Walrus Protocol’s Technical Architecture: Erasure Coding and Decentralized Storage Innovation
Walrus Protocol, developed by the Sui team at Mysten Labs, aims to solve the high costs and low efficiency of traditional storage protocols through its innovative Red-Stuff encoding algorithm. Its core technologies include:
Two-Dimensional Erasure Coding (2D Erasure Coding)
Data is segmented into horizontal (primary slivers) and vertical (secondary slivers) matrices. The replication factor is only 4-5 times, which significantly reduces storage costs by 80-100 times compared to Filecoin (25 times) and Arweave (100-1000 times). For example, storing 1TB of data costs just $50 annually, much lower than Arweave’s $3500 and Filecoin’s $200-$1000.
Asynchronous Challenge Protocol
By enabling node cooperation to validate data integrity, this protocol avoids the continuous validation overhead that traditional protocols impose on the entire network, reducing the cost of storage proofs.
Deleteable Data Mechanism
This feature allows users to delete or modify data actively, addressing enterprise compliance needs and overcoming the traditional restriction of blockchain immutability.
As of March 2025, the Walrus testnet has stored 80TB of data, with 109 projects onboard, covering use cases such as medical diagnostics and media content, demonstrating its high availability and real-time capabilities.
Token Economic Model: Transparent Allocation and Long-term Incentives
The WAL token is the core of the Walrus ecosystem, with a total supply of 5 billion tokens and an initial circulation of 25% (1.25 billion tokens). The distribution strategy balances community incentives and sustainable development:
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Community-driven: 60% of tokens are allocated to the community, with 10% for airdrops (4% already distributed via NFTs to testnet users, 6% to be released after the mainnet launch) and 43% reserved to support ecosystem development.
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Investors and Contributors: 7% of tokens are sold to institutional investors at $0.4 per token (raising $140 million with a $2 billion valuation), and 30% is allocated to core contributors.
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Deflationary Mechanism: Through staking penalties and the reduction of inefficient nodes, the circulating supply is reduced. If the storage reaches 1EB (equivalent to 1/4 of Filecoin’s total capacity in Q4 2024), approximately 240 million SUI tokens will be consumed annually, representing 15% of its circulation, indirectly driving SUI deflation.
After the mainnet launches on March 27, 2025, the WAL token will be listed on exchanges such as MEXC and Upbit, with plans to integrate more platforms (like JuCoin) for liquidity support.
Synergy with the Sui Ecosystem: Bidirectional Empowerment of Storage and Public Chains
Walrus Protocol’s deep integration with Sui is evident in both technical complementarity and economic interlinking. As the “storage layer” for Sui, Walrus handles large, unstructured data (such as AI models and video files), while Sui manages metadata and smart contract interactions, reducing the mainnet storage pressure. Storage operations require SUI as gas fees, creating a positive feedback loop of “SUI demand growth → storage increase → SUI deflation.” If storage reaches 1EB, the annual SUI consumption could account for 15% of its circulation. Additionally, Walrus supports compatibility with frameworks like TensorFlow and PyTorch, providing trusted data storage for decentralized AI, and enabling the development of Web3 games, NFTs, and other use cases.
Investor Strategy: Focus on Technology Deployment and Ecosystem Expansion
For ordinary users, participating in Walrus requires attention to the following points:
Technology Validation
Post-mainnet, enterprise-level application adoption (targeting 50+ partners) and cross-chain bridge progress (planned for August 2025) are key indicators.
Exchange Selection
Choose compliant platforms to mitigate trading risks, and be cautious of early market volatility.
Long-term Strategy
Referencing similar projects like Filecoin (FDV $6 billion) and Walrus’ current valuation ($2 billion), if its storage cost advantage translates to market share, the token’s value may have growth potential.
In the short term, attention should be paid to the stability of the transition from testnet to mainnet. Long-term focus should be on quantum computing integration plans and the progress of open-source developer tools.
Neason Oliver
