This modular approach echoes the architecture of the traditional internet. Routing protocols move packets, application protocols structure communication, and cloud providers host data. No one layer monopolizes function. Web3’s evolution toward a federated model suggests a similar maturation. The ambition is not to replace every existing system with a single chain, but to compose a network of networks, each optimized for its domain.

Optimists argue that such specialization is a prerequisite for mainstream-scale decentralized applications. Without it, the cost and latency of on-chain storage would confine Web3 to narrow niches. By contrast, a dedicated storage layer enables media-rich experiences, AI integration, and complex application logic while preserving the verifiability of ownership. It extends the design space without sacrificing core principles.

Cost dynamics are central to this promise. Centralized cloud storage benefits from scale but concentrates power. Decentralized storage disperses control yet must remain economically viable. Incentive models therefore reward node operators for providing capacity and availability, while users pay for storage in ways intended to remain competitive. Achieving equilibrium is delicate. Overcompensation leads to inefficiency; undercompensation risks degraded service.#walrus $WAL