Difficulty: Intermediate

Overview of Crust Network

Crust Network is a parachain within the Polkadot ecosystem, built on Layer 1 blockchain. It’s designed for developers, builders, and users, offering a decentralized storage solution that supports various protocols, including IPFS, and promotes on-chain storage functions.

Crust Network is now one of the largest decentralized cloud storage systems, easily hosting websites, DApps, NFTs, and personal files. Crust aims to build a decentralized cloud ecosystem prioritizing data privacy and ownership.

Currently, Crust has 1592 global nodes, 740,000 TB of storage capacity, and 2.417 million storage orders, with annual storage costs of $0.001349 per GB. In the Crust storage market, you can be a user needing cloud space or a node (storage merchant or validator) providing storage resources and earning revenue if your hardware meets the requirements.

Image from Crust

Crust vs. Traditional Google Cloud Storage

For example, Google Cloud Storage’s lowest price in the Asia region is for file storage in Singapore, which costs $0.0015 per GB per month and $0.0018 per year.

Google Cloud Storage costs vary by region and plan, while Crust’s fees adjust dynamically based on network resources. Crust offers discounts through staking $CRU as collateral, whereas Google provides a $300 free trial for new customers.

Besides price differences, Google’s centralized cloud storage is more expensive and shares data privacy with Google. Crust’s decentralized storage uses IPFS and encryption, reducing data leaks and ensuring privacy.

Crust: A Complete Solution for Decentralized Hosting & Storage

Crust Network provides a decentralized storage solution for both Web 3.0 and Web 2.0 ecosystems. It’s developed on the Substrate framework of the Polkadot ecosystem, connected as a parachain to the Polkadot network, facilitating token exchanges. Crust offers a unique incentive protocol for IPFS and uses blockchain and TEE technology to enhance data security, privacy, performance, and ownership.

What are IPFS and TEE?

IPFS and TEE are specialized terms in computer networks, essential to Crust Network.

IPFS (InterPlanetary File System)

A distributed file system that stores and shares data using peer-to-peer technology, making data storage and transmission more secure, private, and efficient.

Key Point: IPFS serves as a gateway in Crust Network, enabling distributed storage and data retrieval. Crust uses IPFS to build a decentralized storage market.

TEE (Trusted Execution Environment)

A secure area for running data and applications in isolation, protecting sensitive information from external attacks. It ensures data confidentiality and integrity through secure processors and memory encryption.

Key Point: TEE provides a secure environment in Crust Network for safe data storage and processing, ensuring the reliability of smart contracts, preventing internal attacks, verifying node behavior, and protecting data during storage and retrieval.

Crust Network Application Scenarios

Crust Network’s extensive application scenarios suit various storage needs, including DApps, website hosting, NFT storage, public file storage, decentralized social networks, encrypted file storage, and gaming data. The main categories include:

1. Serverless DApp/Website Hosting: Deploy DApps & websites on the Crust/IPFS network, incentivizing nodes to store files and provide services.
2. General Off-Chain Data Storage: For data-intensive platforms like NFTs and decentralized social networks exceeding on-chain capacity, Crust/IPFS offers off-chain storage.
3. Accelerated Content Delivery: Developers can use Crust/IPFS to create P2P content delivery network (CDN) services, accelerating data transmission.
4. Secure Cloud Storage: Integrate Crust/IPFS SDK into applications for stable storage services.

How DoesCrust Network Work?

Crust Network is a Polkadot parachain, enhancing data capabilities through decentralization and establishing a Decentralized Storage Market (DSM). Participants include validators, candidates, guarantors, and users. Launched in 2021, Crust uses GPoS and MPoW as core technologies to support and optimize IPFS, enhancing its security and user experience.

Crust Technical Stack Overview

• Decentralized Physical Infrastructure: Validators, storage & gateway providers
• Blockchain & Storage Protocol: GPoS, MPoW, DSM, TEE, IPFS
• Interoperability and Tools: EVM, XCMP, X-Chain contracts, Pallet, SDK, API
• Applications: Crust Files, Crust Cloud, IPFS Scan

Source: crust.network

Core Component sWorker

sWorker (Storage Worker) is crucial for MPoW, developed with TEE technology. It functions like a warehouse manager or quality inspector, joining the network to validate node storage claims.

