VeradiVerdict - Issue #193
Decentralized applications (dApps) today have more users, use more complex computations, and have more significant on-chain storage requirements than ever before. To meet the ever-growing infrastructure needs of the nascent web3 and its users, the next generation of blockchains must offer on-demand storage and computation that are cheap and scalable, like AWS, without sacrificing the core premise of decentralization.
Subspace Network is a next-generation, massively distributed, and decentralized infrastructure layer that aims to support web3 at internet scale. Subspace introduces a novel architecture that can support millions of consensus nodes, which contribute their storage and computation resources to the network.
Each storage node must only store a partial replica of history, while computation is split amongst execution nodes.
All nodes also participate in the global consensus protocol, making the network highly distributed yet resilient and verifiable. With over 20k active nodes on the non-incentivized testnet, Subspace is becoming one of the most decentralized protocols in web3.
Subspace approaches each element of the blockchain trilemma as follows:
Security: Subspace uses a Proof-of-Capacity (PoC) consensus protocol where each disk of storage constitutes one vote towards electing the next block producer. PoC consensus is less capital- and energy-intensive than PoS and PoW respectively, allowing for a more eco-friendly, fairer blockchain. Block miners, called “farmers” in the Subspace ecosystem, pledge segments of their disk space to be used by the network to store past blocks. This allows them to participate permissionlessly, without any token staking.
Decentralization: Since more farmers mean more disk space being proposed for usage, increasing the decentralization of the network naturally means that on-chain storage costs go down for users. In addition, storage is a first-class citizen in the programming model on Subspace. Any object stored becomes part of the Subspace network history with strong crypto-economic guarantees of permanency, immutability, and retrievability. In the future, on-demand computation (execution) will be added on top of the storage layer.
Scalability: Subspace leverages a myriad of scalability features to guarantee high transaction throughput, including vertical and horizontal scaling and fast finality.
The network’s architecture enables true mass-scale decentralization of block propagation, incredibly cost- and speed-efficient transactions, enormous opportunities for interoperability, and a usable infrastructure layer for data-rich dApps with substantial storage requirements (like NFTs and the metaverse!).
On the network’s public testnet Aries, Subspace is archiving the entire history of the Polkadot network (12+ live chains) and has already archived the entire history of the Kusama network (27+ live chains), amounting to more than 54.5 million blocks and 242 GB of data total. This demonstrates how Subspace can support both dApps developers with their increasing resource needs and, in parallel, assist existing protocols in their decentralization efforts.
The team is also actively working on other aspects of the blockchain, including the tokenomics for Subspace Credits (SSC), the network’s native token, and a suite of developer tools for interacting with the network called Subspace Meta Services (SMS), and an incentivized public testnet called Gemini.
Altogether, Subspace reimagines how security, decentralization, and scalability are implemented on the blockchain from the ground up, making it an incredible infrastructure layer to power the next generation of dApps and decentralized technologies.
The Evolution of Blockchains
Since the seminal Bitcoin whitepaper popularized the modern concept of the blockchain back in 2008, the technology underpinning the concept of a decentralized public ledger has come a long way. Bitcoin represents what we now call the first-generation blockchain––a remarkable system of decentralized computation that enables a truly secure and permissionless payments network. Ethereum belongs to the second generation of blockchains, extending the model of decentralization to an entire computational system using the idea of smart contracts, enabling an entire ecosystem of decentralized applications (dApps) to be built on top of the network. Newer chains like Polkadot and Cardano are third-generation blockchains, designed with features to tackle emergent problems of decentralized architectures, such as scalability, interoperability between networks, and high fees.
As the dApp ecosystem continues to expand, there is a substantial demand for a fourth generation of blockchains which incorporates the learnings and technological advances of the past 1.5 decades. Specifically, dApps today have more users, use more complex computations, and have more significant on-chain storage requirements than ever before. To meet the technological needs of these dApps and their users, so-called “fourth-generation” blockchains must make features like scalability, cost-efficiency, and storage top-of-mind.
What is the Subspace Network?
Subspace is a novel fourth-generation blockchain infrastructure protocol that aims to allow web3 to reach internet scale. Over four years of R&D, the Subspace team has designed an innovative and highly decentralized protocol with the capacity for millions of node operators (called “farmers” in the Subspace ecosystem). Farmers can participate permissionlessly without staking any tokens; instead, they pledge segments of their disk space to be used by the network to store past blocks. Computation is split amongst separate execution nodes. With over 20k active nodes on their non-incentivized public testnet, Subspace is becoming one of the most distributed protocols.
Subspace takes a modular, bottom-up approach to its roadmap, with the first stage delivering a permanent smart storage layer. In the future, on-demand computation (execution) will be added on top of the storage. As a result, Subspace will be able to provide modular and highly scalable on-demand resources to web3 builders without sacrificing the decentralization premise––like a decentralized AWS to support dApps developers and protocol designers.
The project is built on top of the Substrate blockchain development framework, written in Rust, and positions itself as a powerful base infrastructure layer for other blockchains. The team is actively working to implement their solution to the blockchain trilemma––a term coined by Vitalik Buterin to describe the densely-researched claim that no blockchain can sufficiently achieve all three of security, decentralization, and scalability.
What’s different about how Subspace works?
