For a while, my Twitter timeline was full of people trying to get verified for Kyve's incentivized testnet. Looking into NEAR these days, I noticed that they entered a partnership with NEAR, so I figured it's worth covering them for my series on ecosystem players.
Kyve started in early 2021 and has since integrated with many leading blockchains, such as Ethereum, Solana, and BNB, and of course, is working with NEAR. The team is building the most efficient middleware for blockchain networks focusing on data retrieval.
Blockchains getting too big.
You might never have spent much thought on it, but a major challenge with blockchain's nature is that the entire transaction history is stored on every full node forever. In the beginning, retrieving that data wasn't much of a problem. Yet a couple of years into the existence of blockchains, we already see that play out.
The Bitcoin blockchain is now over 300 GB big. Every time a new node joins the network, it has to sync with the entire chain. That means it takes days to sync when trying to set up a lightning node. And the problem is just set to get worse. Synching threatens to become a multi-year endeavor.
Another challenge is recovering data streams with elements related through computation as they have to be retrieved step by step.
How Kyve addresses the data retrieval issues
Kyve is building a fully decentralized archival framework that generalizes the process of data retrieval. It compacts any configurable data streams into readily retrievable snapshots. All snapshots are stored on Arweave for permanent backups ensuring longevity.
Arweave is an innovative data storage platform based on a derivative of blockchain technology that incentivizes the storage of data for eternity.
The network is made up of two main components:
- An autonomous governance system that handles any breaches of contracts and
- Computational layer that allows participants to run customized nodes. For performing tasks such as validating, standardizing, and archiving streams, node operators are rewarded in the native token $KYVE.
Another important part of Kyve are so-called pools. These aren't the pools you might know from liquidity mining but discrete entities arranged around specific data sources. They can be created by anyone and configured to fetch certain data.
Each pool takes the form of a DAO powered by the smart contracting language of Arweave, SmartWeave. One uploader in each pool is responsible for fetching data from the source, executing instructions, and writing the data to arweave. It's kept in check by the validators who run tests against the uploader. If an uploader is found to be violating the rules, their stake will be slashed, and a new validator will be selected to take their place.
Tokenomics
The native token $KYVE is used for:
- Governance: users can create proposals, vote on them, and control through voting how the funds in the Kyve treasury are used
- Funding: to start a storage pool, kyve has to be deposited. It can be provided by anyone and is paid out to nodes in the pool to incentivize them to contribute. Once funds in a pool run out, data retrieval is held.
- Staking: nodes can stake Kyve
- Delegation: stake but without running a node oneself.
Kyve x NEAR
Kyve has partnered with NEAR enabling developers to utilize Kyve to store and verify data streams when building on NEAR. Kyve bridges data from NEAR, takes a snapshot of the entire chain, and stores it on Arweave, including blocks and transactions.
Kyve addresses a problem in the space that few even think about retrieving data and synching with a chain. Through the use of pools and validators, the network ensures the integrity of data and, as a multi-chain product, enables users to access data from various chains in one place — an overall better UX.
The incentivized testnet — which was why I had a lot of kyve tweets in my TL earlier this year — was completed successfully, pushing Kyve closer to their mainnet launch scheduled in Q4 2022.
