CGV Research: An Insight Into Top 3 Projects in the web3 Index Chart: Pocket Network, Arweave, and Livepeer

—  By Vargason, CryptogramVenture FoF Analysis Fellow

Earlier than the rise of blockchain, Web3.Zero can solely keep within the idea stage because of the lack of options. With the event of blockchain know-how, a variety of Web3.Zero associated initiatives have emerged.

In accordance with the Web3 Index compiled by web3index.org (a web site that tracks protocol utilization throughout your complete Web3 stack), previously 30 days, the income and different complete indexes of Pocket Community, Arweave, and Livepeer ranked among the many high relative to different initiatives. Pocket Community is at present the Number one middleware, with its 30-day income greater than 30 occasions that of Arweave. In November, the charges paid by builders elevated by 208%.

Within the Web1.Zero period, the transmission of data was one-way, with out interplay on the person’s facet. Web2.Zero gave customers the suitable to edit, use, and work together with info. Nevertheless, privateness safety remained a problem, and the worth of person participation wasn’t explored. Web3.Zero broke giant middleman platforms’ monopoly that had resulted from Web2.0, reworking the platform-centered worth distribution mode into one that permits every participant who creates worth for the platform to have a share of the revenue.

Web3.Zero can’t be constructed within the air.  Earlier than Web3.Zero purposes could be adopted on a big scale, the blockchain infrastructure should be improved. On this article, CryptogramVenture FoF (hereafter CGV FoF) focuses on three blockchain initiatives, particularly, Pocket Community, Arweave, and Livepeer, and introduces the necessary infrastructural parts of Web3.Zero from three elements: API, storage, and streaming media.

Be aware: This text is a CGV FoF analysis paper and is for reference solely. It doesn’t represent any funding proposal.

Pocket Community

  1. Fundamental Introduction

Pocket is a distributed API infrastructural undertaking constructed for Web3 purposes. It supplies a trustless API protocol that’s obtainable for all main blockchain networks.

Pocket undertaking goals to construct a whole distributed community of blockchain nodes. By means of the trustless API protocol, builders can seamlessly entry hundreds of nodes, constructing a DAO ecosystem together with cryptoeconomic incentives.

  1. Ache Factors Solved

On November 11, 2020, Ethereum suffered an outage that lasted practically 4 and a half hours. Infura, the API service supplier of Ethereum and IPFS, stated that its Ethereum Mainnet API service was briefly interrupted, which resulted on this outage incidents. That is additionally one of many many Single Factors of Failure (SPFs) perplexing centralized service suppliers.

CGV FoF has learnt that this incident didn’t have an effect on customers who added Pocket RPC’s Ethereum nodes to their wallets. They might nonetheless commerce and work together by way of DApps or sensible contracts. This was doable primarily resulting from the truth that the Pocket Community node operator has a wide range of Ethereum shoppers, which makes the community service extra versatile.

Michael O’Rourke, CEO and co-founder of Pocket Community, believes that centralized infrastructure suppliers will need to have numerous obtainable buffers to fulfill extra wants. As a result of decentralized design of Pocket Community, it solely wants to begin and run a small a part of the backup buffer, thus lowering the service price. In accordance with the corporate’s estimates, the Pocket Community providers are “a minimum of 10 occasions cheaper” than centralized providers.

  1. Token-based Financial Mannequin

Pocket Community has designed a novel financial mannequin based mostly on its token POKT. The mannequin, which relies on DAO, creates a decentralized and trustless bilateral market between nodes and builders in its ecology, which permits all members to profit from it. Within the Pocket ecology, builders and nodes are the inflexible demanders of POKT.

Developer: Makes use of POKT tokens to implement API requests, thus acquiring extra environment friendly however cheaper distributed API request providers.

Node: Possesses a certain quantity of POKT tokens to supply node providers, and is awarded with POKT tokens for offering API providers and implementing builders’ API requests.

As a result of every celebration of the market has its personal distinctive incentive mechanism, the bidding costs of either side additionally range. The whole provide shall be restricted by the burning mechanism established by DAO that controls the token coverage. The last word complete provide of POKT shall be decided by DAO.

How does POKT develop into a less expensive resolution? The reply is to stake POKT as an alternative of paying AWS payments. Because the variety of relays and nodes will increase, information will develop into cheaper. It’s anticipated that the value of every relay will finally stabilize at a sure order of magnitude within the subsequent few years.

Though the community continues to be in its infancy, the variety of nodes retains growing at a major price.

This new type of fee by staking could develop into a supply of potential friction within the strategy of adoption. Nevertheless, as soon as POKT succeeds, we could have discovered an efficient technique to join varied Web3 middleware infrastructures with tokens.

  1. Companions

Algorand has introduced its initiative to boost interoperability by integrating the decentralized API infrastructure Pocket Community, and is slated to develop cross-chain bridges.

Some cutting-edge blockchain initiatives have additionally participated within the pocket ecology, akin to SOLANA, Matic, iCon, and many others. Technical groups akin to BlockSwap Community, Api3, Web3API, Fuse, and SKALE have additionally adopted POKT. see the determine above.

