Shadow Explained: Decentralized Storage Bound to Solana to Quickly Gain a Foothold

Recently, Filecoin has been gaining momentum. Previously, BitMEX founder, Arthur Hayes, also shouted for Filecoin in a speech at Token2049 in Singapore, saying that he holds FIL.

In the Solana ecosystem, there is an important and low-key storage project that is not known to many people, and that is GenesysGo —- a blockchain infrastructure provider on the Solana network, focusing on decentralized cloud storage services.

At the same time, while everyone’s attention on the Solana ecosystem was previously focused on Meme and liquidity staking, GenesysGo’s token Shadow Token (SHDW) has also quietly doubled in value in the past month.

The storage track is already very crowded, and mature projects include IPFS and Arweave. How is GenesysGo different compared to them? And can we usher in more development potential through Solana’s ecological recovery?

To understand these issues, we first need to understand the three core businesses of GenesysGo:

1. Shadow Operators, RPC layer (decentralized RPC node)
2. Shadow Drive, decentralized data storage layer
3. Shadow Cloud, a decentralized cloud computing platform

Later, we will also analyze the similarities and differences between its token economy and other projects.

Shadow Drive

Shadow Drive is a decentralized data storage layer and the core of GenesysGo, designed to meet Solana’s growing storage needs for the ecosystem.

Previously, for storage activities such as NFT on Solana, third-party storage solutions such as Arweave and Filecoin were often used. However, they are both independent storage public chains and are incompatible with Solana. Storage activities are paid with their respective tokens. Instead of SPL standard tokens, sometimes they cannot keep up with the speed of Solana. Therefore,Solana’s ecologically native storage system has become a necessity.

Shadow Drive is an adapted version of open source software called Ceph that defines stored procedures. Ceph provides a unified software-defined solution for block storage, file storage, and object storage, and its effectiveness has been widely verified.

The GenesysGo team integrated Ceph’s open source solution with Solana’s PoH (proof of history) mechanism to create Shadow Drive.

Shadow Drive is supported by the native token $SHDW, and in order to upload data to Shadow Drive, users need to pay a small $SHDW fee.

According to the official documentation of the project, the storage cost of Shadow Drive is cheaper than any similar project on the market, with a theoretical price of 5 cents/GiB/year. (Note: 1GB (Gigabyte) and 1GiB (Gibibyte) are for computer data, a storage term that indicates the size of data but uses different measurement units. (1GiB ≈ 1.07GB, which can be approximately understood as equal).

In our testing, a request to create a 1GB storage account cost just 0.25 $SHDW, which at the time of writing is equivalent to approximately 0.42 Dollar.

The low cost is due to the low gas cost of Solana itself on the one hand, and the reasonable decomposition, scheduling and arrangement of storage tasks at the bottom of Shadow Drive.

This also extends to another topic, the project’s data distribution mechanism —— D.A.G.G.E.R.

D.A.G.G.E.R. is the abbreviation of directed acyclic gossip graph enabling replication. Since the explanation of this mechanism is too technical, we can simplify it here and understand it as the project’s data distribution mechanism and consensus engine, which are used to optimize fast data access and file processing, making storage more efficient.

The working mechanism of D.A.G.G.E.R includes several core components: communication module, processor module, consensus module and controller module.

For a transaction, the following processing flow will be simply followed in D.A.G.G.E.R. I won’t go into too much detail here:

1. Communication module: handles the input and output of the network layer (incoming and outgoing transactions)
2. Processor module: Verify transactions to confirm their correctness and validity
3. Consensus module: Each node in the network reaches agreement on the transaction
4. Processor module: transaction is executed

Overall, what we can feel is that Shadow has made a lot of optimization efforts on “how to store data”.

Shadow Operators

Shadow Operators are operators that run RPC nodes.

RPC node, or remote procedure call, is a term used in distributed computing systems. RPC can be classified as an API (Application Programming Interface) that allows computer programs to communicate with each other.

Simplified flowchart for sending transactions on Solana

Compared with other public chains, Solana has very high transaction processing capabilities, so the workload of the RPC network on the Solana blockchain is much higher than that of other networks. Therefore, existing RPC network providers built on other blockchains will need to completely redesign their architecture if they plan to migrate to Solana.

This also gives GenesysGo the opportunity to provide Solana’s native RPC service.

GenesysGo offers three RPC services, including one free service and two paid subscription services. In paid RPC services, fee revenue is paid entirely to Shadow Operators. In addition, Shadow Operators also need to stake $SHDW tokens to provide services and face penalties in the event of service interruptions.

