Host: Blair Zhu, Mint Ventures
Special Guest: Qi Zhou, Founder of EthStorage
Youtube: WEB3 Founders Real Talk with EthStorage
Podcast: WEB3 Founders Real Talk with EthStorage
Blair: Hello everyone, welcome back to Web3 Founders Real Talk. We are here to bring you a very candid conversation with the movers and shakers of the industries. Today we’re thrilled to have a very special guest on the show, Zhou, the founder of EthStorage and the first-place winner of the EDCON 2023 Super Demo. Welcome to the show.
Qi Zhou: Hello, everybody. It’s my great pleasure to be here to introduce EthStorage.
Contents
Introduction of EthStorage
Blair: Welcome to the show and thank you so much for coming. Zhou, would you mind telling us a little bit about yourself and your project?
Qi Zhou: Yeah, sure. So, my name is Qi Zhou. I’m the founder of EthStorage and also Web3 Access Protocol. I joined the crypto space full-time in 2018. Before that, I was a software engineer at Facebook, Google, and EMC Dell, and also have a PhD from Georgia Tech. So, my previous work was primarily focused on infrastructure. So, when I entered the Web3 space, I found a huge space to improve the Web3 infrastructure. That’s why I have spent most of my time in Ethereum infrastructure, especially data availability, dank sharding, and also Layer2 technologies. So, EthStorage is perhaps the first storage roll-up for Ethereum, so we can satisfy the storage requirements, especially those high-value data on top of Ethereum. So, it’s built on top of Ethereum Data availability technology, especially EIP4844. That is the major upgrade of Ethereum in the next Cancun upgrade. I’m very happy to be here to share more about EthStorage and what we are building, and how we can enable new applications on top of Ethereum.
Blair: Thank you for sharing. Well, our first question would be, what kind of factors led your team to prioritize the development of EthStorage? Since you mentioned that you guys are aiming to build a storage roll-up on the Ethereum platform, we would like to know why you guys establish the project in the first place.
Qi Zhou: Yeah, that’s a really good question. So, the original motivation of EthStorage was about two years ago, at a time there was hype for NFT, like BAYC, Azuki, and Doodle Punks. At that time, our team did some investigation on all those projects. We were quite surprised that even those NFTs, each picture can take more than 10 ETH. That is right now more than USD 10,000. But the actual image itself is stored on a third party like Filecoin, Arweave, and all centralized servers, which means that those images can disappear at any time. So, this motivated us to say, hey, as the center of the web3 infrastructure, like Ethereum, we need some infrastructure to help to store those data more securely. And also, do not worry about disappearing any day. And so, the users can not only own those corresponding NFT, the ID like ERC721, but also corresponding images. All this raw data belongs to the user. So, that’s the beginning idea of EthStorage. And we have figured out how we can build the solution to solve this problem. And we also get out that Ethereum itself is moving towards some fundamental proof upgrades, then the data availability to solve this problem fundamentally. So, we are happy to participate in basically the roadmap of Ethereum. For example, we received two grants from Ethereum Foundation to support this work and also get first place at the EDCON Super Demo.
Challenges & Resistance
Blair: Yeah, that’s very impressive. You guys identified the pain points, that all those risks of centralized storage. Well, you mentioned that you have been dedicated to building infrastructure. So, the next question would be for builders. In such a dynamic industry, how did you navigate the volatility and the fluctuations within this environment as a builder? Did you face any sort of pushback or resistance while building your project? What kind of strategy did you employ to ensure stability and maintain progress while developing your project? I think that’s a constant struggle for everyone.