  1. Staff Members

Data publicly obtainable exhibits that Pocket Community at present has greater than 20 full-time professionals all over the world. Because the co-founder & CEO, Michael P O’Rourke took the lead in creating Pocket Community in April 2017. He additionally arrange Nonce+1 Labs, a blockchain improvement firm, and has served as CEO ever since.

The Pocket Community has a robust technical crew. Core personnel consists of senior blockchain engineers, APP engineers, full-stack software program engineers, Large Information architects, cross-chain know-how consultants, monetary know-how skills, cryptography consultants, and many others. The advisor crew has a balanced configuration, protecting enterprise, know-how, working, market and different fields.

Arweave

  1. Fundamental Data

Arweave is a decentralized community specializing in everlasting storage of knowledge. It goals to construct a knowledge storage platform that options one-time fee, everlasting storage, free studying, and tamper-proof.

Arweave is among the most popular storage strategies for NFT/Web3 initiatives. As a decentralized storage community based mostly on Blockweave know-how, it adopts the modern Proof of Entry consensus mechanism to regulate the quantity of knowledge saved by nodes, thus guaranteeing balanced information distribution.

  1. Ache Factors Solved

Web3.Zero is dedicated to breaking the monopoly and management of knowledge by centralized platforms. From this standpoint, Web3.Zero initiatives won’t retailer information on centralized servers. Subsequently, Web3.Zero initiatives could have large information storage necessities, rendering distributed storage an necessary infrastructure. In contrast with the normal centralized storage, distributed storage has the benefits of excessive safety, privateness safety, and prevention of single factors of failure.

Arweave has modified the info construction of conventional blockchains. Not each node must retailer all blocks, however every time a brand new block is acknowledged, it must confirm a earlier random block. This mechanism is known as Blockweave. Mixed with the Blockshadow mechanism that permits nodes to reconstruct a whole blockchain in response to the blockshadow and their very own transaction information, Arweave is ready to velocity up consensus and supply TPS.

  1. Token-based Financial Mannequin

Arweave’s token is known as AR. The whole variety of 66 million AR tokens are primarily distributed as follows: 31.4% for financing, 13% for the crew, 7.1% for strategic cooperation, 2.9% for advisor, 19.1% for ecological building, and the remaining 26.5% is reserved. The half for ecological building is principally to reward storage suppliers and encourage storage suppliers to course of orders, actively present storage providers for customers, and successfully preserve community nodes. A complete of 11 million block award tokens can be found.

Within the intrinsic incentive mechanism of Arweave, customers primarily eat AR tokens to buy storage providers and retailer information, whereas storage suppliers receive income by acquiring block rewards and offering storage providers.

At current, the tokens obtained by offering storage providers account for less than a small a part of the income of storage suppliers. Arweave has created a brand new consensus mechanism, Proof of Entry (POA), which requires storage suppliers to confirm historic blocks earlier than getting rewards. The extra blocks a storage provider has saved, the extra probably it’s for the storage provider to acquire block rewards.

Information supply: https://viewblock.io/arweave

  1. Companions

Within the Arweave ecology, essentially the most lively tracks are finance, social networks, content material distribution, verification, storage and archiving, DAO, and infrastructural instruments. At current, the ecology continues to be within the early stage of building. The next determine exhibits Arweave’s ecosystem.

  1. Staff and Investor

The Arweave crew consists of senior blockchain engineers. Dr. Sam Williams, founder & CEO of Arweave, is a decentralization fanatic with wealthy expertise in distributed system design and implementation. Sam Williams is an Englishman and at present has 15Ok followers on Twitter.

Funding establishments are very within the storage monitor. Arweave has raised funds from well-known buyers, together with high funding and financing establishments akin to a16z, Multicoin Capital, Union Sq. Ventures, and Coinbase Ventures.

Livepeer

  1. Fundamental Data

Livepeer (LPT) is a decentralized and extremely scalable protocol on the streaming media layer. Content material creators share real-time reside movies and obtain tokens (LPT) as rewards by way of video transcoding. Livepeer can operate as real-time media layer within the Web3 stack.

Transcoding is the method of reformatting the unique video file to make sure the very best viewing expertise. Anybody can take part in Livepeer and develop into an orchestrator by operating software program that permits them to contribute their pc assets (CPU, GPU, and bandwidth) in service of transcoding and distributing video for paying broadcasters and builders. Such orchestrators earn charges within the type of a cryptocurrency like ETH or a stablecoin pegged to the US greenback.

  1. Ache Factors Solved

Reside video streaming consumes greater than 80% of the Web bandwidth. For start-ups and builders, utilizing conventional video infrastructure to construct a brand new reside streaming platform means excessive prices. For streaming media purposes, one of the necessary price contributors is video transcoding. Take Alicloud for example, the typical transcoding price of an HD reside video streaming is as excessive as US$6.2 per hour.

