Key Points Summary

· Mysten Labs has successfully launched the Sui network and DeepBook protocol, and is now preparing to launch a new project - the Walrus protocol.

· Despite the many existing decentralized storage protocols, Walrus has attracted widespread attention for the following two points:

(1) Cost-effectiveness and Security: Walrus is more cost-effective and secure than existing storage solutions.

(2) Programmability: It enables data stored to be programmed through the Sui network.

· As one of the most advanced decentralized storage protocols, Walrus is worth paying close attention to in terms of its future utility and value.

1. Background - Why Walrus? Why Launch Now?

Mysten Labs, having successfully launched the Sui network and DeepBook protocol, is now venturing into a new field - the Walrus protocol. The success of the Sui network and DeepBook has accumulated significant anticipation for the Walrus project. However, despite the enthusiasm, there are some doubts surrounding the Walrus protocol.

These doubts stem from several factors: there are already many decentralized storage solutions in the market, many of which have not achieved ideal performance; and there are concerns about resource allocation - particularly whether Mysten Labs will be distracted from developing and expanding the Sui network, which could impact the progress of new projects.

Therefore, we will explore the structure of the Walrus protocol, analyze its differences from existing decentralized storage solutions, and further investigate the relationship between Walrus and the Sui network, focusing on how Walrus integrates with the Sui architecture and enhances the value of the entire Sui ecosystem.

1.1 Differences Between Walrus and Existing Storage Solutions

To explain why Walrus needs to exist, we first need to discuss its differences from existing decentralized distributed storage solutions. From my perspective, there are three main differences between Walrus and existing storage models (particularly Filecoin and Arweave), which can be summarized as follows:

1.1.1 Storage Cost Efficiency

First, there are significant differences in storage costs between Walrus, Arweave, and Filecoin. As discussed in the Four Pillars article about Walrus, Arweave uses a system where all nodes must replicate and store all data, while Filecoin allows users to decide how many nodes store their data (users can choose to use only one miner to store data, or distribute 100 copies of data across 100 miners. Obviously, the more miners required to store data, the higher the cost).

In contrast, Walrus uses Red-Stuff encoding, demonstrating lower costs compared to Arweave and Filecoin, with efficiency up to 100 times higher (compared to Arweave, which requires network-wide data storage, leading to up to 500 times replication costs, while Walrus only needs 4-5 times replication). At the same time, the probability of data loss is significantly reduced.

Simply put, Walrus solves the drawbacks of Arweave and Filecoin. Arweave has a low probability of data loss but high replication costs; Filecoin offers relatively cheap storage based on user needs, but low-cost options may bring higher data loss risks; Walrus, by maintaining low replication costs while minimizing the probability of data loss, combines the advantages of both.

Additionally, for Arweave, costs increase as the number of nodes increases (though not linearly), as it encourages all nodes/designated nodes to store as much complete data as possible. In contrast, Walrus only requires one network data transmission, with each node storing partial data, which actually reduces the burden on each node as the network grows. This structural difference makes Walrus's storage costs significantly more efficient than Arweave and Filecoin.

1.1.2 Programmability

Although Walrus's efficiency compared to Arweave and Filecoin is crucial, its most significant difference from existing storage models is "programmability". Traditional storage is simply a data warehouse, while Walrus achieves programmable decentralized storage through the Sui network, giving stored data more functionality.

What if smart contracts could directly reference or trigger data stored in decentralized storage? For example, when minting an NFT, the image file could be stored in Walrus, and its blob data object could be created on the Sui network, connecting it to the NFT object. This solves the traditional NFT "incompleteness" problem (traditional NFTs store tokens on-chain, but NFT artistic metadata is stored off-chain), making NFTs through Walrus truly Web3 assets.

Another example directly related to data storage is that because Walrus's blob data can be stored as Sui objects and controlled by Sui's Move smart contracts, smart contracts can transfer stored data to other users or automatically change ownership. This is why we say data in Walrus is programmable.

In comparison, Arweave and Filecoin have very limited, almost impossible dynamic integration with on-chain applications. Although Filecoin has added some smart contract functionality through FVM (Filecoin Virtual Machine), the ability to modify and control data remains limited, with Walrus clearly superior in programmability.

1.1.3 Data Access and Deletion

Existing storage protocols have a characteristic: once data is uploaded, it can be accessed by anyone and cannot be deleted. While this may be useful for individual users, it brings enormous limitations for institutions and enterprises that need to store sensitive data or need to modify/delete data. In contrast, Walrus allows users to discard or modify their data when needed (unlike Arweave, where data cannot be deleted or modified; and unlike Filecoin, where data deletion is not user-initiated but occurs when the contract expires or the node hosting the data goes offline).

Some may worry that this conflicts with the blockchain's immutability principle, but it's important to remember that in Walrus, what is deleted is blob data. Transaction data unrelated to blob data deletion remains unchanged, and deleting blob data does not affect the blockchain's integrity.

Compared to traditional storage, this enhanced utility of Walrus greatly increases its application potential in traditional and Web2 enterprises, further increasing market expectations for its versatility.

