Moderator: Blair Zhu, Mint Ventures
Guest: Qi Zhou, Founder of EthStorage
Interview time: July 21, 2023
Blair: Hello everyone, welcome back to Web3 Founders Real Talk. We are here to bring you a candid conversation with industry leaders. Today we are happy to have a special guest on the show, Dr. Zhou, founder of EthStorage and first place winner of EDCON Super Demo 2023. Welcome to the show.
Qi Zhou: Hello everyone, I am very happy to introduce EthStorage to you here.
EthStorage Project Introduction
Blair: Dr. Zhou, could you briefly introduce yourself and your project?
Qi Zhou: No problem. My name is Zhou Qi, and I’m the founder of EthStorage and Web3 Access Protocol. I joined the crypto space full-time in 2018. Before that, I worked as a software engineer at Facebook, Google, EMC Dell, and also got my PhD at Georgia Tech. My previous work was mainly focused on infrastructure. So when I entered the Web3 space, I found that there was a lot of room for improvement in Web3 infrastructure. That’s why I spend a lot of time on Ethereum infrastructure, especially in data availability, sharding technology, and Layer2 technology. EthStorage is probably the first provider of Storage Roll Up upgrade solutions for Ethereum, so we can meet storage needs, especially for high-value data on Ethereum. It is built on Ethereum’s data availability technology, especially EIP4844. This is a major improvement for Ethereum in the upcoming Cancun upgrade. I’m excited to share more about EthStorage and what we are building here, and how we can enable new applications on Ethereum.
Blair: Thank you for sharing. The first question is, what factors prompted your team to prioritize the development of EthStorage? Because you mentioned that your goal is to build a Storage Roll Up upgrade solution on the Ethereum platform, we would like to know why you built this project in the first place.
Qi Zhou: That's a great question. The motivation to build EthStorage started about two years ago when there was a wave of NFT craze, like BAYC, Azuki, and Doodle Punks. At that time, our team did some research on all these projects. We were very surprised that each of these NFT images could be sold for more than 10 Ethereum, which is now more than $10,000. But the images themselves are stored on third-party platforms and centralized servers like Filecoin and Arweave, which means that these images can disappear at any time. This made us think that Ethereum, as the core of web3 infrastructure, needs some infrastructure to help it store this data more securely, without worrying about them disappearing one day. So users can not only own those corresponding NFTs, with IDs like ERC721, but also have corresponding images. All of this raw data belongs to the user. This is the initial idea of EthStorage. We have found a way to solve this problem. We understand that Ethereum is moving towards some basic proof upgrades to fundamentally solve this problem with data availability. So we are very happy to be able to participate in the development of Ethereum. We received two grants from the Ethereum Foundation to support this work, and also won first place in the EDCON Super Demo.
Challenges facing EthStorage
Blair: Yeah, that's really impressive. You found the pain point, which is the risk point of all centralized storage. So you proposed to do decentralized storage and thought about making some changes. You mentioned that you have been committed to building infrastructure, so the next question is about builders. In such a dynamic industry, as a builder, how do you deal with fluctuations in the environment? For example, have you faced any kind of resistance or resistance when building projects? What strategies do you use to ensure stability and ensure the development of the project? I think this is an ongoing challenge for everyone.
Qi Zhou: Of course. Take NFT two years ago as an example, it was super hot at that time. We also witnessed some things, such as the collapse of FTX exchange and Terra. So the whole Web3 craze is changing, like NFT has become much cooler than one or two years ago. People are asking what can we build on Web3, what will the future be, what new applications will be. I think we are doing things from a more strategic and long-term perspective. We are thinking about what we should do, or what the industry should do in the next 5 or 10 years. For example, we can imagine if there is a world of computers, sometimes I joke that the computing power before or now is more like a world of calculators because the computing power is too low. Once we solve all these infrastructure problems, both in terms of storage and computing power in TPS, we will be able to execute most of the current Web2 applications on Web3, and at the same time bring the value of Web3 to all Internet users, just like the Internet brought it to users when there was no Internet and mobile phones. Now, most people can easily enter Web3 and enjoy all the benefits that the Internet provides. So, this is our long-term vision. We firmly believe that this should happen, and we also firmly believe that our technical capabilities can contribute to this blueprint. In addition, we also need to determine our own professional skills, because the evaluation is very dynamic, there are many new technologies and new ideas, and we must find differentiation beyond technical expertise. I have been an infrastructure engineer for more than ten years, and I know all the solutions and understand this field. With the accumulated knowledge in this field, we are confident that we can solve this problem within a few years. So, from a big direction, we first convinced ourselves to stay in this industry, and we can make it better through our own contributions.
