forward to the era when the market gears towards the storage track.


1. EthStorage Official Website

2. “Towards World Supercomputer” by Xiaohang Yu, Kartin, msfew — Hyper Oracle, Qi Zhou — ETHStorage

3. “EthStorage — The First Ethereum Storage L2” by 0xhhh, 0xCryptolee

4. “Decentralized Storage: A Pillar of Web3” by Fundamental Labs

5. “Modular Blockchain: Engineering Solutions for Ethereum to Become a ‘World Computer'” by IOBC Capital

6. “EthStorage: Scaling the Storage Performance of Ethereum Ecosystem” by Mint Ventures, original author: Alfred

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