As of the time of writing, there are already 120 RPC operators running on the test network, which is about a 5-fold increase compared to the 27 operators a year ago (data in December 2022).

Shadow Cloud

Shadow Cloud is a decentralized cloud computing platform launched by GenesysGo and is also technically supported by Directed Acyclic Graph (DAGGER).

With the above nodes and storage services, GenesysGO can use its capabilities to provide a decentralized cloud computing platform to support the computing and processing needs of different applications.

This platform is designed to support decentralized storage, computing and network operations, providing a broader infrastructure for Web3 and decentralized applications.

However, judging from the current progress, GenesysGo’s storage and RPC products appear to be more intuitive, with complete technical documents and product designs, while cloud services are more like a later development strategy, which is the result accumulated after the first two products have developed to a certain extent.

Comparison of competing products: the only secret is being fast

Overall, there are many mature cases in the Web2 and Web3 fields regarding decentralized or distributed storage. For example, in the Web2 field, there are distributed storage systems headed by Google BigTable. In the Web3 world, Arweave and Filecoin are the most commonly used third-party storage solutions in blockchain.

So what are the notable features of Shadow Drive compared to competing products? We might as well take Filecoin as an example for comparison.

First of all, as mentioned above, Arweave and Filecoin are not fully compatible with Solana. If you only consider serving the Solana ecosystem, you will definitely need a dedicated storage infrastructure:

• Arweave and Filecoin’s tokens $AR and $Fil are not SPL native tokens (SPL is Solana’s token standard).
• Neither Arweave nor Filecoin’s throughput can keep up with Solana, which can easily lead to transaction failures.

Secondly, Shadow Drive’s consensus mechanism brings better storage efficiency:

Filecoin uses the Expected Consensus (EC) mechanism and DAG to achieve consensus, which requires explicit recognition and block weight for final confirmation, which may compromise efficiency.

D.A.G.G.E.R. uses a leaderless asynchronous architecture to achieve consensus through a graphical representation of the DAG, eliminating the need for leader elections and allowing transactions to be processed immediately.

Finally, Shadow Drive’s Data encoding has been optimized:

D.A.G.G.E.R. integrates erasure coding into the architecture to optimize metadata replication and data transactions. Filecoin allows erasure coding as an optional client-side strategy, focusing on data replication and periodic proof of storage.

We will make an intuitive list and comparison of the key performance indicators of the two:

Filecoin performance indicators:

• Transaction speed: approximately 30 seconds per block.
• Confirmation time: ~1 hour for high value transfers of 120 blocks.
• Data Storage: 1 MiB file takes 5-10 minutes from transaction acceptance to appearing on the chain.
• Sector Sealing: On minimum hardware, 32 GB sectors take approximately 1.5 hours.
• Data retrieval: Fast retrieval methods (unsealed copies of data) can be assumed to take less than 2 minutes; on minimal hardware, for 32 GiB sectors, unsealed retrieval can take approximately 3 hours.

ShadowDrive/DAGGER performance indicators:

• Peak TPS: 50,000 transactions per second on specified machine configuration (ideal network).
• Surge TPS: ~20,000 - 38,000 transactions per second under live testnet phase 1 conditions (versions 0.2 - 0.3, independent operator with 20-30 node cluster size).
• Real-world TPS: ~3,000 transactions per second under real-world stress, churn, etc.
• Data Storage: A 1MiB file uploaded to the DAGGER Hammer Demo takes 2-8 seconds, which emulates shdwDrive v2 to store parts of the application.
• Erasure coding time: 0.018 ms per 1 MiB per core, negligible when scaling horizontally.
• Snapshot download: 10ms to 50ms for 1 MiB file.
• Block synchronization time: between 30ms and 300ms, depending on latency.
• Block verification time: Below 500 nanoseconds to 20 milliseconds, indicating minimal latency.
• Finalization time: 70 ms to 650 ms, with an average of ~273 ms (on the live test network phase 1 where 30-node global cluster powers the DAGGER Hammer demo site)
• Data Retrieval: Retrieving a 1MiB file via URL on the DAGGER Hammer demo site takes 1-3 seconds

To sum up, if you don’t read the version for too long, the biggest feature of Shadow Drive is its speed.

The above data performance comparison comes from the official project documents D.A.G.G.E.R. Versus Filecoin, where interested readers can take a closer look.