Qi Zhou: Yes, of course. Take an example, NFT two years ago was super hot. But, we’ve witnessed some events and also the crash of FTX exchange and Terra. So the hype of the whole Web3 is, like, NFT has become much cooler than one or two years ago. People are asking what can we build on top of Web3 and what’s the future. What are the new applications? One thing I feel is, we are doing things from a more strategic long-term perspective. So, we are thinking about what should we do or what the industry should do in the next 5 or 10 years. For example, we can imagine there is a world of computers, and sometimes I will say jokingly that previously or right now the capacity is more like a world of calculators, because the computational power is too low. But, once we saw all these infrastructure problems, both in terms of storage and also the computational power of TPS, then we can basically perform most of the current Web2 applications on Web3. And at the same time, bring the Web3 values to all Internet users, just like the Internet brings to the users at a time there’s no Internet, there’s no cell phone. But now, most people can easily enter Web3. They can enjoy all the benefits that the Internet offer. So, this is the greater vision in the long-term perspective. We firmly believe that should happen, and we also firmly believe that our technical skills can contribute part of this big picture. And then, that goes to the second point of how to identify our expertise because the referee is so dynamic, there are so many new technologies and new ideas coming up. And so, we have to figure out what the differentiator is beyond our technical expertise. Since I was an infrastructure engineer, I’ve been working in these places for more than 10 years with all these kinds of solutions, understanding this area. So, with all this accumulated knowledge in this specific area, we have confidence that we will be able to solve this problem in a couple of years. So, this is two, I would say, from a big direction perspective, how we convince ourselves first that we can stay in this industry, we can make it better, especially from our contributions.
Competitive Edge of EthStorage
Blair: Yeah, I can tell you guys are definitely a bunch of firm believers in the industry, and also you have a major alignment on the missions. So, that’s why you’re not gonna get all those distractions from the industry and all those trendy topics. And I do feel like sometimes as an entrepreneur, we need to be able to identify the trend, which trend will benefit your project. So yeah, it’s complicated and I’m happy to see that you guys are doing so well. Well, we mentioned a lot of names in the beginning, like they’re also working on this amazing decentralized storage sector. So, we would like to know, are there any specific advantages or unique differentiators of your project that set it apart from other storage solutions such as Filecoin, and Arweave? Can you give us a quick walkthrough?
Qi Zhou: Yes. First of all, we do not want to act like a competitor and say, “Hey, we want to kill any project like Filecoin or Arweave.” What we want to do is to find out how we can build more add-on values to the existing decentralized storage market. For Filecoin or Arweave, from their system design architecture, they are more designed for static, and sometimes we call it cold storage. So, a large amount of data can be uploaded to the decentralized storage, but they are less frequently to be modified or deleted because Arweave is not allowed to delete the data. EthStorage is doing a different market sector that we believe is becoming more and more important, which is the high-value hot storage data that can be frequently modified, deleted, and added. But users use smart contract logic. So that we can use smart contracts to program those large data, and at the same time, enable many new applications that Filecoin or Arweave are not good at. So, this is one major unique feature that EthStorage provides. The second is that EthStorage, as the name suggests, is highly integrated with Ethereum. Users can use their existing wallets, so they can interact with all the applications built on top of the storage, whether it’s NFTs, decentralized social networks, or decentralized games. We want to lower the barrier to entry for users to enjoy EthStorage as much as possible. They just need to pay for the storage fees, transaction fees, and wallet fees with Ethereum. From a developer’s perspective, they only need to be familiar with the Ethereum development stack, including smart contracts, solidity, truffle, waffle, and all these libraries and tools. They can build applications on EthStorage. These two major differentiators motivate us to build EthStorage and fill the big missing pieces of the decentralized industry, so we can build more good applications on top of this.
Lowering the Storage Barrier
Blair: It sounds like you’re trying to lower the barriers to entry for both individual users and developers. Can you elaborate on that? For example, the permissionless nature of the storage Layer2 network, how does it enable individuals with very small storage needs like us to become storage providers?