1.2 Collaboration Between Walrus and the Sui Network

After discussing Walrus's differences from existing storage protocols, let's explore the relationship between Walrus and the Sui network. When Mysten Labs announced the preparation to launch the Walrus protocol, many questioned whether "they should focus on Sui instead of creating a new protocol". However, a brief understanding of Walrus's operation reveals that Walrus is not a distraction from Sui, but should be viewed as a storage stack aimed at perfecting applications on Sui. In other words, Walrus not only complements the Sui network from a storage perspective but also actively influences Sui's governance token SUI, making the two inseparable. We will further explore this point.

1.2.1 Symbiotic Relationship Between Sui and Walrus

In fact, Mysten Labs has been very focused on storage issues during Sui's early design phase. Blockchains inevitably grow during use, which could lead to increased transaction fees for Sui network users in the future. Therefore, from Sui's early design stage, Mysten Labs proposed a unique storage fund concept to address Sui's storage challenges.

The Sui storage fund works as follows: fees submitted to Sui validators are divided into two parts: 1) gas fees related to computation, 2) storage fees for data storage. Sui collects storage fees in advance when users upload data and deposits these funds into the storage fund. The storage fund continuously allocates these funds to validators as long as the data remains on-chain. Additionally, if users delete data, they can receive a refund of the storage fees.

Sui's unique on-chain data storage system produces two effects:

1. Users receive a refund of storage fees when deleting on-chain data, creating an economic incentive to reduce distributed ledger capacity.

2. The system solves storage-related sustainability issues by collecting storage fees in advance and using them as future validator rewards.

Although Sui solves sustainability issues through this unique structure, storing large-scale blob data (such as media files) on-chain remains a burden. This is where Walrus comes into play - by storing large-scale blob data through Walrus and managing its metadata as objects on Sui, data can achieve programmability without being directly stored on Sui.

Moreover, Walrus has achieved the most distinctive feature compared to other storage protocols through Sui - making stored data programmable and controllable. Ultimately, a symbiotic relationship has been established between Sui and Walrus, where they complement each other's shortcomings and create unique advantages.

1.2.2 Walrus Makes SUI a Deflationary Asset

From the example of the storage fund, we can see that the Sui network requires payment of a certain amount of SUI as a storage fee for storing any object, and Walrus is no exception. When creating a blob data object in Walrus, SUI will be locked in the storage fund based on the object's size (referring to the object size representing the blob, not the actual blob size).

Although part of the fees can be refunded by deleting data, a portion of the fees will create a destruction effect by permanently removing tokens to reduce circulation. In other words, the more data stored through Walrus, the more SUI will be permanently locked in the storage fund, forming a virtuous cycle where increased Walrus usage leads to decreased SUI circulation.

In summary, the emergence of Walrus is a positive message for the Sui network, both from a network and asset perspective. It is expected that through Walrus, the Sui ecosystem will develop in a more diverse direction.

2. Conclusion - Walrus Will Become Sui's Most Critical Protocol

2.1 Mysten Labs Is Not Just Building a Blockchain

When Mysten Labs was first established, I thought it was just a company focused on the Sui network. However, after seeing the launch of services like Deepbook and SuiNS, I began to wonder what vision Mysten Labs was pursuing. When I encountered Walrus, I realized their goal is to build a complete Web3 decentralized infrastructure.

Compared to other companies, Mysten Labs has a different time horizon when looking at the industry. They are not just issuing tokens, creating hype, and quickly monetizing; instead, they have a vision of leading innovation in execution, storage, consensus, and communication, while understanding users' inertia towards Web2 services and creating the most suitable UI for them.

The Sui network handles execution and consensus (continuously evolving through plans like Mysticeti, Pilotfish, and Remora), storage is handled by Walrus, communication by SCION (a next-generation internet architecture that protects network packets and is known for DDoS protection and immune routing attacks - it's worth noting that SCION was not created by Mysten Labs, but will be applied to the Sui network), and Web2-familiar UI is managed by zkLogin, Stashed, SEAL, and KELP.

If these plans can successfully land, I believe Mysten Labs can rewrite the existing Web3 paradigm. My initial idea was limited; Mysten Labs is not just trying to build a blockchain - they are a team building infrastructure for a new network. Of course, I believe Sui is at the core of Mysten Labs' vision, with other plans playing complementary roles. Walrus is the same, and in my view, Walrus might be the most important protocol.

2.2 Walrus Is Not Limited to the Sui Ecosystem

However, Walrus is not limited to the Sui ecosystem. Like other storage protocols, Walrus can be used by any third party, not just Sui applications. It could even serve as a powerful alternative to existing storage protocols or as an alternative to other DA layers (such as Celestia, EigenDA, Avail).

This usability of Walrus extends SUI's demand beyond the Sui network. When Walrus is used, data objects are created on the Sui network, thereby reducing SUI circulation. In other words, Walrus has the potential to make SUI a more attractive asset by creating external demand (this is not investment advice, but a structurally possible scenario). Therefore, Walrus is expected to become a bridge, expanding Sui in various directions.

2.3 Can Walrus Surpass Filecoin?

Although caution is needed when comparing the value of specific protocols, I am very optimistic about Walrus's future because: 1) its operating mechanism is far more efficient than existing storage protocols, 2) it can perform tasks that existing storage protocols cannot (such as serving as a DA or making stored data programmable), 3) it already has a solid network and user base through the Sui network.

If Walrus is not just the storage layer of the Sui network, but becomes the representative storage protocol of Web3 as Mysten Labs envisions, it has the potential to become the leading protocol in the storage field.

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