Covalent and long-term data availability: the Ethereum Wayback Machine
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Explains the modular stack and why EIP-4844 blobs, pruned after 18 days, leave a long-term data availability gap that Covalent's Ethereum Wayback Machine fills with Block Specimens. Argues Covalent at a $0.2B FDV is undervalued relative to short-term DA peers worth billions.
Key claims
EIP-4844 blobs are pruned after 18 days
Covalent EWM supports 6 of the top 10 blob-using L2s, combining about $5.4B TVL
Covalent trades at $0.2B FDV
Modularity and AI are multi-billion $$$ narratives
While the leaders in these sectors are all unicorns already, one overlooked gem is sitting at a mere $0.2B FDV
Meet @Covalent_HQ: Long-term DA for rollups & verifiable data for AI
Alpha-🧵 t.co/1st2vaE5m5
1/ Modularity reshapes the way we think and build blockchains.
It strips apart the core functions of a blockchain into distinct functional infrastructure components.
These are application-specific & optimized to serve only a very specific purpose.
2/ By piecing together modular infrastructure building blocks, we can build highly scalable, decentralized networks.
These can be customized on every level of the tech stack and many for them are optimized for specific verticals or use cases.
3/ So let's have a quick look at a simplified breakdown of the modular stack:
✦ Execution
✦ Settlement
✦ Consensus
✦ Short-term DA
✦ Long-term DA
In monolithic networks (e.g. Ethereum or Solana), the core functions are all unified in one layer (the monolith).
4/ The pioneer of the modular narrative was @CelestiaOrg, the first modular DA layer to market.
Celestia makes data space for rollups to post their data to abundant.
It can thereby significantly reduce the tx cost on L2s that depend on an underlying L1 to publish their data to.
5/ Why does this matter?
Rollups need a lot of data.
Pre-EIP4844 the primary data option for rollups was calldata on Ethereum L1.
Unfortunately, this type of data is very expensive (16 gas per byte), which limited rollup scalability.
x.com/zerokn0wledge_/status/1661794274206445569
6/ At least though, the data was stored immutably forever on Ethereum and available from the moment posted until eternity.
With EIP-4844, this changed, leading to a separation of the concepts of data availability and data storage (short term vs long term) on Ethereum.
7/ Let me explain.
EIP-4844 partially fixes the cost issue of data publication and provides an interim solution that implements a new tx format.
This tx format will be used in danksharding down the road, which is the long term solution to improve Ethereum's DA capacity.
8/ EIP-4844 implements this so called blob-carrying tx type without actually implementing any sharding on the validator set.
Instead, data blobs (Binary Large OBjectS) are simply part of the beacon chain and carefully downloaded by all consensus nodes.
9/ However, to prevent state bloat issues, these blobs are pruned off the nodes' storage after 18 days, only providing short term data availability.
With rollups & EIP-4844, Ethereum effectively shifts the responsibility of providing historical data records away from itself.
10/ The same holds true for short term DA layers like @CelestiaOrg that are optimized for making block space available for data publication & ensure enduser verifiability.
11/ But how do we solve long-term data availability, a.k.a. data storage while maintaining decentralization and immutability if the storage on all these other layers is only temporary?
Meet @Covalent_HQ.
12/ @Covalent_HQ empowers anyone to build a full canonical representation of a blockchain, host a database with a standardized schema, or query the Unified Covalent API.
13/ This is a powerful offering in the age of AI.
@Covalent_HQ enables AI apps with structured & verifiable data, which enhances the depth of functionality for the underlying models.
While this is a billion $$$ market in itself, we will focus on long-term DA for rollups today.
14/ So let's get back to rollups.
As part of this mission, @Covalent_HQ is building the Ethereum Wayback Machine (EWM).
The answer to the long-term DA challenge.
15/ The EWM is an open-source solution that empowers anyone to access enriched & cryptographically secure historical data without ancentralized, rent-seeking intermediary.
16/ It asynchronously exports data from chain clients to produce a canonical storage format (Block Specimen) that facilitates re-execution & enrichment outside of nodes (by Block Result Producers).
17/ In stark contrast to DA layers like @CelestiaOrg or @eigen_da, @Covalent_HQ with the Ethereum Wayback Machine focuses exclusively on long-term data availability.
It looks to maintain long-term accessibility & availability of historical blockchain data.
18/ At the core of the EWM stands data verifiability through cryptographic proofs.
For every piece of work completed on the Covalent Network, a proof is created and posted to the proof chain, ensuring that operators behave honestly & provide accurate data.
19/ What @Covalent_HQ does with the EWM, is essentially decoupling data storage from the base layer entirely via the before-mentioned Block Specimens.
These are the canonical data storage format that represents the blockchain state of connected networks.
20/ Further downstream, enrichment of blockchain data like tracing and execution can be (re-)run on these Block Specimens by Block Results Producers without the need of running a resource-heavy node.
This allows for powerful queries / RPC calls from the end user or app side.
21/ The EWM overall enables a broad spectrum of modular configurations in which short-term DA solutions like @CelestiaOrg or Ethereum post-EIP4844 and @Covalent_HQ's long-term storage can be combined (see visual below).
22/ That ties in with the modular stack overview from earlier:
✦ Execution (e.g. @arbitrum or @Optimism)
✦ Settlement (e.g. Ethereum)
✦ Consensus (e.g. Ethereum or @CelestiaOrg)
✦ Short-term DA (e.g. @eigen_da or @CelestiaOrg)
✦ Long-term DA (e.g. @Covalent_HQ)
23/ The @Covalent_HQ EWM already supports 6 of the top 10 L2 projects that utilize blob storage for their DA needs, affirming its crucial role in enhancing data access across these networks.
This includes @arbitrum, @Optimism, @base, @LineaBuild and @starknet.
Data from @l2beat
24/ These L2 platforms alone combine approximately $5.4 billion in TVL and are leading users of @Covalent_HQ's Ethereum Wayback Machine which controls and outputs long term blob data.
25/ Unlike temporary solutions that only address short-term DA needs, @Covalent_HQ's Ethereum Wayback Machine offers a perpetual access point to this data.
This overcomes the 18-day availability limit of Ethereum’s blobs and establishes a new benchmark for data permanence.
26/ So if the market values short-term DA solutions in the billions, I would expect the leading long-term DA players to reach similar spheres once people understand the role of these protocols within the modular stack.
Study @Covalent_HQ at $0.2B FDV and DYOR anon (NFA).
That's a wrap. I hope you've found this thread helpful! 🫡
Make sure to follow me @zerokn0wledge_ and @Covalent_HQ to stay up to date with the leading long-term DA layer!
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