Livepeer’s open Web3 video infrastructure supplies a creator financial system platform for reside streaming purposes. The platform helps the promoting help mode of conventional know-how platforms and promotes a extra economically possible ecosystem than these delivered by centralized reside streaming service suppliers.

  1. Token-based Financial Mannequin

LPT is a local practical token of Livepeer. Customers can contribute their computing assets to the community by way of a proprietary “transcoder”. Livepeer community will assign duties to the person’s GPU. After transcoding is accomplished, customers shall be rewarded with LPT tokens.

On the similar time, abnormal customers can receive revenue by staking their LPT tokens (thus changing into a delegator), and the staked tokens can vote for an orchestrator. At first of every spherical of consensus, the community will choose a bunch of orchestrators who get essentially the most votes for activity execution, and the orchestrators will get a corresponding variety of new tokens. If an orchestrator is discovered responsible, the staked tokens voted for the orchestrator shall be deducted.

Delegators who vote their tokens to an orchestrator can get part of the incomes from the orchestrator as fee. Subsequently, the delegator must discover a dependable orchestrator to vote with the intention to keep away from penalties, and the orchestrator additionally wants to ascertain a great popularity to make sure the help of the delegator sooner or later.

In accordance with the info CGV FoF finds on Livepeer’s official web site, the full variety of lively nodes has exceeded 100, the full charges earned are round US$322,000, and the full minutes of transcoded video are 8..Four million. The capability on Livepeer’s community represents entry to 70,000+ GPUs, or sufficient to encode all of the realtime video streaming by way of Twitch, Fb, and Youtube mixed.

  1. Staff Members

Livepeer lists 22 crew members on the official web site. As a undertaking that made its “debut” in 2017, its principal crew members have wealthy expertise in blockchain and profitable entrepreneurship, in addition to robust technical background. CEO Doug Petkanics graduated from the College of Pennsylvania with a bachelor’s diploma in CS, and CTO Eric Tang graduated from Carnegie Mellon College with a bachelor’s diploma in CS. The 2 co-founded the Wildcard cell publishing platform.

By way of financing, the undertaking has outstanding efficiency and has been invested by many well-known funding establishments. At current, Grayscale Funding Belief, Coinbase Ventures, PanteraCapital, Digital Forex Group, CoinFund, Animal Ventures and different establishments have invested in Livepeer.

Abstract

Web3.Zero has been established as the following route of human innovation. Now we’re standing on the forefront of Internet 3.0, feeling the influence of the digital world and the bodily world.

Pocket Community has entered an enormous and intensely dynamic rising market. It has develop into an indispensable resolution for Web3.Zero infrastructure by offering trustless API protocol and relay community infrastructure. If it succeeds, the prices of constructing purposes shall be vastly decreased.

Storage has all the time been the important thing funding area of all events, and the significance of decentralized storage will develop into increasingly more outstanding. With the growing significance connected to information safety and person information possession, the long run efficiency of knowledge storage networks akin to Arweave within the huge and promising terrain of three.Zero is price wanting ahead to.

If the video infrastructure resolution supplied by Livepeer is corresponding to the centralized different when it comes to high quality and prices much less, it can promote the event of the ecosystem, which is extra economically possible than the centralized reside streaming providers.

With the event and maturity of Web3 market, decentralized infrastructure will proceed to develop and develop into extra worthwhile, which is able to essentially change the connection and interplay mode between customers and the Web.

Be aware: This text is a CGV FoF analysis paper and is for reference solely. It doesn’t represent any funding proposal.

About CGV FoF: CGV FoF is an Asia-based Fund of Funds (FoF) that focuses on investments in Crypto Fund and Crypto Studio. CGV FoF consists of household funds from Japan, Korea, and China’s mainland and Taiwan, with headquarters in Japan and branches in Singapore and Canada.

Reference

  1. https://POKT.community/wp-content/uploads/2020/03/POCKET-NETWORK-WHITEPAPER-V0.3.0.pdf
  2. https://www.POKT.community/pocket-dao-what-to-expect/
  3. https://www.POKT.community/making-metamask-highly-redundant-by-relaying-through-pockets-decentralized-ethereum-api/
  4. https://www.POKT.community/governance/
  5. https://insights.deribit.com/market-research/infrastructure-lego-the-middleware-thesis/
  6. https://cointelegraphcn.com/information/pocket-network
  7. https://www.arweave.org/know-how#papers
  8. https://www.theblockresearch.com/mapping-out-arweaves-ecosystem-118779
  9. What Is Internet 3.0 & Why It Issues (2020), Material Enterprise, https://medium.com/fabric-ventures/what-is-web-3-0-why-it-matters-934eb07f3d2b
  10. https://arweave.medium.com/profit-sharing-tokens-a-new-incentivization-mechanism-for-an-open-web-1f2532411d6e
  11. https://coinmarketcap.com/alexandria/article/profit-sharing-communities-a-deep-dive-by-arweave
  12. https://github.com/livepeer/wiki/blob/grasp/WHITEPAPER.md#livepeer-token
  13. https://medium.com/livepeer-blog/the-livepeer-roadmap-2021-and-beyond-5281776e9b3d

 

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