Analysis

Pocket Network, Arweave, and Livepeer

—  By Vargason, CryptogramVenture FoF Research Fellow

Before the rise of blockchain, Web3.0 can solely keep within the idea stage as a result of lack of options. With the event of blockchain expertise, various Web3.0 associated tasks have emerged.

According to the Web3 Index compiled by web3index.org (an internet site that tracks protocol utilization throughout your entire Web3 stack), up to now 30 days, the income and different complete indexes of Pocket Network, Arweave, and Livepeer ranked among the many prime relative to different tasks. Pocket Network is at present the Number 1 middleware, with its 30-day income greater than 30 instances that of Arweave. In November, the charges paid by builders elevated by 208%.

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

Web3.0 can’t be constructed within the air.  Before Web3.0 functions may be adopted on a big scale, the blockchain infrastructure have to be improved. In this text, CryptogramVenture FoF (hereafter CGV FoF) focuses on three blockchain tasks, particularly, Pocket Network, Arweave, and Livepeer, and introduces the essential infrastructural parts of Web3.0 from three features: API, storage, and streaming media.

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

Pocket Network

  1. Basic Introduction

Pocket is a distributed API infrastructural mission constructed for Web3 functions. It gives a trustless API protocol that’s obtainable for all main blockchain networks.

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

  1. Pain Points 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. This can also be one of many many Single Points 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 may nonetheless commerce and work together by way of DApps or good contracts. This was doable primarily because of the truth that the Pocket Network node operator has a wide range of Ethereum purchasers, which makes the community service extra versatile.

Michael O’Rourke, CEO and co-founder of Pocket Network, believes that centralized infrastructure suppliers will need to have a lot of obtainable buffers to fulfill further wants. Due to the decentralized design of Pocket Network, it solely wants to start out and run a small a part of the backup buffer, thus lowering the service price. According to the corporate’s estimates, the Pocket Network companies are “at least 10 times cheaper” than centralized companies.

  1. Token-based Economic Model

Pocket Network 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 individuals to profit from it. In the Pocket ecology, builders and nodes are the inflexible demanders of POKT.

Developer: Uses POKT tokens to implement API requests, thus acquiring extra environment friendly however inexpensive distributed API request companies.

Node: Possesses a specific amount of POKT tokens to supply node companies, and is awarded with POKT tokens for offering API companies and implementing builders’ API requests.

Because every get together of the market has its personal distinctive incentive mechanism, the bidding costs of either side additionally differ. The whole provide will probably be restricted by the burning mechanism established by DAO that controls the token coverage. The final whole provide of POKT will probably be decided by DAO.

How does POKT turn out to be a less expensive answer? The reply is to stake POKT as an alternative of paying AWS payments. As the variety of relays and nodes will increase, knowledge will turn out to be cheaper. It is anticipated that the price of every relay will finally stabilize at a sure order of magnitude within the subsequent few years.

Although the community continues to be in its infancy, the variety of nodes retains rising at a big price.

This new type of cost by staking could turn out to be a supply of potential friction within the means of adoption. However, as soon as POKT succeeds, we could have discovered an efficient method to join numerous Web3 middleware infrastructures with tokens.

  1. Partners

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

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

  1. Team Members

Information publicly obtainable reveals that Pocket Network at present has greater than 20 full-time professionals around the globe. As the co-founder & CEO, Michael P O’Rourke took the lead in creating Pocket Network in April 2017. He additionally arrange Nonce+1 Labs, a blockchain improvement firm, and has served as CEO ever since.

The Pocket Network has a powerful technical crew. Core personnel contains senior blockchain engineers, APP engineers, full-stack software program engineers, Big Data architects, cross-chain expertise consultants, monetary expertise abilities, cryptography consultants, and many others. The marketing consultant crew has a balanced configuration, protecting enterprise, expertise, working, market and different fields.

Arweave

  1. Basic Information

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

Arweave is without doubt one of the most well-liked storage strategies for NFT/Web3 tasks. As a decentralized storage community based mostly on Blockweave expertise, it adopts the revolutionary Proof of Access consensus mechanism to regulate the quantity of information saved by nodes, thus making certain balanced knowledge distribution.

  1. Pain Points Solved

Web3.0 is dedicated to breaking the monopoly and management of information by centralized platforms. From this standpoint, Web3.0 tasks is not going to retailer knowledge on centralized servers. Therefore, Web3.0 tasks may have huge knowledge storage necessities, rendering distributed storage an essential infrastructure. Compared with the normal centralized storage, distributed storage has some great 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 named Blockweave. Combined with the Blockshadow mechanism that enables nodes to reconstruct a whole blockchain in accordance with the blockshadow and their very own transaction recordsdata, Arweave is ready to velocity up consensus and present TPS.

