Can Arweave Re-Invent Data Storage for the Blockchain? Can Arweave Re-Invent Data Storage for the Blockchain?

Can Arweave Re-Invent Data Storage for the Blockchain?

If Arweave’s concept of permanent storage can be an effective competitive strategy to win over the market?

Can Arweave Re-Invent Data Storage for the Blockchain?

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

In a previous article,  ‘Will Decentralized Storage Protocols Overtake the Cloud Storage Market?’ we compared four major decentralized storage protocols. 

In this article, we see if Arweave’s concept of permanent storage can be an effective competitive strategy to win over the market.

Arweave’s permaweb is not private, and all data is permanently public and directly accessible. Therefore, it is not suitable for storing personal or sensitive data. Its upfront storage costs, which start at 40+ years, are significantly more expensive than existing solutions. 

For example, to be able to store files on Arweave, developers create a transaction to pay a certain number of AR tokens as a network fee (currently $0.01/MB) to store data forever. At the same time, the low-end package of Amazon S3 charges $0.000023/MB per month. It will take 40 years for each Arweave user to break even. That means Arweave users are paying a premium for permanent storage.

So, who exactly would use this solution? Arweave is suitable for organizations and companies who need their data to be:

  • Publicly available
  • Stored for 40+ years
  • Censorship resistant 

Potential Application Scenarios For Arweave

Storage layer for on-chain data

The biggest problem with most public chains is that they cannot store large amounts of hypermedia data on their chains. Blockchain is a ledger for bookkeeping, not data storage. As a storage layer for on-chain data, Arweave has a vast market.

Storage layer for NFTs 

NFTs, which have an obvious demand for long-term, immutable, and publicly available storage, will likely be one of the major market segments for projects like Arweave.

Storage for public, but sensitive, content

In traditional centralized storage, the company or central authority can easily remove content. Activists like WikiLeaks, for example, or larger organizations similar to Wikipedia would be prime candidates for decentralized storage. 

Arweave’s Ecosystem Expansion Path

Looking back at Arwearve’s technology development and market expansion trajectory since 2021, it is clear that the Arweave team has a clear and unique vision of its application scenarios and market strategy. 

Cooperation with Web 3.0 Infrastructure

Arweave has partnered with Cosmos, Polkadot, Avalanche, NEAR, and Solana. The Graph, a blockchain indexing protocol, supports Arweave as well, allowing users to access archived blockchain data more efficiently.

Collaboration with DeFi Projects

More and more projects use Arweave to store data related to the crypto industry. There are some significant use cases in the DeFi space: Uniswap and Compound have already hosted their entire front-end applications on Arweave.

Expansion of Arweave Ecosystem

  • NFTs: Arweave has an NFT standard, known as Atomic NFT, that makes it possible to keep both the asset file, metadata file on-chain and permanent, whereas other solutions just provide a one-off NFT and the metadata file is stored off-chain. 
  • DApps: Arweave has its own ERC-20 token format called Profit Sharing Token (PST). When deploying a smart contract, developers can set up a corresponding PST pass and agree that the holder of the PST will receive a proportional share of the future gas fees generated by the contract. Thus, the more a smart contract deployed on Arweave is used, the higher the intrinsic value of its PST tokens. This incentivizes developers. 

In Summary

Arweave, the Web 3.0 storage infrastructure, is a decentralized cloud storage solution that solves the problem of storing data in perpetuity over time. Its network and application architecture supports development and data storage as a whole, making data integrity from time and space possible.

Many smart contracts, especially GameFi, pay much attention to user front-end behavior data and urgently need to connect the data on and off the chain.. 

With the growing richness of the ecosystem, Arweave has the potential to build a solid foundation to solve the above problems and have an excellent chance to become a top chain.

Date & Author: February 15th, 2022, [email protected]

Data Source: Arweave Dashboard

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