EthStorage’s Competitive Advantage
Blair: You are a group of people who believe in this industry and have a common mission, which is why you are not carried away by trends. I do feel that as an entrepreneur, you need to be able to identify trends and know which trends will actually be beneficial to your project. It is very complicated, and I am very happy to see that you are doing so well. We mentioned some names at the beginning who are also working in the decentralized storage space. We want to know if your project has specific advantages or unique differences that can distinguish it from other storage solutions such as Filecoin, Arweave, etc.
Qi Zhou: First of all, we don’t want to say we want to kill all projects like Filecoin or Arweave like we do with our competitors. We think about how we can add more value to the existing decentralized storage market. Filecoin and Arweave are more for static, sometimes we call it cold storage from the system design architecture. Large amounts of data can be uploaded to decentralized storage, but they are not often modified or deleted because Arweave does not allow data to be deleted. EthStorage is doing a different market category that we believe is becoming more and more important, namely high-value hot storage data that can be modified. Users use smart contract logic, so we are able to program those big data using smart contracts, while enabling many new applications that Filecoin or Arweave are not good at. This is a major unique feature that EthStorage provides. The second point is that EthStorage, as the name suggests, is highly integrated with Ethereum, and users can directly use their existing wallets so that they can interact with all applications built on storage, whether it is NFT, decentralized social networks or decentralized games. We hope to minimize the barriers for users to enter and enjoy EthStorage. They only need to use Ethereum to pay for storage fees, transaction fees, and wallet fees. From the developer's perspective, they only need to be familiar with the Ethereum development stack, including smart contracts, solidity, truffle, waffle, all these libraries and tools, and they will be able to build applications on EthStorage. These two major differences inspired us to build EthStorage and fill what we believe is a huge gap in the decentralized industry, so that we can build more good applications on top of it.
How EthStorage lowers the storage barrier
Blair: It sounds like you're trying to lower the barrier to entry for users and developers, can you explain more about that? For example, the permissionless nature of the storage layer 2 network, how it enables individuals like us with very small storage needs to become storage providers?
Qi Zhou: That’s a good question. Actually, people are asking a lot about permissionlessness now, not only for storage providers, but also for many Layer1 projects. Especially for Ethereum beacon chain stakers, you must have at least 32 Ethereum. As far as I know, to become a storage provider in Filecoin and Arweave. Usually you need a very powerful machine with very advanced GPU and a lot of storage space. This is something I think should be done and can be done better. From the beginning, we designed EthStorage so that ordinary personal computers, such as my laptop, or my desktop at home, can become a node, and as long as it has a minimum storage capacity of, say, four terabytes, it can become a storage provider and serve the corresponding data, charging users to pay us to store smart contracts. Based on this, we believe that we can encourage more users or storage providers to provide better censorship resistance in a mostly decentralized environment. Take the Library of Alexandria, it was destroyed because it was a single point of failure. But now we are like a more powerful, distributed, and global Library of Alexandria, which is why we are so excited to build this solution.
How does EthStorage achieve high storage capacity at low cost?
Blair: Based on your point, I have a personal question. I did see what you have to offer and one thing really shocked me. We can see that with EthStorage we are able to achieve very high storage capacity targets while reducing storage costs to a very significant factor of one thousand. I'm personally curious, are there any trade-offs or limitations here? Because in the crypto world, there may not be a win-win situation. How do you solve it?
Qi Zhou: This must come together with the improvement of basic technology. The most important improvement is built on the Ethereum data availability level. We all know that data availability is a very hot topic right now. So Ethereum is scaling, and of course there are some other ideas. I would say this is probably the next major protocol Layer1 feature, with all Layer1s gradually supporting this. Thanks to these technologies we can significantly reduce the cost of data uploads. Basically, we need to upload the data to the decentralized network in a public way, which means no one can stop me from uploading the data, not even the central government. So this is a very important breakthrough. Ethereum currently aims to improve this performance by 10x or even 100x, which will bring significant value and significantly reduce the cost for users to store data, images, front-ends or tweets on the Ethereum network. This is not built by us, we receive funding from the Ethereum Foundation to help them achieve this goal as quickly as possible. Everyone wants to know how to use it. For example, we are releasing libraries to support EIP4844. This is an advancement in underlying technology that allows us to achieve significant storage cost reductions on Ethereum.
EthStorage interaction with EVM
Blair: That's what we were just talking about, we need to identify what things might be really beneficial to the project as we take advantage of this amazing technology. It doesn't matter who brings it, it's about how you can use it in the product. So that's really great. In the first question, you mentioned that there's actually a lot of integration with Ethereum because Ethstorage is built on Ethereum and wants to be more compatible with the Ethereum stack. And also, you guys have integration with the EVM. I think that's something that we haven't seen in a lot of areas. How does EthStorage interact seamlessly with the EVM? And also, what impact does this integration have on the overall functionality and performance of your project?
