The Ambitions and Challenges of Binance's New Storage Chain BNB Greenfield

Original Title: "Talking about the Trinity Ambition and Challenges of Binance's Newly Released Storage Chain"

Original Author: jason_chen, Have you understood this world a bit more today?

Last week, Binance released the Greenfield white paper for its storage chain: github.com/bnb-chain/gree… However, it did not create a significant buzz in the industry nor did it reflect in the price of cryptocurrencies. There is not much research in the storage field, mainly because there are too few players in this track, primarily Arweave and Filecoin. However, storage is undoubtedly one of the most important tracks in the blockchain field.

I will first help everyone outline the entire storage system's framework and history to facilitate the following understanding. Previously, I briefly mentioned that people often confuse decentralized storage with on-chain storage. The blockchain is a distributed ledger that itself has data storage capabilities, but what we currently refer to broadly, whether it's NFTs or Mirror, is not actually stored on the blockchain.

To ensure data immutability, each full node needs to perform backups. With 10,000 miners, even to store 1MB of information, the entire network would consume 10GB, which is very uneconomical. Therefore, the proposed solution is to store data off-chain and then index the off-chain storage address on the blockchain. For example, in the case of NFTs, you can see that the metadata is indexed to an IPFS link, and opening it leads to a folder.

Here, I want to expand on IPFS. It is a content-addressed peer-to-peer distributed storage system. In contrast to content addressing, there is address addressing. For example, if we store a photo in a cloud drive, the computer needs to know the IP address and domain name of that photo to find the data in the corresponding location. However, if that copy does not exist or the server is down, the file is also lost.

But perhaps someone has previously downloaded this photo and stored it on their computer, yet your computer does not know that the other party has this photo. Therefore, solving the problem of decentralized storage requires addressing content retrieval rather than address retrieval. This way, you do not need to tell the computer where to get the photo; instead, you just tell the computer what the photo looks like, and then the computer asks around who has a photo that looks like this. If someone does, they send it to you. However, the content may be very large, and direct brute-force retrieval is very time-consuming. Thus, the file content is hashed, and the hash value is stored as the file name. This allows for very quick retrieval of other hash values that match the photo's hash value. Once found, you can ask the other party to send you a copy of their photo, making the process efficient. This is the basic principle of IPFS, and storage has gone through three stages: centralization, multi-centralization, and decentralization.

So while IPFS is conceptually similar to blockchain, it does not have a direct relationship with it. However, for stable operation, many users need to contribute their storage space and network to become nodes. Thus, Filecoin, inspired by Bitcoin, is an incentive layer built on top of IPFS to incentivize nodes that store data. Therefore, it is essential to understand that regardless of the storage method, it ultimately resides on physical hard drives. Decentralized storage is a form of shared economy, where individuals with spare hard drive resources can contribute them.

In fact, when I discussed blockchain + AI yesterday, someone also mentioned computing power sharing. This has been explored in the past with projects like Kuaike Cloud and Jiluyun, but it ended up being a mess. I will discuss computing power sharing with everyone when I have time in the future.

However, Filecoin is an incentive layer built after the emergence of IPFS to incentivize storage service providers, while Arweave has integrated storage and blockchain more thoroughly. It has developed blockweave, which, compared to the traditional blockchain's linear structure, links each block to the next block and the two previous blocks: one from the front and one from the historical recall block. Nodes must provide proof of access when producing blocks.

This is different from proof of work (PoW). By accessing older random blocks in the blockweave history, miners can mine new blocks and receive rewards. This way, miners storing rare blocks can achieve greater long-term returns. Through this mechanism, it encourages nodes to store historical data as much as possible without consuming vast resources like PoW, so Arweave's native and permanent nature is higher than that of Filecoin.

As mentioned earlier, the blockchain itself also has data storage capabilities, and some people refer to the blockchain as a decentralized database. However, the most crucial responsibility of the blockchain is to serve as a decentralized ledger for recording transactions, not as a database. Storing large amounts of data is not the core function of the blockchain.

If we compare the blockchain to a computer, while it has memory to store a small amount of data, it needs external hard drives to store large amounts of data rather than cramming everything into memory. Therefore, decentralized storage takes on the role of an external hard drive, as long as it ensures that the stored items can interact with the computer and memory without change. For example, in Etherscan, you can see that the Input Data in each Ethereum transaction is the information written into the blockchain, but it can only be simple key-value type field data. Therefore, an external "hard drive" is still needed to supplement it.

The above is an explanation of the entire storage system and the principles of Filecoin and Arweave, the two leaders in decentralized storage. After this explanation, everyone should have a profound awareness of the importance and complementarity of decentralized storage in the blockchain. This is also one of the reasons why Binance wants to become a player in this space. With such a large track and such concentrated competition at the top, Binance's entry should have caused a significant stir, yet there has been almost no movement.

I believe the main reasons are:

1. Storage is a layer far removed from users, making it difficult for users to perceive and understand. Currently, storage is also primarily to B and then to C. For example, when Mirror integrates Arweave, we write articles on Mirror, but we do not know they are stored on Arweave.

2. The day the Greenfield white paper was announced coincided with the big buzz around Nostr, which was quite unfortunate.

3. The storage track has yet to explode.

The premise of storage is to have content, but the current web3 application layer is lacking in content production sources. For example, the largest track, DeFi, has nothing to do with content, and the NFT track has some connection to content but is not significant; it's just a small image that needs to be stored. After thinking it through, there are not many applications in web3 that have a large number of "content storage" scenarios like web2, so the storage track is far from users and limited.