Qi Zhou: That’s a very good question. Right now, not only for storage providers but also for many Layer1 projects, people are asking a lot of questions about permissionless, especially Ethereum Beacon Chain stakers, you must own at least 32 Ethereum. As I know, to become a storage provider in Filecoin and Arweave usually requires a very powerful machine with very advanced GPUs and a lot of storage space. This is something we believe we should do and can do better. From the beginning, we designed EthStorage to be such that personal computers, like my laptop, or my desktop at home, can become a node as long as it has a minimum storage capacity, like four terabytes, it can become a storage provider and serve the corresponding data, receiving the fees that users pay to our storage smart contract. With that, we believe we can encourage more users or storage providers to offer better censorship resistance under most decentralized environments. Take the Library of Alexandria for instance. It was destroyed because it was a single point of failure. But now we have a more powerful, decentralized Library of Alexandria, which is why we are so excited about building this solution.
High Storage Capacity with Reduced Costs
Blair: On top of your point, I’m having another question. Because I do see the product offering and there’s one thing that is quite shocking to me. Because, with EthStorage, we’re able to achieve a high storage capacity goal while reducing storage costs to a remarkable one over 1000 times. Personally, I’m just curious, are there any trade-offs or limitations associated with this approach? Because sometimes there’s no win-win situation in the crypto world. So, how does it work?
Qi Zhou: This must work with fundamental technology improvement. And the most important improvement is building on top of the Ethereum data availability layer. As we know, data availability is a super hot topic these days. So, Ethereum is doing scaling, there’s a couple of other ideas, that’s for sure. And this perhaps is the next major protocol Layer1 feature that I will say all the Layer1 will gradually support. So, thanks to these technologies, we can significantly reduce the data upload cost. So, we need to upload data to the decentralized network in a public way, which means that no one can stop me from uploading the data, even centralized governments. So, that is a very important big breakthrough. Ethereum right now aims to increase this performance to 10 times or even 100 times, this brings significant value, significantly reducing the cost for users to store data, images, front-ends, articles, or tweets on the Ethereum network. First of all, this is not built by us, we got funding from the Ethereum Foundation to help them achieve this goal as quickly as possible. Everyone is eager to know how to use it. For example, we are releasing libraries to support EIP4844. This is the fundamental technology improvement that allows us to significantly reduce storage costs on Ethereum.
Interaction with EVM
Blair: I think this is exactly what we just talked about, we want to identify what kind of things might benefit the project, just the way we leverage this amazing technology. It doesn’t matter who brought it, it’s about how to digest this technology into the product. So this is amazing. In the first question, you mentioned that you did a lot of integration with Ethereum, because EthStorage is built on Ethereum and you want to be more compatible with the Ethereum stack. In addition, you also integrated with EVM. I think this is something we don’t see a lot in this sector. How does EthStorage interact seamlessly with EVM? Also, what impact does this integration have on the overall functionality and performance of your project?
Qi Zhou: Interacting with EVM requires a corresponding protocol upgrade, but that’s still Ethereum DA. For example, the first major feature that enabled this is called EIP4844. From a more technical perspective, it introduces new features to Ethereum, allowing EVM to access data hashes. While the corresponding data is not available in EVM, it is available on Ethereum. So it abstracts out the corresponding data so that the data hash can be provided to EVM. No one can forge a data hash. Everyone is processing transactions with hashes in smart contracts, and we know that the data of smart contracts is available somewhere on the network. Ethereum provides security. This is a major upgrade. Although I know many people may be confused by the technical details, this magnifies the data that can be uploaded to Ethereum. So we no longer tell everyone what the data is, because it’s slow to do so, like gossip, like I’m spreading all this information, like broadcasting. I just spread a very short digest, telling everyone that the data is available to everyone. Then I tell them, if you need this data, go find the validators who are in charge of this data. It’s kind of like now we have different departments, like the Department of Treasury, Department of Justice, and if you need this data, go to these departments, and they are guaranteed to offer the corresponding data to everyone. So now we kind of like building more hierarchy of dedicating this data to those people rather than broadcasting all this large amount of data to everybody. And, that is how we improve the corresponding efficiency as how our human organization is doing. When we have a small tribe, everybody can just discuss it with everybody. Now we have more, a town, a country, then we need to do more kinds of a thing to separate these different roles. And, that is precisely called data sharding. Sharding is like separating these roles from data to different stories or different validators. So, that is how Ethereum solved this problem. And this is how humans also solve these scalability problems.
