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0g
Apr 8, 2024
0G is the highly scalable data availability and data storage solution required to drive Web3 forward. While other data availability solutions already exist, they are restricted in performance and programmability and lack any large-scale data storage system. Solving these challenges is critical, given the industry’s shift towards modularity and the pressing need for solutions that power on-chain AI and similar use cases.
That being said - many of these concepts are cutting-edge and can be challenging to navigate.
This article dives into key concepts and technologies shaping this evolution, including:
Data Availability
On-chain AI / Crypto AI
Restaking
Modularity, and more
By the end, readers will have a strong understanding of where the space is headed and 0G’s role in bringing it to fruition.
Data Availability Layer (DAL):
Ethereum’s future is a rollup-centric roadmap with Layer 2 networks at its core. Layer 2 solutions are technologies that increase the throughput of blockchain applications by handling transactions off of the main Ethereum chain (Layer 1) to alleviate network congestion and reduce fees. For example, Arbitrum or Optimism handle transactions off-chain, but must publish their data to Ethereum for security purposes. The challenge is that publishing this data to Ethereum is expensive, and the amount of such data posted on Ethereum is growing at an unsustainable rate.
A Data Availability Layer ensures that data submitted to a blockchain is available for users and applications to access when needed. While Ethereum has its own DAL and has historically handled this, this is costly, and specialized DAL solutions are quickly arriving to reduce such costs. However, the solutions thus far are insufficient for many use cases, due to their limited throughput and inability to store vast amounts of data.
One of 0G’s key focuses is acting as a Data Availability Layer that’s highly scalable and can support applications like on-chain AI and large-scale dApps.
On-Chain AI / Crypto AI:
On-chain AI, also known as crypto AI, refers to the fusion of AI with blockchain and is receiving significant attention, for good reason. On-chain AI integrates AI models directly onto a blockchain network, enhancing smart contracts with adaptive, self-learning capabilities.
A recurring theme in traditional AI is the opaque nature of model training. Typically only the firm itself is aware of critical details, such as a) how sensitive data is handled, b) potential biases in the data, c) any negative externalities that may arise, and more. With Web3, AI can be run on-chain in a fully transparent manner. Some use cases are already arriving on-chain (e.g. on-chain investment strategies), these tend to handle computations off-chain and bring the response on-chain, which is still opaque. This must be solved if we wish to have decentralized AI fully on-chain.
A primary reason this is challenging at present is that there is no sufficient way to store such a vast amount of data on-chain, nor an efficient way to handle the gas fees associated with these complex calculations.
0G provides a scalable and efficient data availability layer, crucial for AI's data-intensive demands. It is over 1,000x cheaper than Ethereum danksharding (which is years away), and 4x cheaper than Solana’s Firedancer. We expect exponential growth in the Web3 AI space, and 0G provides the necessary infrastructure to support this.
Restaking:
Ethereum inherits its security from the total amount of staked ETH, which validators have provided as collateral and is currently valued at over $100B. A project deploying on Ethereum thereby inherits its security, but for projects outside of Ethereum, they must bootstrap their security which can be time-consuming and costly.
Restaking was pioneered by EigenLayer and allows Ethereum validators to opt-in to provide their staked ETH as security for new projects. In turn, they receive additional staking rewards but increase their slashing risk.
For example, a project could use restaked ETH as collateral, paying a yield to restakers in exchange for this security.
Modularity in Web3:
Modularity in blockchain refers to a specialized approach where individual chains perform specific tasks rather than the all-encompassing role of monolithic chains. For example, if one were to deploy on Ethereum, its security would be inherited but the project would be competing with others for network bandwidth and be restricted in the ability to customize the tech stack for specific needs.
The shift towards modularity has been led by Celestia, and modular blockchains excel in specific tasks, such as a focus on high-frequency trading. Modular blockchains offer several advantages over monolithic ones, including greater flexibility in application development, lower costs for users, and broader accessibility.
0G will also support modular networks that may use 0G as a Data Availability Layer, and in turn, inherit the advantages inherent to 0G.
Decentralized Identity (DID):
Decentralized Identity (DID) introduces a paradigm shift in digital identity management, enabling users to control their data without relying on centralized entities. They represent a type of identifier compatible with various blockchain networks.
DIDs can represent any subject in a globally recognized manner, such as:
People
Organizations
Devices (iPhone, computer, any smart-device, etc)
Products
Locations (any location can be globally recognized)
Zero-Knowledge Proofs (ZKPs):
Zero-knowledge proofs (ZKPs) are core to ZK rollups and refer to a cryptographic technique that allows one party to prove the truth of a statement to another party without revealing any specific information about the statement or knowledge itself.
This enhances privacy and scalability, as calculations can be handled off-chain with only a ZKP sent to authenticate that calculations were done correctly, without revealing any underlying information.
For example, ZK rollups such as ZkSync can use this to prove the validity of their calculations. Currently, this is more expensive than optimistic rollups such as Arbitrum, but it is expected that over time the costs will decline substantially.
Tokenomics:
Tokenomics encompasses the economics of tokens within the blockchain ecosystem, including aspects like distribution mechanisms, supply, demand, and incentive structures. It's foundational for designing sustainable and growth-oriented Web3 projects.
0G's approach to its token model and incentives for nodes and participants is currently being carefully developed alongside input from leaders in the space.
Conclusion
Topics covered in this article are at the forefront of the blockchain space. Having an understanding of these concepts places one in a strong position, and will help to make clear why a solution such as 0G is critically needed.
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