Lately, block chain has emerged as the core technology powering a wide range of Decentralized Applications (DApps) in cryptocurrency, Decentralized Finance (DeFi), NFTetc
DApps require robust means to store data and manage user identity, access and key management with confidentiality.
Providing a full stack to help DApp developers meet these requirements and build secure, privacy-preserving apps isNetwork, a Bengaluru-based blockchain startup founded in 2019 through Mayur Relekar, Aravindh Kumar and Abhishek Chaudhary.
“To realize what you could do with Arcana, you would have to put together three or four different protocols, such as Filecoin or IPFS for decentralized storage, others for key management, authentication, etc. This would create a Frankenstein monster in your code base. With Arcana, we want applications to come to us and delegate their entire data layer,” Mayur says in a video interaction with BlockchainHistory.
Arcana has built a storage and privacy stack for Ethereum DApps and works with crypto, NFT, DeFi, and more developers. In fact, it also works with Web 2 (non-decentralized) products in fintech, healthcare, SaaS, etc. to provide privacy and data security.
Need for decentralized storage
In the Web 2 world, data is stored and managed by discrete service providers who typically own and operate data centers and servers. Amazon Web Services (AWS) is one of the most popular examples.
Decentralized storage, however, is not managed by a single vendor. Instead of, multiple people, users, or nodes participate in the network. Assets uploaded to a decentralized network like Arcana’s are encrypted, split, and distributed across multiple storage nodes.
Aravindh explains, “Such a network can have participants of different sizes, ranging from individuals to smaller data centers with excess capacity. The mathematics and cryptography of the network protocol ensures that everyone does what they are supposed to do and is compensated fairly.
The founders also list several advantages of decentralized storage over centralized networks. An advantage is its intrinsic anti-monopoly propertieswhich prevents a leading central player from controlling the prices and features of the offer.
“On the consumer side, a decentralized network allows participants to make network policy decisions on the platform, not the entity that owns or builds it,” adds Aravindh.
Additionally, with no single point of failure, assets in a decentralized storage layer are protected against downtime, shutdowns, geo-specific disasters, hacking attempts, etc.
According to Mayur, such decentralized networks can achieve economies of scale beyond those realized by centralized data networks.
“There are billions of people with a powerful computer in their pocket; almost all of them are connected to the Internet and can provide bandwidth. This capacity can be leveraged in decentralized storage networks that even large enterprises cannot match,” he explains.
“Let’s say I’m downloading a file. The file goes and sits on the 10 closest smartphones or devices on the network. Downloads are much faster. When I want to fetch the asset, it comes from those 10 nearby devices, which also speeds up downloads.
In addition to decentralized storage, privacy and security services related to identity, access management and key management also play a vital role in the Arcana stack.
Indeed, Arcana aims to provide developer-friendly tools and services that are based on privacy design principles, and that enable developers to ensure privacy from the design of the product. This eliminates the need for quilting at a later stage, according to Aravindh.
He adds, “IPFS is a competitor to decentralized storage, but the biggest issue to consider is how data moves between people. With Arcana, you can also perform chain access management without using servers. Plus, access policies are stored with the data itself, so you can use a truly decentralized network without touching anything else.
For example, Arcana can allow NFT marketplaces to ensure that NFT ownership or access is set in the digital asset itself, instead of pointing to a link stored on another network.
“We are much more transparent than anyone, since we log everything on the public blockchain and our code is open source. It’s not something a central player will match,” Mayur asserts.
Developers pay Arcana a fixed costs depending on the usage, and the amount can be paid in stablecoin or in USD (through maps). The founders believe that having both options makes Arcana Web 2 and Web 3 user-friendly and makes life easier for developers.
Arcana’s future plans
Going forward, Arcana aims to become a data layer for applicationsalmost like a public goods project for data where the network could eventually be run as a Decentralized Autonomous Organization (DAO).
“We have launched our alpha testnet. Our beta testnet is coming soon, followed by our mainnet launch later this yearAravindh says.
Mayur adds that the startup eventually wants to work on data management to query and process encrypted data, but that requires a larger and more robust Web 3 ecosystem to achieve this.
To realize its projects, Arcana raised in October 2021 $2.3 million from Crypto Republic and Woodstock Fundas well as the participation of Digital Currency Group (DCG), Hyperedge, shl.vc of Sahil Lavingia, Fenbushi Capital, LD Capital and Paradigm Shift VC.
It also saw the participation of Ganesh Swami, CEO of Covalent; Ajeet Khurana, tribe of builders; Nischal Shetty of WazirX; and Ajit Tripathi of Aave, as well as Arcana seed investors AU21 and Arcanum Capital.
In July 2021, he raised a funding round of $375,000 investors Balaji Srinivasanformer CTO of Coinbase; Sandeep Nailwal and JD KananiCo-founders of Polygon (formerly Matic); Kendrick Nguyen, Founder and CEO of Republic; and other great angels of the crypto ecosystem.