Applications of EthStorage on L1 & L2
Blair: Well, that’s a lot of information to process. I have to admit, because I’m not a technical person, but I think that the fact I can get from your amazing explanation is we’re able to make more interactions with smart contracts directly now. So, it would lower the barrier, easier for users and developers. And also, you guys reduce the cost. Thank you for calling out all those three major features. And I think everyone and all those listeners today would have better ideas on your project. And then, let’s just talk about the future, the vision. Because we are all aware of there is a notable impact, such as collaborations had on Arweave and Solana during the previous bull cycle. Well, is there a roadmap for upcoming collaborations with other Layer1, with other chains, and with other ecosystems? Considering what we’ve witnessed before, we’re wondering if you’re going to do the same thing.
Qi Zhou: Yes, we are open to all Layer1 collaborations. It depends on the data availability technology on Layer1. Unfortunately, most Layer1 don’t have this feature, it’s either on their roadmap or still in the planning stage. This makes our collaboration a little bit difficult. But firstly, EthStorage is a modular storage layer, which means as long as you have EVM, and DA to reduce storage costs, you can run it on any blockchain, even on Layer2. Layer2 Optimism, and Arbitrum, run very well on Layer2, and then smaller Layer2s are emerging. EthStorage can also run on these Layer2s and further reduce storage costs. So these are some of our directions now, besides deploying on their Layer1 and upgrading with the corresponding EIP4844, which is what we are working hard to build, to enable more applications to run at a lower storage cost. For example, we are currently preparing for fraud proofs on Optimism. Many people complain about Optimism because they don’t have fraud-proof now. So we are considering how to implement fraud-proof on Optimism using our technology. We also enabled the corresponding DA layer on Optimism, and this fraud-proof is optimized, using the ZK technology we built with EthStorage. So there are many exciting things to solve at the infrastructure level. So we believe that, with the current scalability of Ethereum’s computing power, and the storage capacity provided by EthStorage, we can build many applications on the blockchain, or do anything impossible before, such as decentralized email with all data stored on Ethereum and EthStorage, decentralized Mirror, decentralized media, decentralized Twitter. Now there are many exciting things because, with these technology roadmaps, it’s possible. So, we are now more focused on Layer1, Layer2, and Ethereum architecture.
Perspective on Decentralized Storage
Blair: It’s really impressive, especially because Thread just launched, everyone is discussing how to make the whole social media decentralized, and people start to see the beauty of decentralized storage. I think it’s inevitable, we will see this trend sooner or later. My next question is, we all know that decentralized storage, this new technology offers many benefits and advantages, but it also has its challenges and limitations. What do you think are the main challenges and limitations that decentralized storage generally faces, not just for your project, but for the whole sector?
Qi Zhou: From a larger industry perspective, like Filecoin, Arweave, and all those well-known projects, a big challenge is that the user base is still very small, not to mention comparing Web2 with Ethereum. For example, on top of Filecoin, I know a lot of people complaining that there’s a lot of meaningless data that is persisted on Filecoin, because Filecoin still issues a lot of tokens inflated to reward those storage providers, no matter what they store, which means a lot of people just create garbage data, claim as stored data, and then collect the storage fee. But token inflation is not an organic way to grow the ecosystem. Because it just dilutes all the values of the existing token holders. While we need more organic external users to be able to, willing to use the token to pay the gas fee or storage fee and to consume it. So I think this is a very significant problem, not only for Filecoin and Arweave but also for a lot of other Layer1 projects, once they issue their token to maintain a network. I don’t want to list the names, but some of the famous projects, I think they are suffering from this problem. How do we able to make sure the token has sufficient organic utility value with a large number of users? So, that’s why we are doing it in different ways. A lot of people say, Hey, you have very wonderful technology and are very experts in DA, understanding storage, and smart contracts. Why don’t you build a single Layer1 to satisfy the order? EthStorage features a lot of other features that people are building, like ZK-snark. The answer is that creating such kinds of Layer2 with new tokens will be very hard to bootstrap in this stage, especially to attract the users to organically run a network. So, that’s the power of Ethereum Layer2. On top of Ethereum Layer2, like Optimism and Arbitrum, when they launch a network, they don’t need their token. They just need to demonstrate their value first. Once the value is well established, then the corresponding, no matter the governance token, or other kind of token is able now can create a value for them. And also be better to be able to receive ecosystem feedback while all those like DAO, take DAO or just choose to manage. So, I think this is a much better way to run the storage projects, especially since I believe this is perhaps the most challenging problem to all this, not besides storage, but also a Layer1 project.