  1. Token-based Economic Model

Arweave’s token is named 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 marketing consultant, 19.1% for ecological building, and the remaining 26.5% is reserved. The half for ecological building is especially to reward storage suppliers and encourage storage suppliers to course of orders, actively present storage companies for customers, and successfully preserve community nodes. A complete of 11 million block award tokens can be found.

In the intrinsic incentive mechanism of Arweave, customers primarily eat AR tokens to buy storage companies and retailer knowledge, whereas storage suppliers get hold of income by acquiring block rewards and offering storage companies.

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

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

  1. Partners

In the Arweave ecology, essentially the most energetic 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 following determine reveals Arweave’s ecosystem.

  1. Team 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 15K followers on Twitter.

Investment establishments are very within the storage observe. Arweave has raised funds from well-known traders, together with prime funding and financing establishments reminiscent of a16z, Multicoin Capital, Union Square Ventures, and Coinbase Ventures.

Livepeer

  1. Basic Information

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

Transcoding is the method of reformatting the unique video file to make sure the perfect viewing expertise. Anyone can take part in Livepeer and turn out to be an orchestrator by operating software program that enables 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. Pain Points Solved

Live video streaming consumes greater than 80% of the Internet bandwidth. For start-ups and builders, utilizing conventional video infrastructure to construct a brand new dwell streaming platform means excessive prices. For streaming media functions, one of the vital essential price contributors is video transcoding. Take Alicloud for example, the common transcoding price of an HD dwell video streaming is as excessive as US$6.2 per hour.

Livepeer’s open Web3 video infrastructure gives a creator economic system platform for dwell streaming functions. The platform helps the promoting assist mode of conventional expertise platforms and promotes a extra economically possible ecosystem than these delivered by centralized dwell streaming service suppliers.

  1. Token-based Economic Model

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

At the identical time, strange customers can get hold of revenue by staking their LPT tokens (thus turning into a delegator), and the staked tokens can vote for an orchestrator. At the start of every spherical of consensus, the community will choose a gaggle of orchestrators who get essentially the most votes for job 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 will probably be deducted.

Delegators who vote their tokens to an orchestrator can get part of the incomes from the orchestrator as fee. Therefore, the delegator must discover a dependable orchestrator to vote with a purpose to keep away from penalties, and the orchestrator additionally wants to determine a great repute to make sure the assist of the delegator sooner or later.

According to the info CGV FoF finds on Livepeer’s official web site, the full variety of energetic nodes has exceeded 100, the full charges earned are round US$322,000, and the full minutes of transcoded video are 8..4 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, Facebook, and Youtube mixed.

  1. Team Members

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

In phrases of financing, the mission has outstanding efficiency and has been invested by many well-known funding establishments. At current, Grayscale Investment Trust, Coinbase Ventures, PanteraCapital, Digital Currency Group, CoinFund, Animal Ventures and different establishments have invested in Livepeer.

Summary

Web3.0 has been established as the following course of human innovation. Now we’re standing on the forefront of Web 3.0, feeling the influence of the digital world and the bodily world.

Pocket Network has entered an enormous and extraordinarily dynamic rising market. It has turn out to be an indispensable answer for Web3.0 infrastructure by offering trustless API protocol and relay community infrastructure. If it succeeds, the prices of constructing functions will probably be tremendously decreased.

Storage has at all times been the important thing funding discipline of all events, and the significance of decentralized storage will turn out to be extra and extra outstanding. With the rising significance hooked up to knowledge safety and consumer knowledge possession, the longer term efficiency of information storage networks reminiscent of Arweave within the huge and promising terrain of three.0 is value trying ahead to.

If the video infrastructure answer offered by Livepeer is corresponding to the centralized different when it comes to high quality and prices much less, it should promote the event of the ecosystem, which is extra economically possible than the centralized dwell streaming companies.

With the event and maturity of Web3 market, decentralized infrastructure will proceed to develop and turn out to be extra useful, which can essentially change the connection and interplay mode between customers and the Internet.

Note: This article 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.network/wp-content/uploads/2020/03/POCKET-NETWORK-WHITEPAPER-V0.3.0.pdf
  2. https://www.POKT.network/pocket-dao-what-to-expect/
  3. https://www.POKT.network/making-metamask-highly-redundant-by-relaying-through-pockets-decentralized-ethereum-api/
  4. https://www.POKT.network/governance/
  5. https://insights.deribit.com/market-research/infrastructure-lego-the-middleware-thesis/
  6. https://cointelegraphcn.com/news/pocket-network
  7. https://www.arweave.org/technology#papers
  8. https://www.theblockresearch.com/mapping-out-arweaves-ecosystem-118779
  9. What Is Web 3.0 & Why It Matters (2020), Fabric Venture, 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/master/WHITEPAPER.md#livepeer-token
  13. https://medium.com/livepeer-blog/the-livepeer-roadmap-2021-and-beyond-5281776e9b3d

 

Image: Pixabay

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