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Walrus Protocol Technical Deep Dive: How Red Stuff Coding is Reshaping the Economics of Decentralized Storage
In the field of traditional decentralized storage, Filecoin and Arweave have addressed the data availability issue through full-copy replication and simple erasure coding techniques, but at the cost of high storage expenses. Walrus Protocol innovatively introduces the Red Stuff two-dimensional erasure coding algorithm, reducing storage redundancy to 4-5 times while enabling efficient data recovery in Byzantine fault-tolerant environments. This technological breakthrough not only redefines the storage cost curve but also lays a solid foundation for a programmable storage economy through deep integration with the Sui blockchain. This article analyzes Walrus's technological innovations from three perspectives: coding principles, network architecture, and economic model, and explores how it is driving decentralized storage to evolve from a "data warehouse" into a "data asset layer".i. Red Stuff Encoding Algorithm: XOR-Based Byzantine Fault-Tolerant Design
The core innovation of the Red Stuff algorithm lies in combining the flexibility of fountain codes with the fault tolerance of two-dimensional erasure codes, achieving efficient encoding through simple XOR (exclusive OR) operations. Its design includes two key dimensions: the primary dimension adopts a recovery threshold of f+1, supporting asynchronous writes, requiring only 2f+1 signature proofs to ensure data availability, forming a 3x replication factor; the secondary dimension uses a 2f+1 recovery threshold, achieving asynchronous storage proofs for the first time, introducing only 1.5x additional replication, keeping the total replication factor within 5x. This design enables Walrus to recover data even when up to 2/3 of the nodes fail, with recovery cost optimized to O(B) level, far lower than the traditional RS encoding complexity of O(n²B).
Compared to Irys's 10-replica mechanism, Red Stuff achieves space efficiency optimization through sharding matrix management. For example, storing 1GB of data requires only about 5GB of network storage capacity on Walrus, while Irys needs 10GB. More importantly, Red Stuff supports incremental recovery: when some nodes fail, the system only needs to download the size of the lost shards (O(B/n)), rather than the entire file, significantly reducing network bandwidth consumption. This characteristic makes Walrus particularly suitable for dynamic node networks, offering a sustainable solution for large-scale data storage.
II. Modular Architecture: Advantages of Sui Blockchain as the Control Layer
Walrus adopts a layered architecture design, separating storage functionality from the blockchain coordination layer. The off-chain storage layer handles data sharding storage and retrieval, while the Sui blockchain serves as the control layer, managing metadata, storage proofs, and economic incentives via Move smart contracts. This design brings three major advantages:
Instant ecosystem integration: Developers can directly leverage Sui's mature development tools and liquidity without having to build a validation node network from scratch;
Programmable storage: Through the Move language, storage strategies can be dynamically adjusted. For example, NFT projects can set automatic renewal rules, and AI platforms can define data access permissions;Cost isolation: Users pay storage fees using WAL, while SUI is used for on-chain transaction Gas fees, avoiding the impact of single-token price volatility on system stability.
However, this architecture also faces cross-layer coordination challenges. Each storage operation (upload, renewal, deletion) requires synchronization between the Sui chain and the storage network. When the Sui network is congested, it may affect storage performance. To address this, Walrus has designed an asynchronous challenge protocol: storage nodes periodically submit encrypted proofs to the chain, while actual data transmission is accelerated via CDN, ensuring user experience is not limited by blockchain performance.
III. Dual-Token Economic Model and Deflationary MechanismThe economic model design of the WAL token reflects a balance between practicality and governance value. As a utility token, WAL is used to pay for storage fees, stake in network maintenance, and participate in governance voting. Its unique feature lies in introducing a deflationary mechanism: a portion of transaction fees and seized tokens will be burned. As network usage increases, WAL gradually moves toward deflation. This design directly converts data upload demand into token value support, creating a positive feedback loop.
Compared to Irys's single-token model, Walrus's dual-token structure (WAL+SUI) increases user operational complexity but reduces system risk. Irys's IRYS token serves three functions simultaneously: storage fees, computational Gas, and miner rewards. If the token price drops, it may affect network security; whereas Walrus separates storage economics from on-chain settlement. WAL's value is primarily driven by storage demand, while SUI inherits the liquidity advantages of the Sui ecosystem. As of October 2025, the circulating supply of WAL is approximately 1.35 billion tokens, accounting for 29.57% of the total supply, with community reserves making up 43%, ensuring long-term ecological development.
IV. Application Scenario Expansion: From NFT Storage to AI Data MarketWalrus's technical characteristics give it unique advantages in specific scenarios. In the NFT space, its programmable storage supports dynamic metadata updates, providing foundational support for game assets and generative art NFTs. For example, the game Super B uses Walrus to store NFT game data, enabling players to upgrade equipment and trade via smart contracts. In the AI data storage market, Walrus's efficient encoding technology significantly reduces large model storage costs. Projects like Hyvve's decentralized AI data marketplace store training datasets on Walrus and use hash verification to ensure data integrity.