Tokenomics

Token introduction

$SHDW is the utility token of the Shadow Protocol ecosystem, mainly used for distributed data storage, allowing users to safely store data on multiple nodes to enhance security and resiliency. It mainly has the following main functions:

• Distributed Data Storage: Allows users to use $SHDW to securely store data across multiple nodes for increased security and resiliency.
• Access decentralized computing power: Staking $SHDW tokens through the Shdw operator enables running complex applications and smart contracts.
• Network Coordination: In the D.A.G.G.E.R.-powered Shado ecosystem, $SHDW is used to manage data in a distributed network.

Token distribution

Unlike most projects, GenesysGo provides support for Shadow Protocol by developing an interesting listing strategy - issuing NFT to obtain tokens. The team announced that it will launch its own NFT series SSC (Shadowy Super Coder) in November 2021, with a circulation of 10,000 and a minting price of 2.5 SOL.

Considering that when SSC was first issued, SOL was very close to its all-time high and the market was in a bull market at that time, and because 50% of the token issuance of $SHDW will be allocated to NFT holders, SSC was quickly sold out .

Additionally, GenesysGo raised funds through an IDO on January 3, 2022. The IDO pool contains 15% of the supply, or 30 million tokens. IDO will initially have a floor price of $0.50 per token, with the price of each token increasing based on contributions to the IDO pool. In total, the team has raised approximately $52 million, which puts the IDO price per token at $1.73.

The maximum supply of $SHDW is 200 million. The following is the detailed distribution of tokens:

• NFT holders account for 50% and are released daily for 12 months
• Additional release ratio takes up 15%: If they are staked continuously for 12 months, each NFT is eligible to receive an additional 3,000 $SHDW.
• Shadow Operator - 10%: Inflation reward will serve as an incentive for Shadow Operator in the startup phase
• IDO accounts for 15%: released immediately after IDO
• Strategic reserves account for 10%: used as team development reserve funds

Token performance

As of the time of writing, the current price of $SHDW is $1.71, and the market value is approximately $258.6M. The currency price performance in the past 7 days/30 days/1 year is as follows:

• 7 days: up 51.36%
• 30 days: up 93.8%
• 1 year: up 2615.62%

It can be seen that as the market rises, the price of $SHDW is also very eye-catching. In the past year, $SHDW has performed extremely well, rising nearly 26 times from the bottom.

At present, the risk factors of $SHDW are similar to those of many Solana project parties—-its previous market maker was Alameda, and Alameda still remains related token positions.

Latest project development

As 2023 is coming to an end, the project has made further progress. On December 29, GenesysGo officially tweeted that it would launch the D.A.G.G.E.R. Testnet 2 and also revealed relevant rewards.

Starting on January 16, 2024, the project will provide a total of 600,000 $SHDW in rewards, divided into three categories: shdwOperators, shdwStaking and shdwPoints, corresponding to node operators and users respectively.

What makes investors even more interesting and excited is that their latest tweet on January 2 mentioned that the core tasks of their team in 2024 are two things: In the first half of the year, they will complete D.A.G.G.E.R. and deploy shdwDrive v2 to the main server. network, and in the second half of the year, the core task is“Marketing, marketing, marketing!”

If the bull market continues, riding on Solana’s craze, this brand-name marketing determination may inspire another round of good market performance.

Conclusion

Shadow is one of the earlier projects launched on Solana. This products launched by GenesysGo have undoubtedly contributed to the development of the Solana ecosystem.

Recently, Shadow’s performance has also been very dazzling. The current stored data has reached 89TB, and 120 node operators are running. This is a big leap compared with last year’s data.

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While the storage racetrack is crowded, Shadow has found a key foothold in the competition — heterogeneous storage serving Solana.

With the increasing prosperity of the Solana ecosystem and the status of L1 that cannot be ignored, Shadow is naturally worthy of attention as its natively adapted storage infrastructure.

Similar to the parallel EVM Neon on Solana, as the only EVM in the Solana ecosystem, unique infrastructure projects often achieve good market performance.

As Solana prospers, Shadow prospers. Storage bound to the public chain naturally occupies a unique advantage in the tailwind situation; however, both losses are also potential risks faced by the project.

But starting from Solana to lay the foundation and then gradually expanding the business to other areas of Web3 may be another good choice for the future development of the project.

In any case, in the context of Web3 infrastructure projects with high valuations, stories, and resources, the subsequent performance of a storage serving hotspot L1 may be worth looking forward to.

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