Relationship between sWorker, MPoW, and GPoS

MPoW (Meaningful Proof of Work) and GPoS (Guaranteed Proof of Stake) are essential to Crust’s operation. GPoS uses MPoW’s Storage Workload Report for dual verification, monitoring nodes, and preventing attacks, while MPoW relies on sWorker to validate the report’s data.

What is sWorker? How Does it Operate?

sWorker verifies and quantifies node storage workloads, reporting to the Crust blockchain. Nodes’ storage capacity determines their guarantee quota.

sWorker ensures the node’s claimed storage capacity is genuine through SRD (Sealed Random Data) and sealfile encryption methods.

1. SRD: Generates random data for verification, storing the hash as proof.
2. sealfile: Encrypts meaningful files, storing encrypted blocks externally with proof in sWorker for verification.

Dual Verification Consensus Mechanism: MPoW and GPoS

MPoW (Meaningful Proof of Work)

MPoW is a storage verification system that doesn’t require high trust. It calculates node workloads and verifies their environment to ensure miners’ storage tasks are genuine. Currently, MPoW uses TEE (Trusted Execution Environment) technology, involving three main processes: storage, reporting, and verification.

Here’s how it works: nodes receive and store distributed data on hard drives. During this storage, a spot check program periodically runs in the TEE to verify the Merkle Hash and ensure the claimed storage space is used correctly. The TEE regularly checks the node’s storage status and generates verifiable workload reports.

The MPoW system includes two types of proofs: environmental and workload. Its advantages are transparency, efficiency, and adaptability. The TEE protects the storage node’s workload and reward calculations, preventing cheating. It excludes redundant data storage and supports complete, continuous computation and evolution.

GPoS (Guaranteed Proof of Stake)

GPoS is a variant of the PoS (Proof of Stake) consensus mechanism, developed on the Substrate framework. Similar to NPoS, users can vote for specific nodes, but GPoS treats voting as a guaranteed quota. GPoS uses the Storage Workload Report from MPoW to calculate storage-related parameters.

Each node has a Staking quota based on its proven storage resources and workload. Nodes must provide storage resources to get a corresponding guarantee quota. With a guaranteed quota, nodes can stake a certain amount of $CRU. More storage resources mean a higher equity cap. This dual verification mechanism combines storage resources and staking.

To control the Crust network, one needs a large amount of CRU tokens and enough storage resources, to prevent attacks through this dual verification model.

Participants in the Crust System

The Crust system has multiple participants with different roles. They include validators, candidates, guarantors, and users (specifically users of storage and computing resources). Here’s an overview:

1. Validators: Nodes that pack and generate blocks, maintaining the blockchain network. They need storage resources and staked CRU tokens. Validators earn block packing and periodic rewards but also bear the risk of asset forfeiture and can profit by selling storage resources.
2. Candidates: Nodes competing for validator status but not yet qualified. They need storage resources and staked CRU tokens but do not generate blocks, hence no block rewards. Candidates earn periodic rewards and sell resources. Validator and candidate statuses can change each period based on staked tokens.
3. Guarantors: Accounts providing guarantees for nodes. Any CRU token holder can be a guarantor, using their CRU as collateral to earn guarantee income.
4. Users: Consumers of Crust network resources, mainly storage and computing resources, purchasing services with CRU or other tokens.

Crust’s GPoS consensus requires nodes to stake CRU tokens and provide storage resources to compete for validator positions. Under the MPoW system, more contributed storage resources mean a higher corresponding limit.

IPFS W3Auth Gateway

A gateway connects different networks, handling communication between different protocols, data formats, or architectures. A hardware gateway acts as the automation hub for smart home devices, relaying information and enabling centralized, remote, or linked control.

Crust Network’s IPFS Public Gateway (IPFS GW) is an HTTP-based service that allows browsers and tools unfamiliar with IPFS to access IPFS content. It bridges Web2 and Web3, providing read-and-write API calls for easy interaction with IPFS content.

