What is Walrus: Sui's new decentralized storage protocol aims to revolutionize Web3

By the end of March 2025, the Sui ecosystem welcomed a groundbreaking project in storage—Walrus. What is Walrus? It is an independent decentralized storage protocol created by Mysten Labs (the company behind Sui), aiming to solve complex problems that traditional storage solutions cannot handle.

With a funding scale of $140 million and an initial FDV of $2 billion, Walrus officially launched on leading exchanges such as Upbit, Bybit, and Kraken. On its first day, the WAL token experienced significant volatility, fueling the crypto community’s high expectations for this project’s future.

Walrus and Sui: When Storage Technology Meets High Performance

To understand what Walrus is, we need to look at its relationship with Sui. If Sui is a blockchain platform capable of parallel processing and low-cost transactions, then Walrus is a specialized storage layer built on Sui.

The team behind Walrus has undeniable technical expertise. Most members come from Diem—the former blockchain project of Meta—with extensive experience in building blockchain infrastructure.

A key point is that Walrus is not a separate component of Sui but an independent protocol with its own governance token, WAL. This allows Walrus not only to serve the Sui ecosystem but also to provide storage support for other blockchains, opening broader development potential.

The technical architecture of this integration is very clever: Sui acts as a “coordination hub,” managing the lifecycle of storage nodes and distributing economic rewards, while Walrus focuses on “executing tasks”—cutting, storing, and restoring data. This division of labor enables Walrus to optimize storage functions without needing to build its own blockchain.

Market Gap: Why Decentralized Storage Needs Walrus

Although AWS and Google Cloud dominate the cloud storage market worth trillions of dollars, their centralized architecture carries risks: high costs, single point of failure, and privacy concerns.

Current decentralized storage solutions have attempted to address these issues, but each has limitations:

Filecoin (market cap around $736 million) focuses on static storage but does not support dynamic interactions like real-time updates. Arweave (market cap about $102 million) aims for permanent storage, but data cannot be modified, making it hard to adapt to frequent updates. Celestia (market cap approximately $282 million) specializes in data availability layers but functions more as a “transit station” rather than a complete storage solution.

This is the gap Walrus fills. It not only securely stores data but also makes data “dynamic”—through integration with smart contracts, data can be called, updated in real-time, and even support version management.

Thanks to Sui’s high-performance network, Walrus stands out with fast data retrieval speeds and cost efficiency. Most importantly, its storage costs are only one-fifth of traditional cloud storage solutions.

Technical Advantages Behind Walrus’s Performance

To understand why Walrus performs so well, we need to examine its technical architecture. The core is the RedStuff encryption method—a breakthrough in efficiency.

RedStuff Encryption: “Smart Slicing”

Imagine you want to store a 1GB video on your friends’ computers but don’t want each person to store the entire file. RedStuff acts like a “slicing wizard”—it divides the video into many small parts, then “mixes” them in a special way and distributes them to different friends.

RedStuff’s uniqueness lies in its two-way slicing: it splits data into “main slices” (for storage and reading) and “auxiliary slices” (for backup and recovery). The advantage of this approach is that when a node goes offline, only a small portion of slices from other nodes is needed to reconstruct the full data, avoiding the need to download the entire file.

This method reduces the replication factor by 4-5 times, much lower than the 25-fold replication of traditional solutions.

Simple Computation: Replacing Complex Math with XOR

To save space without complicating calculations, Walrus uses simple XOR operations (similar to addition and subtraction) instead of complex polynomial math. This allows Walrus to handle larger files and support more storage nodes.

Comprehensive Verification Mechanism

In decentralized storage, a major challenge is ensuring nodes actually store data rather than deleting it. Instead of verifying each file individually (which is costly), Walrus employs a “comprehensive verification” mechanism—checking the entire storage node. This approach reduces verification costs from linear growth to logarithmic growth.

How WAL Operates Within the Ecosystem

The WAL token is designed to incentivize community participation and sustainable ecosystem development. Token distribution is as follows: over 60% for the community (including 10% airdrop, 43% community reserves, 10% storage grants), 30% for core contributors, and 7% for investors.

WAL has three main roles in the ecosystem:

1. As the primary payment tool for storage fees—users pay with WAL to store and access data.
2. To incentivize storage nodes—they earn rewards by storing data and responding to requests.
3. As a governance token—holders participate in protocol parameter adjustments, such as pricing models or reward mechanisms.

Practical Applications of Walrus in Web3

Walrus is designed to provide blob (large binary file) storage solutions across various fields:

• NFTs: Decentralized storage for metadata, ensuring integrity without relying on centralized servers.
• AI: Storage for training datasets with dynamic updates and version control.
• DApps: Hosting source code and client-side code to avoid vulnerabilities of traditional web hosting.
• Rollups: Providing data availability layers to reduce storage costs.
• Decentralized Social Networks: Supporting storage of multimedia content like images and videos.

Testnet data shows impressive performance: 14 million accounts, 5 million blobs processed, totaling 27.85 TB of data with an average blob size of 5.57 MB. These figures demonstrate Walrus’s capacity to handle high-frequency data demands.

Conclusion: The Future of Walrus in Web3

What is Walrus if not a decentralized storage solution designed to overcome the limitations of previous projects? From the RedStuff encryption to community-driven ecosystem empowerment, Walrus is certainly a noteworthy addition to the Sui ecosystem.

However, the decentralized storage space is highly competitive, with projects like Filecoin and Arweave still holding significant positions. Walrus needs to continue deploying technology, expanding its ecosystem, and building a strong community to stand out.

With a solid technical foundation and support from the Sui ecosystem, Walrus has the potential to become one of the leading choices for decentralized storage in Web3 in the coming years.