An Emerging Decentralized Storage Solution Revolutionizes Content Storage and Availability

DFG Official
9 min readNov 29, 2023

Why Decentralized Storage Matters for Crypto and Web3

Public layer 1 blockchains such as Bitcoin and Ethereum have long relied on the development of external storage technologies, as blockchains are inherently unsuitable for storing large amounts of data for several reasons:

  • First, the blockchain itself is designed for value transfer, not for storing large volumes of data, and storing data in blocks is very expensive.
  • Second, if large amounts of data are stored in blocks, network congestion will become severe, which will trigger gas wars and thus higher fees when using the network.
  • Finally, even if the blockchain accepts the deposit of large files by expanding its capacity, the data structure on the blockchain determines that most of the block information is stored in encrypted and compressed form, which is not suitable for the retrieval and analysis of file information.

Obviously, these cost and efficiency issues cannot be solved by centralized storage providers whose data is vulnerable to censorship and variability, which goes against the spirit of blockchain and Web3.

Achieving decentralized storage is the only way to truly achieve data authentication and sovereign networks; otherwise, it makes little sense to develop blockchain networks at the expense of centralized efficiency. Therefore, Decentralized Storage Network (DSN) has developed into a mainstream solution, which is a storage business model that uses blockchain as the underlying technology to store files or sets of files in pieces on supply-side-provided storage.

Ideally, a DSN must be able to store, retrieve, and maintain data while ensuring that all actors within the network are incentivized for their contributions while also adhering to the trustless nature of decentralized systems. However, in the actual case, various DSN projects have made their own trade-offs. For example, Filecoin pursues decentralization, but due to the high computational volume of its proof-of-time algorithms and the slow write speed, the storage experience and performance are affected; Storj sacrifices some of its decentralized features while pursuing high performance; and Arweave realizes permanent storage well but also brings higher storage costs as a result and is more suitable for NFT and DApp.


The overall market size of the decentralized storage track has been relatively small, with four head storage protocols (Filecoin, Arweave, Storj, and Sia) generating a total revenue of only about $14.5 million in 2022, according to a report published by Messari; in stark contrast to the current demand for tens of billions of dollars in the cloud storage market. According to a study by Vantage Market Research, the global cloud storage market is expected to grow from $90 billion in 2022 to $330 billion by 2030, with a growth rate (CAGR) of 17.7% between 2023 and 2029.

The adoption of new technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), and automation is driving exponential growth in data creation and storage requirements. Centralized data storage providers are taking huge market share while exposing a plethora of drawbacks to data and market monopolies. The decentralized storage space is in dire need of more game-changing start-ups to join in to drive more data sovereignty-hungry Web3 use cases.

Global Cloud Storage Market Size Forecast/Source: Vantage Market Research

Flostream Network: Decentralized Web3 Infrastructure Service Provider

Flostream Network is bringing change to the decentralized cloud storage market. Flostream is a Web3 decentralized physical infrastructure (DePIN) provider that is building decentralized storage and delivery solutions for Web 3.

The Flostream network not only provides content storage, with Amazon S3 friendly API’s, but it also enables rapid content retrieval, enabling on-demand content delivery and supports apps such as social media or on-demand video streaming with performance indistinguishable from its Web 2 counterparts.

Flostream’s design offers benefits to users or apps in its ecosystem including data persistence, security, and reliability. Any data loaded to Flostream is entirely owned by its users, creating digital property ownership of data. It has a native attestation service, enabling any data loaded to be verified with digital signatures and timestamps. It is the team’s hope that Flostream’s permanent storage with native attestation feature can preserve the integrity of the internet, enabling users to backup their social media profiles, creator content, or copies of the entire internet to the Flostream network, thereby safeguarding truth in the era of deep fakes and AI.

Flostream Storage and Content Availability

Flostream’s founder, David Rhodus, worked at Consensys and developed a number of Ethereum-based POC products for large companies, many of which ended up having scaling issues. David and his team spent a lot of time experimenting with how to connect distributed systems to the blockchain and how to use the blockchain to control those systems.

While in the process of developing an open, decentralized wallet-to-wallet messaging meta-protocol, the team encountered a scaling problem. A large amount of communication generates massive amounts of data, and Flostream Network realized that there were many constraints in existing decentralized storage solutions (IPFS, Filecoin, Crust, etc.), which prompted Flostream to start pursuing its own decentralized storage solution.

Flostream has now launched its own Amazon S3-compatible storage service called Flostream Storage, which has made a number of innovations, from the underlying technology to the storage architecture design, in order to achieve competitive differentiation. By introducing innovative technologies such as a proprietary metadata layer, Flostream Data Transfer Protocol (FDTP), and cutting-edge BLAKE3-based hashing algorithms, Flostream Storage is expected to address the scalability and low performance issues facing the decentralized storage market today.

The storage protocol was developed to optimize content delivery and ultimately intends to be the “content availability” layer for web3, enabling data to be stored, moved, retrieved, and delivered easily.

Technical Overview

The architecture of Flostream Storage consists of multiple cells, each containing a storage cluster and associated control and monitoring infrastructure. These cells deliver S3-compatible storage for customers, ensuring that their data is isolated and secure.

A cell comprises storage nodes and a gateway node, which serves as the entry point for the cell’s storage cluster. Nodes in a cluster function either as storage nodes or gateway nodes. Both types communicate with all other nodes in a cluster, maintain a metadata database, and provide an S3 API endpoint.