Crust Network Products

Crust Network offers products like Crust DSM, Crust Cloud, Crust Files, and IPFS Scan.

Crust Cloud: Web3 cloud service products, tools, and APIs for building Web 3.0 experiences, especially in decentralized data storage and retrieval. Crust Files: A Web 3.0 personal file sharing dApp supporting EVM chains. IPFS Scan: A free, open IPFS browser application for users to search and check file storage status and details.

Decentralized Storage Market (DSM)

DSM (Decentralized Storage Market) is an IPFS Pin service on the Crust network, allowing users to place storage orders on-chain. Files specified in the orders (IPFS CID lists) are stored by Crust nodes. DSM incentivizes storage nodes to provide retrieval services and supports decentralized storage technologies like IPFS and DHT.

Storage market services include file storage and retrieval, with participants divided into two categories:

Storage Users: Users needing data storage and retrieval, including Web2 and Web3 users.
Storage Merchants: Nodes providing storage services to earn rewards, consisting of sWorker modules, storage arrays (hard disks, etc.), and network service modules.

MPoW’s local TEE-based storage capacity calculation and verification enhance workload computation efficiency and reliability. Crust Network’s TEE-based system supports encrypted channels and data sealing between nodes. Users can transmit and store private data securely through encrypted channels.

Key DSM functions and mechanisms include:

1.Pricing Mechanism: Storage orders are network-wide, not single-node. Dynamic costs are calculated based on current storage supply and demand when generating orders, including base fees, file size fees, key-value fees, and user tips.

2.Storage Order Mechanism: User-generated orders contain storage needs and file descriptions. Once paid, files are stored long-term in the Crust network. Fees go into various pools, including the revenue pool and reward pool.

3.Retrieval Service: Both users and nodes need retrieval services. Node income depends on retrieval efficiency. DSM offers retrieval rewards, promoting service provision through a reward cycle.

4.File Renewal, Settlement, and Discounts:

• File Renewal: Users can pre-charge CRU for renewal, with any agent using the funds for renewal.
• File Settlement: Initial merchants receiving orders continuously earn revenue, needing to actively apply for it.
• File Order Discounts: Locking CRU provides up to a 10% fee reduction.

Source: apps.crust.network

Crust’s Cross-Chain Solution

In the Web3 world, decentralized storage (dStorage) is crucial for efficient and affordable data storage. However, managing data across different blockchain platforms can be challenging. To solve this, Crust Network offers a storage solution combining cross-chain messaging (XCM), native IPFS, and smart contracts.

Solution: XCM, Native IPFS, Smart Contracts

1.Cross-Chain Communication with XCM:

Crust Network uses Polkadot’s XCM technology to handle data requests and storage orders between blockchains. This means users of Substrate-based parachains can easily send storage requests to Crust and pay with their tokens.

2.Native IPFS Integration:

Crust Network integrates IPFS natively, so users can upload and manage data without running IPFS locally. Users can use Crust’s IPFS W3Auth gateway to ensure their data is persistent and accessible.

3.Smart Contract Functionality:

Crust deploys smart contracts on multiple blockchains, providing flexible order management. Contract owners can set parameters for merchant service nodes, and users can calculate prices and place orders based on file size, even directing orders to specific merchant nodes.

Advantages of Crust Network

Compared to services like Filecoin and Arweave, Crust has several potential benefits:

• Cross-Chain Compatibility: Crust works with multiple blockchains, including Ethereum, Polkadot, and Binance Smart Chain, making it easy for developers to integrate Crust with their projects and offering users the flexibility to store data across different chains.
• Lower Storage Costs: Crust claims lower storage costs than competitors like Filecoin and Arweave, making it more affordable for users needing large-scale storage.
• Faster Access Times: Crust uses distributed caching to speed up access to frequently accessed files, providing faster data retrieval compared to other decentralized storage networks.
• User-Friendly: Crust offers user-friendly interfaces and tools (e.g., Crust Files app), making decentralized storage accessible even to non-technical users.

Crust Network Tokenomics

Crust’s economic design ensures stability and aligns with value growth, protecting all participants’ interests and encouraging contributions to the system.

