Decentralised storage aims to remove single points of failure and resist censorship, but achieving this reliably has proven difficult. Many systems either store data directly on-chain—quickly becoming expensive and impractical—or rely on a small set of trusted off-chain providers. Walrus, a new storage network built on the Sui blockchain, proposes a different solution. After reviewing its design documents and public announcements, this piece outlines Walrus’ core ideas in accessible terms.
Why Walrus matters
Early blockchains attempted to store everything on-chain, an approach that does not scale economically or technically. More recent off-chain storage systems reduce costs but often reintroduce trust assumptions by relying on a limited number of operators or centralised services.
Walrus is designed as a censorship-resistant storage layer native to Sui, with reliability as a first-class goal. It combines sliver encoding, cross-coded replication, and Proof-of-Authority (PoA) to ensure that data remains accessible even when multiple storage nodes fail. The network is supported by its native token, WAL, which is used to compensate storage providers, enforce correct behaviour, and govern protocol evolution.
How Walrus stores data
Walrus does not store files as single objects. Instead, it breaks them down and distributes responsibility across many participants.
1. File splitting and sliver encoding
When a file is uploaded, it is divided into segments and further broken into slivers. Additional encoded slivers are then generated by combining the originals. Thanks to this encoding, only a subset of slivers above a defined threshold is needed to reconstruct the full file.
2. Cross-coded replication
Slivers are distributed across multiple shards and storage providers. Some slivers are primary, while others are derived through XOR-based encoding. If a provider goes offline or loses data, the encoded slivers can be used to reconstruct what is missing.
3. On-chain metadata
Information about where slivers are stored and how they map back to the original file is recorded on the Sui blockchain. This allows files to be recovered without relying on any single node or coordinator.
Together, these mechanisms provide strong availability guarantees. Data remains recoverable even if several providers fail, and no single provider ever holds enough information to reconstruct a file independently, improving privacy by design.
Proof-of-Authority and the Sealer network
To ensure long-term accessibility, Walrus uses Proof-of-Authority rather than proof-of-work or proof-of-stake. A rotating committee of trusted nodes, known as Sealers, is responsible for auditing storage providers and maintaining data integrity.
When data is uploaded, Sealers verify that the correct number of slivers has been stored and record this verification on-chain. If a user later requests a file and some slivers are missing, the Sealer network can reconstruct the missing pieces using the encoded backups and restore the file.
This approach provides formal guarantees: once a file is sealed, it can be reconstructed as long as a sufficient subset of providers remains honest. The Sealer committee is selected randomly and changes over time, reducing the risk of coordinated censorship.
WAL token economics and incentives
The WAL token underpins Walrus’ economic model and serves several key functions:
1. Payments and security
Users pay storage providers in WAL. Providers, in turn, stake WAL as collateral to signal reliability. If a provider deletes data or behaves maliciously, part of their stake can be slashed.
2. Governance
WAL holders participate in governance, voting on protocol upgrades and parameter changes that shape the future of the network.
3. Deflationary pressure
WAL is burned when users pay for storage and when providers are penalised. This reduces total supply over time and aligns long-term incentives with network health.
Token distribution
Walrus has a fixed supply of 1 billion WAL tokens, allocated to balance community participation, development, and long-term sustainability:
Community reserve (43%) – Released gradually until March 2033
User distribution (10%) – 4% allocated before mainnet and 6% at launch
Subsidies (10%) – Incentives for users and developers, unlocked over ~50 months
Core contributors (30%) – Allocated to early developers and Mysten Labs, vested over four years with a one-year cliff
Investors (7%) – Unlocked 12 months after mainnet
This structure aims to keep contributors, investors, and users aligned over the long term.
Key design principles compared
Walrus prioritises several technical features that directly support reliable decentralised storage:
Sliver encoding – Enables file recovery even after widespread node failures
Cross-coded replication – Distributes risk across providers using encoded redundancy
Proof-of-Authority – Adds a verifiable auditing layer to storage guarantees
Delegated staking – Ties economic outcomes to provider performance
Engineering effort is focused on these areas rather than maximising throughput or speculative features.
A pragmatic vision for decentralised storage
Walrus aims to be a storage layer optimised for the Sui ecosystem, balancing decentralisation with operational efficiency. Its use of PoA allows data to be sealed quickly and verified deterministically, while its incentive structure rewards uptime and penalises data loss.
Challenges remain. Walrus must attract enough storage providers to ensure redundancy, maintain a robust and diverse Sealer network, and ensure its token economics remain sustainable for early participants. If these conditions are met, Walrus could become a foundational storage layer for Sui—one where data is reliably available, economically secured, and governed by clear incentives rather than trust assumptions.