Blair: Well, thank you for sharing all those challenges that we are facing right now. I’m 100% siding with this. Well, I can share my view here. I think it all boils down to the market demand. Because now people can see the nascency of the industry and the token issuance, it’s like the industry still consists of full of speculations. I think probably that’s the underlying reason. Well, let’s just talk about some positive things. What kind of factors are fueling the demand for decentralized storage? And what kind of things would be the potential drivers or catalysts that can boost the future growth of decentralized? Considering DeFi, the major catalyst was yield farming and Uniswap V2. And also we are aware of how many restrictions or limitations we could have in traditional finance. That’s why we had DeFi summer and it was crazy. We all witnessed that. What do you think of that? What’s your take on the potential drivers for decentralized storage? Also, is there any other trend on your radar that you would like to share with everyone?
Qi Zhou: Yes. I think from a lot of applications that we have observed these days, people are more and more aware of data ownership. NFT is a very good example. People would say, hey, this is on our own that I can secure and should be always secure, just like some paintings painted by Picasso or famous buildings. All these things, in terms of digital arts are should be able to owned permissionless by a decentralized protocol. And this is a growing demand. Besides that, there’s also a demand to make sure that we have a neutral internet or neutrality. These are words that debate a lot when I was at Google, talking about how we can enable much better neutrality of the internet as a public good rather than seeing applications manipulated by elites. So I think blockchain and smart contract and also the decentralized storage solution together is a better platform to offer better internet with better neutrality. And actually, decentralization is also designed for neutrality, in which everybody can participate in the network, no matter whether it is a regular person or a rich guy, or maybe a high-level governance official. So, this is something that we are amazed by in the future of Web3 or the future of the internet. So, taking a recently hot debate, for example, Twitter and Threads. A lot of people complain Twitter has all these kinds of restrictions. For example, when I sometimes post some technical articles and I don’t know why I have just been blocked by Twitter, saying I cannot post this article. And I think, once it’s been blocked and there’s no way to work hard to unblock it because it is controlled by a highly centralized monopolized company. While with the internet we have better organization, we have DAO. We have a better way to communicate with the community. Also, we have a better way to censor. I’m not only talking about censoring but also all those spam issues. So with them, we can use tokens and all kinds of things, and we are building a better way to organize the whole internet. So, democratize the internet resources, rather than hosted by those centralized companies like servers, and also their websites. Now we can fully build all the spins in a much much better collaborative way on top of Web3. And that does something that we believe will create a lot of demands. Also, based in terms of the more powerful computational power of the current blockchain, and at the same time, also for storage. So, we believe that if more and more such kinds of demand are growing, people will find a better way to solve this problem on top of Web3.
Blair: Yeah, as you said, I think people start realizing the whole fact of manipulating, with all those big data technologies and the way they collect your information. They do implement a lot of policies on the post and everything. So, I would say people starting to get the beauty of decentralized storage, and it’s going to be inevitable. Sooner or later we’re going to see a mainstream adoption. Thank you so much for sharing your expert insights, especially your project. Looking forward to seeing more innovations on EthStorage. Thank you so much for your time, Zhou.
Qi Zhou: Many thanks for the invitation and I’m super happy to share EthStorage on the show, and also feel free to reach me on my Twitter, email, or Discord to share your thoughts on EthStorage and then we can build it better.
Blair: Will do, for sure. Thank you so much.
Qi Zhou: Thank you.