Participant Functions and Revenue Structure

Participant Functions

The main participants in Crust (Layer 1) are:

• Storage Merchants: Nodes providing storage and retrieval services, earning revenue through DSM.
• Validators: Nodes responsible for block generation, and maintaining the Crust network. They provide storage resources and workloads as collateral to stake CRU tokens and must stay online.
• Candidates: Nodes competing for validator status, providing storage resources and staking $CRU. They do not generate blocks but can earn reward shares and revenue from offering storage services.
• Guarantors: Accounts providing guarantees for nodes. Any account with $CRU can become a guarantor, earning guarantee income and sharing the risk of node penalties.
• Users: Consumers of Crust network resources, mainly storage and computing, purchasing services with $CRU or other supported tokens.

Revenue and Cost Structure

• Merchants: Earn from storage and retrieval fees, with costs including hardware, maintenance, and electricity.
• Validators: Earn from block rewards and cycle shares, with costs including CRU token staking for storage and workload guarantees.
• Candidates: Earn from cycle shares, with costs including CRU token staking for storage and workload guarantees.
• Guarantors: Earn from guarantee income, with costs being staked CRU tokens.
• Users: Pay for storage and computing services.

CRU Token

CRU is Crust Network’s native token, essential for the network’s value. The total supply is about 31.7 million CRU, with 14.13 million circulating.

1. Token Functions:

• Staking: Supports GPoS consensus.
• Guarantee: Ensures node service reliability.
• Collateral: Provides resource services.
• Transaction Fees: Used for network transactions.
• Resource Purchase: Buys storage services.
• Governance: Used for on-chain voting and proposals.

2. Token Generation and Burning Mechanism:

Generation:

• One-time generation at mainnet launch: 20,000,000 CRU, allocated as follows:
• Community Development: 5,000,000 CRU (25%)
• Ecosystem Construction: 2,000,000 CRU (10%)
• Professional Investment Institutions: 5,000,000 CRU (25%)
• Technical Team Rewards: 4,000,000 CRU (20%)
• Foundation Reserve: 4,000,000 CRU (20%)
• Block Generation Rewards: Block rewards are issued each cycle, with the following details:
• First Year: 5,000,000 CRU
• Starting from the Second Year: The issuance decreases by 12% annually until the network’s inflation rate stabilizes at 2.8%.

Source: medium.com

Burning:

• Node penalties: Unstable or malicious nodes will forfeit staked CRU, with some tokens burned and others entering the treasury.
• Transaction fees: Some fees are burned, while others go to block-generating nodes.

3. Token Value:

CRU, as the utility token of Crust Network, derives its value from the overall usage and scale of the network. The value of CRU tokens is primarily reflected in two ways:

• Locking or Occupying: Activities such as deposits for storage and retrieval services, payments for storage services, on-chain governance voting, and staking for the consensus mechanism reduce the circulating supply in the market.
• Burning: Some transaction fees are burned, decreasing the total supply.

4. Additional Information

Crust Network’s economic model is designed to fairly distribute the benefits among all participants, ensure the security of the network protocols, and incentivize various participants to join the network. This model uses CRU as a value carrier and circulation tool to sustain the system’s development.

What is the total supply of Crust? Is it unlimited?

The total supply of CRU is not unlimited. Within 15 years of the mainnet launch, the supply will approach 50 million. Each year, the production decreases to 88% of the previous year’s amount, with the first year’s production being 5 million CRU. This information is detailed in the Crust Network white paper.

Team & Investors

Team

Bova Chen, Co-Founder & CEO: Over 15 years of financial investment experience, founder of Winsun Capital.

Leo Wang, Co-Founder & CTO: Over 14 years in IT, co-founder of Ruixuetang Technology.

Steve Shi, Marketing & Operations Director: Over 10 years in IT market operations, project management, and product management.

Source: tokeninsight.com

Funding

$3 million in Series A funding in 2020. Multi-million dollar investment from DWF Labs in 2023, specific amount undisclosed.

Source: rootdata.com

Conclusion

Crust Network is a powerful decentralized storage solution offering users complete data ownership. With its impressive tech stack and wide range of use cases, Crust Network is well-positioned to play a significant role in the future of data storage.