The decentralized storage project Walrus, which raised $140 million, will become a DeepSeek moment for the SUI ecosystem?

Author: Frank, PANews

The decentralized storage protocol Walrus recently completed a $140 million financing round, led by Standard Crypto, with participation from institutions such as a16z crypto and Electric Capital, making it the highest amount raised in a recent on-chain project.

Decentralized storage, as an old narrative, has sparked industry discussions due to its ability to secure this scale of financing in the current market environment. From the perspective of Walrus, it is not only attempting to reshape the decentralized storage track by drastically reducing costs but also represents Mysten Labs' new strategy to upgrade Sui's performance and optimize its token economics.

Walrus may reduce the cost of decentralized storage by 100 times

According to official information, Walrus is a decentralized storage and data availability protocol designed to provide secure and efficient storage solutions for large files and unstructured data. It is developed by the Sui development team Mysten Labs and built on top of the Sui blockchain, aiming to revolutionize the way data is managed in decentralized networks.

From a technical standpoint, Walrus's core technology is erasure coding, which divides data into smaller units called slivers and distributes them across multiple storage nodes. This method allows for data recovery even in the event of failures at up to two-thirds of the nodes, ensuring high availability and reliability.

The more significant practical implication of this innovation may be in terms of cost. With the use of error-correcting code technology, Walrus's replication factor has been reduced to 4-5 times, significantly lowering storage costs and approaching the efficiency of centralized cloud services. In comparison, Filecoin's replication factor is about 25 times, while Arweave can be as high as 100-1000 times. Based on this calculation, Walrus's storage costs could be 80-100 times lower than those of Filecoin and Arweave. Furthermore, due to file segmentation limitations, Walrus is also suitable for applications that require large volumes of data, such as AI datasets and media files.

According to SuperEx's estimates, the annual storage cost for 1TB of data on Arweave is about $3,500, while the cost for Filecoin ranges from $200 to $1,000, and Walrus only requires $50.

As of March 23, the data shows that approximately 80TB of data storage has been conducted on the Walrus test network, with a total of over 13.45 million addresses. In addition, there are currently 109 projects running on the test network, many of which are native projects of Walrus. The project types are mainly mini-games, and well-known institutions such as Tusky, Decrypt Media, and Chainbase have already been attracted to collaborate.

Sui ecosystem's "turbocharger", 1EB storage target = 15% SUI token burn

Of course, in today's market environment, it seems quite difficult to gain high recognition from capital solely through the narrative of technological innovation. One possible reason for Walrus achieving substantial financing is its connection to Mysten Labs. As the development team behind the Sui network, Mysten Labs had completed a financing amount of $336 million before the launch of the Sui network. The leading investors in this round for Walrus, including Standard Crypto, a16z crypto, and Electric Capital, have also appeared on the list of investors in Sui.

In the statement released during the launch of Walrus, it can be seen that the initiation of Walrus stemmed from the upgraded demand for the storage issues of the Sui network. After its launch, Walrus alleviated the storage pressure on the Sui network by providing an efficient decentralized storage solution.

In addition, according to a report by SuperEx, each stored blob in Walrus requires the creation of a metadata object on Sui, which will consume SUI tokens as gas fees. If Walrus usage increases to 1EB(exabyte), it is expected to consume about 240 million SUI annually (accounting for 15% of the current circulating supply), indirectly affecting the network economy. By the fourth quarter of 2024, Filecoin's total storage capacity is approximately 4.2EB.

Mysten Labs also announced in March the acquisition of the Web3 gaming infrastructure startup Parasol. With the performance improvements from Walrus, the Sui network may focus on AI and gaming in the future.

The recent influx of capital seems to remind the market that decentralized storage is still a promising market. According to a report by Codex.Storage in December 2024, the decentralized storage market is expected to experience further expansion in 2025 as AI expands and more enterprises adopt hybrid cloud solutions.

has successfully distributed an airdrop worth 80 million USD through NFT.

The huge financing has also led the market to believe that Walrus could become another major airdrop player. WAL is the native token of Walrus, with a maximum supply of 5 billion and an initial circulating supply of 1.25 billion. An official announcement from Walrus shows that over 60% of WAL will be used for the community. However, upon closer examination, it is clear that this does not mean that the initial airdrop ratio will be very high. It is reported that a total of 10% of the tokens will be used for user airdrops, with 4% allocated before the mainnet launch and 6% to be distributed after the mainnet goes live. In addition, 43% of the tokens will be used for community reserves, which will fund the long-term development and growth of the Walrus ecosystem, including community funding and programs, developer support, core research of Walrus, incentive programs, community activities, hackathons, and other ecological projects, managed by the Walrus Foundation. The mainnet is expected to launch on March 27.

Investors will receive a total of 7% equity, which will begin to unlock 12 months after the mainnet goes live. Based on the $140 million financing corresponding to the 7% token share, the cost per WAL for investors is approximately $0.4. The valuation of WAL has reached $2 billion, compared to the current fully diluted market value of around $6 billion for Filecoin.

Currently, 4% of the tokens before the mainnet launch have been distributed to users participating in the testnet in the form of NFTs. The remaining 6% of the airdrop will be allocated after the launch through community incentives and ecosystem participation.

When the Web3 world is still exploring the ultimate form of the storage track, Walrus has opened a new path with the technology combination of "error correction code + low replication factor". This is not only a revolution in storage costs, but also a paradigm breakthrough in the self-iteration of the Sui ecosystem - by converting storage consumption into an economic engine for SUI tokens, Walrus is weaving a multi-dimensional value network covering data storage, on-chain interaction, and AI training.

With the advancement of the 1EB storage goal, this behemoth consuming 15% of circulating tokens may become the best driving force for the growth of the Sui public chain. In the year 2025, when AI data demand surges, can Walrus's hundredfold cost advantage leverage the hundred billion dollar cloud storage market? The answer may be hidden in the storage curve at the launch of the mainnet.