Qi Zhou: Interaction with the EVM requires a corresponding protocol upgrade, but it is still the Ethereum DA. Let's say the first major feature that implements it is called EIP844. In more technical terms, it introduces new features to Ethereum that allow the EVM to access data hashes. Although the corresponding data is not available in the EVM, it is available on Ethereum. So it extracts the corresponding data so that the data hash can be provided to the EVM. No one can forge the 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, and Ethereum provides security guarantees. This is a major upgrade. Although I know that many people may be confused by the technical details, this expands the data that can be uploaded to Ethereum. So we no longer tell everyone what the data is, because that would be slow, just like a rumor, it's like I spread all this information, like broadcasting. I only spread a very short summary that the data is available to everyone. Then I tell them that if you really need this data, go to the validators who are responsible for this data. It's like now we have different departments, such as the Ministry of Finance, the Ministry of Justice, if you have something that needs data, go to these departments, and they guarantee to provide the corresponding data to everyone. So now we're like building hierarchical structures that can distribute data, instead of broadcasting a lot of data to everyone. That's how we can improve the efficiency of that, just like we do with human organizations. Like when we had a small tribe, people talked to each other. Now we have more things, like towns, countries, then we need to do more things to separate these different roles. This is what we call data sharding. Sharding is like separating these roles and data into different storage or different validators. This is how Ethereum solves this problem. This is also how humans solve the scalability problem.
Possible applications of EthStorage on L1 and L2
Blair: There's a lot of information to digest here. I have to admit, because I'm not a technical person. But I can understand from your wonderful explanation that we are now able to interact more directly with smart contracts. So this will definitely lower the threshold for users and developers, and also reduce costs. Thank you for bringing up these three main features. I think everyone listening today will have a better understanding of your project. Let’s talk about the future and vision again. We all know that the Arweave and Solana partnership had a very significant impact during the past bull cycle. So, do you have any cooperation plans with other Layer1, other chains, and other ecosystems? Considering what we've witnessed before, we wonder if you would do the same.
Qi Zhou: Yes, we are open to working with all Layer1s. This relies on data availability technology on Layer1. Unfortunately, most Layer1s don't have such features, either on the roadmap or still in the planning stage. This makes our cooperation a little difficult. But first of all, EthStorage is a modular storage layer, which means that as long as there is EVM and DA to reduce storage costs, you can run it on any blockchain, even on Layer2. You know, Layer2 Optimism, Arbitrum, they work very well on Layer2, and then small Layer2s are emerging. EthStorage can also run on these Layer2s and further reduce storage costs. So these are some of our directions now, in addition to only deploying on their Layer1 with the corresponding EIP4844 for upgrading, this is something we are working hard to build, so that more applications can run with lower storage costs. For example, we are currently preparing for fraud proofs for Optimism. Many people complain about Optimism because they don't have fraud proofs now. So we are thinking about how to use our technology to implement fraud proofs on Optimism. We have also enabled the corresponding DA layer on Optimism, and this fraud proof is optimized, using the ZK technology we built with EthStorage. There are a lot of exciting things to solve at the infrastructure level. We really believe that with the scalability of Ethereum's current computing power and the storage capacity provided by EthStorage, we can build a lot of applications on the blockchain, or do anything that was impossible before, for example, decentralized email, decentralized Mirror, decentralized media, decentralized Twitter where all data is stored on Ethereum and EthStorage. There are a lot of exciting things that have become possible because of these technical roadmaps. So, we are now more focused on Layer1, Layer2, and Ethereum architecture.
Challenges and potential of decentralized storage
Blair: That’s really impressive, especially since Thread just launched and everyone is talking about how to decentralize the whole social media thing. People are starting to see the beauty of decentralized storage. I think it’s inevitable that we’ll see this trend sooner or later. My next question is, we all know that decentralized storage is a new technology that offers many benefits and advantages, but it also has its own challenges and limitations. What do you think are the main challenges and limitations of decentralized storage in general? Not just for your project, but for the entire field?
