Off-chain decentralized data is the scenario where Web3 challenges Web2

Author: Liang

Overview

The capabilities of Web3 infrastructure itself and the developer experience determine the adoption of developers, as well as the prosperity of the corresponding application ecosystem. Without Bitcoin's OmniLayer, there would be no USDT; without infrastructures like ConsenSys (MetaMask, Infura, Etherscan), Ethereum would not have DeFi, and the prosperity of NFTs would be difficult to achieve without Layer 2 and new high-performance public chains.

Currently, there are approximately 20,000 active Web3 developers globally, compared to around 20 million active developers worldwide. Therefore, improving the Web3 developer experience, onboarding more Web2 developers, and creating incremental markets have enormous potential and momentum.

From another perspective, the main limitation for existing developers is the current limits and possibilities of the technical components of Web3. One of the biggest limitations is dynamic data storage. Smart contracts, as the mainstream decentralized mutable data storage method, have obvious drawbacks such as slow read/write performance and high costs, forcing contract developers to learn Solidity Gas Golfing. Meanwhile, static data storage solutions like Filecoin and Arweave are primarily used for storing NFT metadata and images, failing to meet developers' needs for reading and writing dynamic structured data. In other words, there currently exists no solution for decentralized off-chain dynamic data storage that offers both a good developer experience and functionality.

Farcaster vs Ceramic

The closest protocols in the market are Farcaster and Ceramic, which are similar to the Bitcoin network and Ethereum as decentralized data networks.

Farcaster is a decentralized social protocol. In addition to implementing identity fid and username fname through on-chain NFTs, it achieves a user experience very close to Web2 social applications through a decentralized off-chain node network (hubs) and six types of data (CRDTs, a data structure that can achieve eventual consistency by merging different versions of data) tailored for specific social scenarios.

Farcaster also implements a decentralized off-chain data network, but the main difference is that Farcaster only supports six types of data, and developers cannot define new, customized data types based on their needs and scenarios. For general developers looking to create new social protocols, it is very difficult to develop a completely new decentralized data network by reusing Farcaster's six data types or forking the code (Farcaster has already secured $30 million in funding, and the decentralized nodes have not yet deployed the mainnet after two years of development).

Farcaster's advantage lies in its very active community in social scenarios, and the network is stable. These advantages have attracted many third-party developers to practice within the Farcaster protocol, leveraging existing decentralized data storage capabilities and the network effects of existing users.

Ceramic is a decentralized off-chain data storage solution, with advantages such as relatively high read/write performance and low costs (no gas fees). To maximize versatility and data composability, Ceramic allows developers to create custom data types to address various application scenarios, such as social, tools, and content applications. The primary use case is heavy data read/write, particularly in scenarios that are completely unsuitable for on-chain implementation, which certainly includes social scenarios.

As a general-purpose decentralized data storage layer that can define data types, Ceramic has the following characteristics:

• Data can be changed (mutable data), which distinguishes it from Filecoin and Arweave.
• Focus on structured data (e.g., JSON).
• Supports flexible, freely definable data types (developers can define new data types based on scenarios, unlike Farcaster).

However, Ceramic's biggest issue currently is poor developer experience, and the system's **stability still has room for improvement, which is very similar to Ethereum in *2016* and 2017.

In summary, Farcaster offers scenarios for end users and system stability for developers, but its fatal flaw is the non-expandability of data types. Ceramic, as a general data layer, requires third-party developers to practice specific scenarios, but currently suffers from poor developer experience and network instability.

Breaking the Deadlock

In conclusion, to ultimately perfect the essential scenario of off-chain decentralized data, two major challenges need to be addressed:

1. Provide users with infrastructure applications that make the value of transferable data more apparent, similar to the significance of MetaMask and Etherscan in the Ethereum ecosystem.
2. Improve developer experience and provide more stable protocol support.

Currently, this field still belongs to a blue ocean, with related projects like US3R Network, which is invested by DHVC. This project serves as a development platform and DApps ecosystem and is the only open-source data browser provider in the Ceramic ecosystem. It offers a complete set of integrated toolkits, including data wallets, data browsers, and developer consoles, as well as protocol enhancements, enabling developers to easily build applications on Ceramic.

Off-chain decentralized data has a long way to go, but it is also an essential tool for the transition from Web2 to Web3. The development of this field will directly shape the landscape of Web3 projects and pave the way for the return of data value.