Arweave - $AR, Asset Review
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Arweave has seen a exponential growth in the past years. Arweave has seen miner growth, wallet growth, increased storage on the network and so much more. Blockchains like Solana have incorporated a solution from Arweave. Solana’s founder, Anatoly Yakovenko stated “…we realized that their protocol has some very nice properties, such as censorship-resistance, perpetuity, and decentralization.” Let’s dig in some more.
Content:General Information-What is Arweave
Arweave Background
Arweave Funding/Collaboration
Token Information-Tokenomics
Consensus Mechanism (Proof-Of-Access)
Additional Information-
Network Growth
Technical Analysis
Conclusion
General Information-
1. What is Arweave?
Arweave is a decentralized database that allows users to store data permanently, and sustainably, with a one-time charge. The database is censorship-free and the protocol relies on a consensus called Proof-Of-Access which we will review. Arweave many use cases for and currently has 419 dApps at the time of writing. Use cases vary from but are not limited to decentralized data storage, decentralized data sharing, decentralized data collaboration, and decentralized data identity/protection. Decentralization is the core element of what Arweave plans to thrive on.
2. Arweave Background
Arweave is a project based out of London and founded by Sam Williams and William Jones in 2017. Sam William’s vision entails a future where data is decentralized. As a result, means no central authority may control a user's data. Arweave relies on a network of miners that help build and secure the network. Miners receive $AR tokens in exchange for confirming blocks. It is important to note that Arweave technically isn't a blockchain because it doesn’t create a chain-like system of blocks. Arweave connects each block to, two earlier blocks creating a woven-looking structure hence the name Arweave. Arweave charges are based on the expected cost of storing data for 200 years. Arweave believes that data storage prices lower as the network increases its overall capacity.
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3. Arweave Funding/Collaboration
Arweave has been through a few funding rounds with the following firms: Arrington XRP Capital, Andreeson Horowitz, Coinbase Ventures, Multicoin Capital, 1kx, a16z Crypto, Union Square Ventures, Blockchain Capital, and more raising a total of $22 million dollars according to Messari. Additionally, Arweave has had great integrations throughout the crypto sphere. Blockchains like Polygon, Solana, Avalanche, The Graph, Polkadot, and more have tapped into Arweave for decentralized storage. Arweave also has 419 dApps currently built on the network and growing. One of the popular dApps known as ARdrive a Google Drive Competitor, sells cloud storage. At the time of writing, the cost of storing 1GB through ARdrive is 4.24 USD.
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Token Information-
1. Tokenomics
$AR(Arweave) tokens total supply is 66 million capped tokens with a circulating supply of 33,394,701. 55 million $AR were minted in June 2018 when the Arweave mainnet went live. The remaining 11 million will be minted as block rewards for Arweave miners. $AR tokens are Arweave’s native cryptocurrency coins used to pay network fees including transactions, storing data, sending $AR coins, and retrieving data with applications. At the time of writing, around 57% of the total supply is held by the top 15 wallets.
2. Consensus Mechanism(Proof-Of-Access)
Each blockchain has a consensus mechanism to settle transactions. $AR uses a unique consensus mechanism known as Proof-Of-Access. Proof-Of-Access is an energy-efficient mechanism that uses less mining energy as the blockweave expands in size. The blockweave is unique to $AR’s consensus because its structure is like a blockchain that enables scalable on-chain storage in a cost-effective manner. So, it's the first consensus that will reduce energy consumption and scalability as the network grows.
Additional Information-
Network Growth
Arweave's network has seen growth at an exponential level. Below will be a gallery of photos displaying different metrics that prove usage, interest, and growth in the network. (1)The first chart displays the transaction count which is growing at a rapid rate. Last week, Arweave’s network hit an all-time high in transaction count of 18.6 million. (2)Secondly, we are seeing that users are storing their data on Arweave’s network as it hits an all-time high of 72TB of stored data. (3)Finally, is a photo of the node map showcasing node operators. China has the most nodes(174), followed by the USA(75), and then Germany(41). It's no question the network is being utilized by various entities across the globe.
2. Technical Analysis
$AR has had an incredible run from $1.30 to $90 yielding ~69x returns. Ever since $AR hit all-time-highs, we have seen the price fall towards a high time frame demand zone (the green box labeled “support”) which should act as a support region. Price is likely to consolidate to the green box before making a new move. The way the correction subdivides will give hints on how the next move plays out. Bottom structures typically take a long time to form and reverse when the bears are exhausted, so it's best to stay patient for a clear pattern. All in all, the price action of this chart is very bullish over the long term, and the price staying above the “wick region” will be crucial.
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Conclusion-
While I feel like I barely scratched the surface on Arweave’s network. The growth of the network is a sign of strength. The need for decentralized storage is growing fast on Arweave per “Network Growth.” The biggest concern I have is that Arweave's success is closely correlated with Solana for the time being until other cryptocurrencies adopt similar storage services to offset it. However, it is incredible to have a one-time fee for web storage. Not only is it one time, but most likely the next time I need web storage it will be cheaper because the network is growing. As I mentioned earlier, the price of storage will continue dropping as time progresses per figure C. The Blockweave is brilliant and I feel extremely bullish on what the network will deliver. Lastly, it is important to note that I believe the network will grow but isn’t correlated to the value of the $AR token.