Subspace’s design is perhaps best described through the three elements of the blockchain trilemma:
Security: To secure the network, Subspace starts from a Proof-of-Capacity (PoC) consensus protocol called Spartan. PoC was chosen to allow the lowest barrier to participation. In PoC consensus, one disk of memory constitutes one vote for the next block. Miners, known as “farmers” in the Subspace ecosystem, first offer segments of their disk space to be used by the network. Each segment of disk space is assigned a tag using a time-asymmetric permutation algorithm. Following the design of Ouroborus, Subspace then uses a random beacon to choose which of the offered sectors of disk space to use, by selecting a sector with a tag that “matches” the beacon’s value within some difficulty setting. The farmer who offered the chosen block is then able to produce the next block in the chain. The consensus protocol is further secured by myriad other features, including Proof-of-Replication, periodic recommitting of data, and a Proof-of-Time. Importantly, this PoC consensus protocol is generally fairer than Proof-of-Stake (since it is not capital-intensive) and more eco-friendly than Proof-of-Work (since it is not energy-intensive). Everyday users will soon be able to propose disk space to the network using the project’s incumbent Desktop Farmer.
Decentralization: One problem with PoC consensus is that of the “farmer’s dilemma,” where farmers become incentivized to maximize the amount of space they pledge towards consensus instead of using that space to retain the history of the network (storage). To mitigate this problem, Subspace extends the PoC consensus protocol of Spartan to a Proof-of-Storage of the history of the network. Farmers who store more pieces of the blockchain’s history are more likely to be elected to produce the next block. For this reason, storage is a first-class citizen in the programming model on Subspace. Any object stored becomes part of the Subspace network history with strong crypto-economic guarantees of permanency, immutability, and retrievability. Since the entire history of the blockchain is archived, developers can more easily produce simple, secure bridges between Subspace and other networks. Moreover, Subspace decouples smart contract computation and transaction mining by having farmers order transactions and having a separate set of nodes (called executors) execute transactions, reducing the burden of redundant computation on farmers. Like BitTorrent, each storage node only has to store a partial replica of the full history while still participating in the global consensus. This allows each additional farmer to bring more storage capacity and further secure the network. Most importantly, since more farmers means more disk space up for grabs, increasing the number of farmers drives down storage costs for the entire network without compromising on the security or decentralization.
Scalability: Subspace leverages a myriad of scalability features to prevent blockchain bloat and oversaturation of transactions. Some key ones include the Prism scalability proposal for secure vertical scaling, the Free2Shard design for flat horizontal scaling using a virtual beacon chain, and the Taiji fast confirmation protocol which allows the network to achieve nearly deterministic finality within 3 blocks.
Altogether, Subspace’s architecture enables true mass-scale decentralization of block propagation, incredibly cost- and speed-efficient transactions, enormous opportunities for interoperability, and a usable infrastructure layer for data-rich dApps with substantial storage requirements (like NFTs!). In addition, Subspace can assist existing protocols (L1s, L2s, parachains, subnets, and zones) in their decentralization efforts by offering robust data availability and archival history services.
What’s been done with the blockchain thus far?
Subspace currently only offers a public testnet called Aries, but will soon release an incentivized testnet called Gemini. On Aries, the project is building an archive of all blocks across the Polkadot (12+ live networks) and Kusama (27+ live networks) ecosystems to demonstrate Subspace’s incredible storage capacity and the benefits of storing blockchain history. More than 54.5 million blocks, amounting to 242 GB of space, have been archived at time of writing. Subspace has already managed to archive the entire history of the Kusama network, including its relay chain and all parachains, and is continuing to archive blocks as they are produced on Kusama. Subspace is planning to integrate with and support the Ethereum ecosystem next, with Avalanche, Cosmos and Near likely coming after.
Many aspects of the project are still in their development and testing stages, including the blockchain’s central token mechanism. Subspace Credits (SSC) are the underlying token of the Subspace blockchain, and are minted when farmers produce new blocks. At a high level, the tokenomics of SSC will largely mimic that of BTC; there will be a total fixed supply of SSC with a gradual decrease in emission over the years. SSC will be used to pay for storage and compute fees on the network, and will need to be staked to run an executor node, but not a farmer node.
The Subspace team is also building out an infrastructure portal for the blockchain called Subspace Meta Services (SMS), which will expose a variety of Subspace’s features to web3 builders in a more developer-friendly way, including a unified chain history API, a chain-agnostic NFT storage service, and a cross-chain asset exchange protocol.
Who’s behind the project?
The Subspace Network is being developed by Subspace Labs, a team that hails experience from Dapper Labs/Flow, Restream, Protocol Labs, Brave, Stanford, and more. The project was founded in 2018 by Jeremiah Wagstaff and Nazar Mokrynskyi originally as a peer-to-peer storage network focused on developer usability. In March, the team raised a $32.9 million round from Pantera Capital, Coinbase Ventures, Crypto.com, Alameda Research, and more to continue building out their new layer-one focused on being more eco-friendly, truly decentralized, and highly scalable and secure.
In sum, Subspace offers a promising vision for how a novel fourth-generation blockchain can offer substantial, tangible improvements in all of security, decentralization, and scalability. With its PoC consensus, Subspace secures its network in a way that is less capital- and energy-intensive than canonical consensus protocols, like PoS or PoW, allowing for a blockchain that is fairer and more eco-friendly than its predecessors. Additionally, by incentivizing block farmers to store the history of the network, Subspace ensures the entire blockchain history is accessible at any time and lowers the cost of on-chain storage with increasing decentralization. Moreover, by integrating various scalability features like vertical and horizontal scaling and fast finality, Subspace ensures that it can process an extremely high throughput of transactions, allowing it to support resource-intensive dApps and even serve as the base infrastructure layer for other blockchains. Altogether, Subspace reimagines how security, decentralization, and scalability are implemented on the blockchain from the ground up, making it an incredible infrastructure layer to power the next generation of dApps and decentralized technologies.
- Paul Veradittakit
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Hi, I’m Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.