Notably, Walrus's 'leasing model' differentiates it from Irys's 'permanent storage' approach. Walrus users pay storage fees on a periodic basis (default epoch is 14 days), making it suitable for applications requiring flexible storage strategies; whereas Irys's one-time payment model is more focused on archival data storage. This distinction gives Walrus a cost advantage in scenarios involving frequently updated application data.
V. Challenges and Outlook: Node Decentralization and Cross-Chain ExpansionDespite its technological leadership, Walrus still faces risks of node centralization. Early investors control approximately 30% of the initial nodes, which may impact the network's decentralization. Additionally, the data deletion feature conflicts with the 'data immutability' principle in certain jurisdictions, requiring further development of compliance frameworks.
Key catalysts for future development include cross-chain integration and Layer 2 solutions. Walrus plans to achieve multi-chain storage through cross-chain protocols like Wormhole, with projects such as MultiChainWalrus already exploring the use of non-SUI tokens for payment of storage fees. Additionally, the collaboration with Alibaba Cloud Nest simplifies enterprise node deployment, reducing setup time to under 5 minutes, which is expected to further enhance network decentralization.
Walrus Protocol achieves breakthroughs in cost and efficiency in the decentralized storage sector through technological innovation in Red Stuff encoding and modular architecture design. Its dual-token economic model and deflationary mechanism provide a new paradigm for token value capture. With the surge in AI data storage demand and the expansion of the Sui ecosystem, WAL tokens are poised to become the key bridge connecting storage demand and on-chain economy.
@Walrus 🦭/acc #walrus $WAL #Walrus

Analysis of Dusk Foundation's Ecosystem Development Fund: How 15 Million DUSK Tokens Are Driving Innovation in the Compliant RWA Market
With the full implementation of the EU's (Distributed Ledger Technology Pilot Regime) in 2025, Dusk Foundation, a public blockchain protocol focused on regulatory compliance, is strategically deploying its ecosystem fund to seize early opportunities in the RWA (Real World Assets) sector. The 15 million DUSK ecosystem fund (worth approximately $9.88 million), established at the beginning of this year, has entered its phased disbursement phase, with primary funding directed toward archival and validator infrastructure, bidirectional cross-chain bridges, and decentralized exchanges three core areas. This strategy directly addresses current pain points in compliant asset tokenization: traditional financial institutions require blockchain infrastructure that meets regulatory standards such as MiFID II while also ensuring privacy protection. Dusk’s 'programmable compliance' feature, enabled by zero-knowledge proof technology, precisely fills this market gap.
From a technical architecture perspective, Dusk's Byzantine consensus mechanism (SBA) innovatively combines privacy and compliance. The confidential secure contract (XSC) standard allows developers to perform compliance checks on-chain without exposing sensitive data. For example, institutional users can use the Phoenix trading model to achieve transaction information confidentiality while meeting the audit requirements of the EU Markets in Financial Instruments Directive II (MiFID II). This technological advantage has already attracted real-world financial applications, such as the collaboration with the Dutch multilateral trading facility NPEX, where Dusk is assisting in tokenizing securities and establishing a secondary market, with an expected initial on-chain asset volume of 30 million.
The initial funding projects of the ecological fund highlight strategic targeting. The improvement of archival node infrastructure will enhance the efficiency of querying on-chain historical data, which is crucial for traditional financial institutions requiring continuous compliance reporting; while the development of bidirectional cross-chain bridges with Ethereum and BNB Chain can打@Dusk $DUSK s ecosystem and liquidity channels with mainstream DeFi projects. Notably, the launch of the Dusk Vault custody solution provides institutional investors with an asset storage solution compliant with MiCA regulations, significantly lowering the barrier for traditional finance users entering Web3.
The token economy model shows that the current circulating supply of DUSK is approximately 450 million tokens, with the ecological fund holding 3DUSK. The tokens will be locked in smart contracts until milestones are achieved, controlling the circulating supply while ensuring long-term developer commitment. According to on-chain data, 27 projects have already submitted funding applications, covering scenarios such as digital bonds, carbon credit trading, and tokenization of fund shares. If these applications are successfully implemented, they will create real on-chain demand for $DUSK .
Compared to other privacy-focused blockchains, Dusk's differentiating advantage lies in the completeness of its compliance framework. The EURQ stablecoin, launched in collaboration with Quantoz, is the first electronic money token fully compliant with MiCA. This combination of 'compliant assets private settlement' gives Dusk a first-mover advantage in the EU blockchain pilot program. As more financial institutions test on-chain securities settlement in 2025, $DUSK may see a revaluation of its practical value.
$DUSK #Dusk @Dusk_Foundation