Flostream Storage Architecture with storage and getaway nodes/Source: Flostream Docs

Competitive Landscape

Currently, both mainstream centralized storage providers such as AWS and Google Cloud, and decentralized storage providers Filecoin and Arweave have significant shortcomings. The centralized solution, despite its high storage performance, is not cheap, and there is also the possibility of a single point of failure. Decentralized solutions are relatively inexpensive (Arweave is a one-time payment, so it is slightly different), but there are more performance limitations in both storage and throughput, which cannot be applied to large-scale, high-concurrency Web3 application scenarios.

Flostream’s goal is to achieve both the performance benefits of a centralized storage provider while being able to do so inexpensively and with lower network latency than any of the leading decentralized storage projects on the market, in search of a more balanced design. Existing decentralized storage protocols such as IPFS store data on ever-expanding branches of nodes and rely on linear file retrieval methods, which limits scalability and speed.

To address this set of bottlenecks, Flostream Storage employs a proprietary Metadata Layer that enables fast data retrieval and low-cost operation. In addition, Flostream adopts the self-developed and cutting-edge BLAKE3-based Hashing Algorithm for data compression and network management, which is 14 times faster than the SHA-256 currently used by AWS. It also introduces Flostream Data Transfer Protocol (FDTP), a high-performance data transfer protocol that is optimized on top of the UDP. Flostream also employs intelligent data placement and data migration. AI Data Location Migration reduces hotspot deployments, and edge storage capabilities allow data to be processed closer to the data source, resulting in faster access and faster throughput at high loads. Self-invented intelligent de-duplication algorithms then minimize storage redundancy and optimize capacity usage to reduce costs and increase data transfer speeds. Through a series of technical optimizations, Flostream Storage delivers major improvements in several dimensions, as follows:

  • Storage and egress prices are much lower than centralized AWS and Google Cloud, although still slightly higher than decentralized projects such as Filecoin and Storj, they are able to provide superior storage and bandwidth performance at the same cost.
  • Read/write throughput can reach the current level of centralized storage service providers, and in the centralized mode of operation, the throughput will be far greater than the decentralized storage leading projects Filecoin, Arweave, Storj, and so on.
  • It still maintains high scalability and low latency, similar to centralized storage providers.

Flostream currently has several thousand individual users and is running pilots with enterprise companies to shift storage workloads from AWS and Google to Flostream.

Solid and Experienced Team

With extensive experience in blockchain, software engineering, cloud computing, data storage, and project management, Flostream team members are committed to leveraging their skills and resources to deliver the most advanced Web3 solutions in the crypto industry. The founder, David, is a serial entrepreneur with over 25 years of engineering experience. In 2010, he built a streaming platform that supported over 100,000 live sporting events per year, which was eventually acquired by Amazon Web Services, a rare case among Web3 entrepreneurs, and in 2015, he joined Consensys to focus on the development of blockchain solutions for large enterprises.

David’s continuous entrepreneurial background not only provides a strong endorsement for the project but has also attracted the attention of many well-known crypto VCs. Flostream closed a $3 million funding round in February with participation from DFG, Fuse, Scytale, and TRGC. It is one of the few decentralized storage projects that has managed to secure external funding despite the crypto bear market.


At present, most of the cloud storage market share is still monopolized by the centralized solutions provided by Amazon, Google, and other giants, and decentralized storage project products have not shown significant advantages in user experience, performance, cost, and other aspects. These decentralized projects mainly operate by mining, trying to attract users through token incentives, which has led to a massive loss of users after token incentives were reduced in the crypto bear market. Lacking Web3 native application attributes, they are bound to fail to attract more users and businesses in the long run and achieve scale growth.

Although decentralized storage can solve many problems, such as data privacy protection, censorship resistance, and the avoidance of single points of failure, the current development of decentralized systems is still immature, and there are many problems that need to be solved. The decentralized storage industry has not yet reached peak market scale. Leading projects such as Filecoin, Arweave, and Storj’s revenue have yet to compete with centralized storage providers in market size, due to a bear market depression, limited content delivery capabilities, and limited use cases.

As Layer 2 technology matures, DApps are becoming cheaper and faster. The accumulation of massive amounts of data and market demand will once again shift the industry’s focus toward decentralized storage. In the future, the entire DSN market needs more middleware and aggregators to carry more user traffic on the one hand, and on the other hand, it also needs to continuously adjust and optimize the threshold and cost of DSN applications so as to attract more users. Flostream’s Storage and data availability product is an ideal solution that seamlessly combines DApps and decentralized storage at present. As an early investor in Flostream, DFG is excited to see that Flostream Network’s products are bringing more practical application solutions to the broader Web3 market. David is a veteran of the cloud services industry, and the acquisition of his previous startup by AWS has proven his exceptional leadership and creativity. We are confident that David will be able to lead the team to the next level of success and enable Flostream to successfully lead the new wave of innovation in decentralized storage and Web3 applications.

About DFG

Digital Finance Group (DFG) is a global blockchain and cryptocurrency investment firm founded in 2015 with assets under management of over $1 billion. Through a wide range of sectors within the blockchain ecosystem such as Web 3.0, CeFi, DeFi, NFTs, and the Polkadot ecosystem.

Investments include Circle, Ledger, Coinlist, FV Bank, Astar, ChainSafe, and over 100 more. DFG intends to create value, through analytical research, based on the most impactful and promising global blockchain and Web 3.0 projects that will bring a paradigm shift to the world.

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