The Three Pillars of Web3 and the Rise of Decentralization Storage

Web3, as a new generation of internet technology, is driving the decentralization transformation of the internet based on three core elements: consensus, storage, and computation. Blockchain technology has initiated this revolution, while Web3 expands it to the entire internet domain.

In terms of Decentralization storage, peer-to-peer networks have created a global, trustless, and immutable data storage system. As a pioneer in this field, a certain storage platform provides cost-effective solutions that ensure the permanence, immutability, and censorship resistance of data, meeting the growing demand for NFTs and decentralized applications.

According to predictions by the International Data Corporation, the global data generation will reach approximately 221,000 exabytes (EB) by 2026. To give a more intuitive understanding of this figure, 1 EB is equivalent to 1,048,576 TB, which means that the total global data volume will be close to 231.7 billion TB by 2026. Such a massive scale of data highlights the immense market potential of Decentralization storage protocols.

At the same time, the field of Decentralization computing is also rapidly developing. A certain storage platform has launched a new type of computing system aimed at combining large-scale AI models with smart contract technology. This system integrates the speed of high-performance blockchain with the verifiability required by Decentralization projects.

The global AI market is expected to grow to approximately $257.516 billion by 2032, with an annual growth rate of 19%. Decentralization AI technology is expected to address transparency and control issues in traditional machine learning, promoting the development of a fair and open AI ecosystem while protecting intellectual property and personal privacy. An innovative storage platform in decentralized storage and computing has made it a pioneer in the Web3 movement, meeting key market demands and expanding its growth potential.

Core Mechanism of Decentralization Storage Protocol

A certain Decentralization storage protocol has designed an innovative data storage solution that achieves permanent data storage through a one-time payment. The protocol primarily consists of two key components: a distributed storage layer and a human-machine interaction layer.

The distributed storage layer is responsible for handling storage orders and replicating data. It employs a consensus mechanism known as succinct random access proofs, which requires nodes to provide cryptographic proof of access to previously uploaded data before accepting new data.

The human-computer interaction layer mimics the structure of the traditional World Wide Web, but unlike conventional web pages, the content here cannot be changed once uploaded, ensuring the immutability of the website and applications.

The protocol also supports smart contract functionality. Unlike traditional blockchains such as Ethereum, the execution of smart contracts here occurs only on the requester’s local machine, enhancing efficiency and scalability.

The protocol uses native tokens as a medium of exchange. Users pay a one-time fee when storing files, with most of the fees going into a dedicated storage fund. This fund is intended to cover storage expenses in the long term based on conservative estimates of declining storage costs. Historical data shows that the average annual decline rate of storage costs is 30.57%, which supports the long-term sustainability of the protocol.

Miners in the network earn rewards in various ways, including transaction fees, inflationary token issuance (where the issuance rate gradually decreases over time), and payments from storage funds.

The token economic model of the protocol includes an initial issuance of 55 million tokens, with an additional 11 million tokens issued as inflationary issuance. These issuances will continue to decrease until the total circulation reaches 66 million tokens. The protocol adopts a fixed supply strategy and does not implement a token burn mechanism.

Network Upgrade and Community Development

At the end of 2023, the storage platform experienced a community dispute. A certain infrastructure provider had indicated plans for a fork, which sparked strong opposition from the community. Multiple ecosystem participants expressed support for the original principles, and some partners suspended their collaboration with the provider. After communication, misunderstandings were clarified, and the community reunited.

In March 2024, the platform underwent a significant network upgrade. The new version introduced a coordinated mining mechanism that allows multiple nodes to work together, improving network efficiency and computing power. The upgrade also added support for mining pools, enabling miners to share resources. Additionally, the protocol adjusted the block generation difficulty to facilitate the generation of complete data copies and optimized the pricing mechanism. Despite initial controversies, these changes were ultimately recognized by the community, resulting in a significant enhancement in the platform's performance and stability.

Development of Innovative Computing Platforms

The storage platform 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 is expected to address the scalability and efficiency challenges in the field of zero-knowledge machine learning (zkML), providing a transparent and verifiable computing environment while leveraging the platform's powerful data storage capabilities.

The new system adopts parallel processing technology, enabling the simultaneous execution of multiple large-scale programs, similar to a computer's multitasking but on a larger scale. This approach optimizes resource allocation and enhances the system's scalability and performance.

The system is based on an open data protocol, featuring a flexible and modular design that facilitates upgrades and component replacements. Its Decentralization operating system allows developers to run command-line processes similar to smart contracts, combining the convenience of cloud server operations with the advantages of decentralized processing.

In this system, processes interact frequently with the storage layer as autonomous agents, facilitating efficient data exchange. Unlike traditional smart contract platforms, the contracts here can self-execute at predetermined times, paving the way for truly autonomous blockchain applications.

Market Competition and Technological Advances

In the field of decentralized storage, a certain file storage platform is the main competitor. The primary difference between the two is that this platform focuses on long-term data storage, while the competitor aims to disrupt the existing market through low-cost temporary storage. This platform is expanding into the permanent storage market, whereas the competitor needs to compete on price with traditional tech giants.

In terms of blockchain performance, this platform has recently achieved a processing capacity of over 600 transactions per second, making it one of the highest throughput permissionless blockchains. This achievement is particularly notable as the new computing system is still in its early stages, and the transaction processing speed has already surpassed several well-known blockchain platforms.

Team Background and Ecosystem Development

The project was founded in 2017 by two doctoral students, inspired by a chance walk and technological insights. The project successfully raised funds through multiple rounds of financing, including pre-seed, seed, community token sales, and private placements. Well-known investment institutions, such as the venture capital department of a large exchange and a renowned venture capital firm, participated in the investment.

The project adopts a DAO governance model to ensure community-led decision-making and voting mechanisms. As of the third quarter of 2023, there are already over 130 related projects in the ecosystem. The network has processed over 1 billion on-chain transactions, demonstrating its growing adoption and strong infrastructure.

Prospect Analysis

Bullish Factors:

• The launch of the new computing system has enhanced the platform's position in the AI field.
• The new system provides data access and storage capabilities for decentralized applications, expanding the possibilities for machine learning and AI integration.
• The ultra-parallel architecture is beneficial for the efficient training and deployment of AI models.
• Modular design provides an ideal environment for developing DeFi applications.
• The new system addresses the scalability and efficiency challenges of zkML.
• The volume of online transactions significantly increased in 2023, processing about 100 million transactions per month.
• It is expected that with the full operation of the new system in 2024, trading volume will further increase.

Bearish Factors:

• The testing phase of the new system may expose technical issues, including vulnerabilities and network access problems.
• The ability to effectively scale AI models on-chain has not been fully validated.
• Integrating new and old token systems may face challenges, increasing uncertainty.
• As storage and computing demands increase, scalability challenges may arise.
• The integration of the new system with the existing platform is still in the early stages, and unexpected technical and operational challenges may arise.
• Speculation about potential airdrops and changes in token policies may lead to fluctuations in token value.