However, as the web3 application layer explodes and generates a large number of UGC products with C-end interactivity, there will naturally be a surge in demand for content storage. Therefore, the endgame is visible, but the milestones to reach that endgame are currently unclear to me. Here, I will share my investment logic.

As I analyzed the LSD track earlier (you can refer to my previous articles on Lido and SSV), I deduced that as Ethereum transitions to POS, low-threshold staking service providers like Lido will emerge, leading to a large number of validating nodes. However, the centralization of operators will significantly harm the security of the Ethereum network, so the endgame must address the issue of operator centralization.

Once the endgame is visible, I look for three milestones: the launch of the Beacon Chain in 2020, the POS merge in 2022, and the Shanghai upgrade in 2023. The purpose of identifying milestones is to give you a psychological expectation of when the endgame will be reached and to find suitable entry opportunities. Otherwise, entering too early may lead to waiting for years. The Shanghai upgrade in 2023 greatly stimulated staking enthusiasm, exposing the issue of operator centralization. Therefore, the six months before the Shanghai upgrade was a good time to enter; otherwise, entering at the first milestone in 2020 would have meant waiting for two years.

The endgame of decentralized storage is visible, but I still cannot see the milestones in between. However, with the improvement of infrastructure and the emergence of applications like SocialFi this year, I believe this endgame will not come too late. Perhaps it is worth attempting to allocate a small amount to related assets in decentralized storage, but this does not constitute investment advice; everyone should DYOR.

Now back to Greenfield. As mentioned at the beginning, its ecosystem revolves around a trinity architecture: BSC chain, Greenfield, and dapps. Binance has a trading chain, and now a storage chain. The dapps developed by developers based on these two form their own system. Moreover, Greenfield is a sidechain with a cross-chain bridge native to BSC, both using BNB as the token. This combination completes the Binance ecosystem.

Thus, on one hand, the storage track is large enough to attract Binance's direct involvement, and on the other hand, it is an essential part of completing the Binance ecosystem.

By reading the white paper, we can see that the core of Greenfield is a storage chain and a network of storage nodes, which is quite similar to Arweave.

The storage chain has its own governance logic and incentive system, storing metadata, block state data, account information, permissions, billing, and other data.

It is worth noting that metadata exists on-chain, while there is a separate object storage system that stores object data off-chain. Again, taking NFTs as an example, the metadata is stored on-chain rather than on IPFS, but the image that occupies the most space in the metadata is still stored off-chain. This design may be Binance's consideration for performance and cost, retrieving the object data from off-chain using the on-chain metadata when needed.

BNB, as the native token of the storage chain, is used for governance and paying GAS fees, and it can flow between BSC and Greenfield. From this perspective, it adds another layer of value to BNB. However, I personally do not believe that BNB's price will benefit significantly from the storage track, as BNB's price is a composite of various factors, and storage empowerment is just one of them.

If you want to invest in the storage track, I believe BNB is not a good target; it would be better to invest directly in tokens specifically for storage, as these tokens' empowerment comes 100% from storage dividends. Of course, DYOR. Another point worth noting is that the Greenfield format is fully compatible with Ethereum EVM, making it easier for existing products to integrate. It is also quite interesting that the management of permission groups is detailed, allowing control over each account's permissions for data operations such as adding, deleting, modifying, and querying, which is quite practical.

To ensure data integrity, challenge proofs are introduced, similar to OP, allowing nodes to submit challenge transactions. Greenfield will also randomly issue challenge events similar to sampling checks. If a challenge is accepted, the validator will check the challenged node. If the challenge is successful, the challenger receives a reward, and the node is penalized. If the challenge fails, the data will have a cooling-off period during which it cannot be challenged again, thus avoiding resource waste.

Interestingly, it is not only used for data storage but also supports the creation of economic value based on data. For example, the data permissions mentioned earlier can also be cross-chain to BSC, becoming a digital asset on BSC. This is interesting; my data is valuable, and my operations on the data can also be valuable.

The participants in the entire Greenfield ecosystem are as follows: BSC undertakes dapp deployment, data resource mirroring, cross-chain, and consensus. Greenfield undertakes payment, data resources, cross-chain, and consensus. Note that Greenfield also has its own governance mechanism, so it has its own consensus, and SP nodes interact with Greenfield for data. The right image shows the network structure, which is quite similar to OP, with elected validators, etc.

In Greenfield, the account system is independent, and the format is compatible with BSC and Ethereum, so it has the conditions to support wallets in the future. Interestingly, Greenfield is a chain developed based on Cosmos, and Cosmos seems to be stabilizing its position as the Layer 0 leader. The recently popular Canto is also based on Cosmos, but I personally feel that Canto has some shadows of Luna; DYOR.

The tricky part for Binance is that BSC is a fork of Ethereum, unlike Aptos and Solana, which have their own independent technical systems, making it difficult to cultivate their own developer community. This issue is also faced by many EVM chains. As a storage chain aimed at developers, how to establish developer loyalty requires effort and consideration. Therefore, Binance needs to first switch existing dapps to Greenfield and then attract new dapps to integrate.

I spent almost a day outlining the situation of the decentralized storage track based on Binance Greenfield. I personally remain optimistic about the storage track and look forward to more truly usable application layer products emerging. In terms of infrastructure, whether it's smart wallets and account abstraction to lower user entry barriers or chains like Aptos and Layer that improve performance, the infrastructure for the application layer explosion has been laid. We are just waiting for the right conditions to attract users. Content may have subjective biases, and I hope for your understanding if there are any errors. I welcome discussions and exchanges.

"Feel free to follow my Twitter @jason_chen998" for the latest and most comprehensive information and to discuss with me.