Qi Zhou: From a big 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 Web2 vs Ethereum. On Filecoin, I know a lot of people complain that there is a lot of meaningless data that stays on Filecoin persistently because Filecoin issues a lot of tokens to reward those storage providers for whatever they store. This means that a lot of people just create garbage data, claim to store data, and then charge storage fees. However, token inflation is not an organic way for an ecosystem to grow because it dilutes the value of existing token holders. We need more organic external users who are willing to use tokens to pay gas fees or storage fees and consume it. So I think this is a very significant problem, not only for Filecoin, Arweave, but also for many other Layer1 projects. Once they issue their tokens to sustain the network, I don't want to name names, but I know some well-known projects are suffering from this problem, how to ensure that the token has enough organic utility value to attract a large number of users. That's why we do it in a different way. A lot of people say, since you have very good technology, very professional in understanding DA storage and smart contracts, why don't you build a single Layer1 that meets all orders, combining the features of Ethstorage and a lot of other features that people are building, such as ZK-snark. The answer is that creating this type of Layer2 with a new token at this stage will be very difficult to launch, especially to attract users to run the network organically. This is the power of Ethereum Layer2. At the head of Ethereum Layer2 like Optimism and Arbitrum, when they launched the network, they didn't need tokens, they just needed to show their value first. Once the value is well established, then accordingly, whether it is a governance token or other types of tokens can create value for them and be better able to receive ecosystem feedback. And all these like DAO just choose to manage. So I think this is a better way to run a storage project, especially I believe this may be the biggest challenge not only for storage projects, but also for Layer1 projects.
Blair: Thank you for sharing all the challenges we are facing now, and I completely support your point of view. I also want to share my point of view here. I think it all comes down to market demand, because now people can only see that this is an emerging industry, see the issuance of these tokens and the crowds, and this industry is full of all kinds of speculation. I think this may be the underlying reason. Let's talk about something positive. What factors do you think are driving the demand for decentralized storage? What may be the potential drivers or catalysts that can really drive the future growth of decentralized storage? Considering that the main catalysts of DeFi are mining and Uniswap V2, we also know how many restrictions or limitations there are in traditional finance, so this is why we have the DeFi Summer, which is really crazy and we have all witnessed this. What do you think about this? What do you think about the potential drivers of decentralized storage? In addition, are there any other trends you want to share with everyone?
Qi Zhou: Yes, I think from many applications we have observed so far, people are becoming more and more aware of the importance of data ownership, like NFT is a good example. People will say, this is ours, I can protect and should always protect, just like some paintings painted by Picasso or like famous buildings, all these things in digital art should be able to be decentralized and owned by decentralized protocols. This is a growing demand. In addition to this, there is also a demand to ensure that we have a neutral Internet, or Internet neutrality. In fact, this is some of the topics I often debate when I was at Google, how can we better achieve the neutrality of the Internet so that it is a public good and not so much manipulated by power groups. I think blockchain and smart contracts, as well as decentralized storage solutions, put them together, is a very good platform to provide a better Internet and better neutrality. In fact, decentralization is also designed for neutrality, and everyone can participate in the network, whether it is an ordinary person or a rich person, or even a high-ranking government official. This is the real amazing thing about Web3 or the future of the Internet. Take the recent hot Twitter and Threads dispute as an example, many people complained that Twitter has various restrictions. For example, when I sometimes publish some technical articles, I don't know why I was blocked by Twitter, saying that you can't publish this article. I think there is no way to unblock it once it is blocked because it is controlled by a highly centralized monopoly company. And with the Internet we have better ways to organize, we have DAOs, better ways to communicate with the community, and better ways to censor, not just censorship, but also to solve those spam problems. With them, we can use tokens and all kinds of things, and we are building a better way to organize the entire Internet. Democratize Internet resources, instead of being hosted by those centralized companies, such as servers, and their websites, now we are able to build in a better collaborative way on Web3. We believe this will create a lot of demand.In addition, based on the current blockchain's more powerful computing power, it also creates more demand for storage. So we believe that if there are more and more such demands, people will find a better way to solve this problem on Web3.
Blair: Yeah, as you said, I think people are starting to realize how much our lives are being manipulated, including the way they use all that big data to collect information about you, and they're implementing a lot of policies on posting and a lot of things, targeting our conversations and our speeches. I think people are starting to see the beauty of decentralized storage, so I would say decentralization is definitely inevitable, and sooner or later we'll see mainstream acceptance of it. Thank you very much for sharing your expertise and insights, especially about the project, and I'm looking forward to seeing more innovations in EthStorage. Thank you very much for your time, Dr. Zhou.
Qi Zhou: Thank you for the invitation. I am very happy to share EthStorage on the show. You are also welcome to contact me via Twitter, email or Discord to share your ideas about EthStorage and help us build it better.
Blair: I definitely will. Thank you very much.
Qi Zhou: Thank you.
Original interview link: WEB3 Founders Real Talk with EthStorage Recap
Interview video: WEB3 Founders Real Talk with EthStorage
Interview Audio: WEB3 Founders Real Talk with EthStorage
