Walrus (WAL): Raised 140 million, a new king of SUI ecosystem storage, will the Token be able to layout after the launch?

Written by: Alvis

Introduction: From Airdrop Frenzy to Value Game

In March 2025, the decentralized storage protocol Walrus (WAL) of the Sui ecosystem emerged with a financing of 140 million USD and a valuation of 2 billion USD. Its token WAL reached a maximum increase of 288% on the first day of trading before falling back to 0.42 USD (as of March 30), sparking intense debate in the market. With the launch of WAL spot and contract trading on Bluefin, the largest DEX platform in the SUI ecosystem, investors cannot help but ask: Is the current price of WAL a short-term bubble or the starting point of long-term value? This article will deeply analyze WAL’s layout logic and potential risks from four dimensions: technological innovation, capital games, economic models, and market expectations.

Technological Revolution: The “Cambrian Explosion” of the Storage Track

The technological breakthrough of Walrus is by no means a simple “Filecoin challenger”; through underlying architectural innovations, it is redefining the cost-performance boundaries of decentralized storage.

Erasure coding technology: cost reduced to 1/80 of traditional solutions

Traditional decentralized storage protocols (such as Filecoin and Arweave) rely on high redundancy backups (with replication factors reaching 25-1000 times) to ensure data security, resulting in high storage costs. Walrus uses Erasure Coding technology to divide data into smaller units (slivers) and distribute them across global nodes, requiring only a 4-5 times replication factor to achieve high data availability. Even if 2/3 of the nodes fail, the system can still recover the complete data through algorithms.

Data Comparison:

Filecoin storage cost: approximately $200/TB/year

Arweave storage cost: approximately $3,500/TB (permanent storage)

Walrus storage cost: approximately $50/TB/year, reduced by 75% compared to Filecoin and decreased by 98.6% compared to Arweave.

This cost advantage brings it closer to the level of centralized cloud services (such as AWS S3), opening up commercial channels for large-scale storage needs such as AI training datasets and high-definition media.

Programmable storage: The “data infrastructure” of the Sui ecosystem

The deep integration of Walrus with the Sui public chain forms its technological moat. By transforming storage objects into programmable assets on the Sui chain, developers can directly invoke smart contracts for dynamic management of stored data. For example, scenarios such as NFT metadata updates and cross-platform reuse of gaming assets can all be seamlessly connected through Walrus.

Case Study: During the testnet phase, Walrus has carried Decrypt Media’s 4K video streaming library and achieved automated revenue sharing of copyrights through smart contracts, improving efficiency by 30 times compared to traditional solutions.

Capital Chess Game: a16z and Sui’s “Ecological Conspiracy”

Behind the explosion of Walrus is the precise coordination between top capital and the public chain ecosystem. Its financing structure and resource integration strategy reveal the deep logic of investment in Web3 infrastructure.

Financing Map: The Strategic Layout Behind $140 Million

Lead Investor: Standard Crypto (managing over $5 billion)

Co-investors: a16z Crypto, Electric Capital, Franklin Templeton, and 12 other institutions 45

Key details: 93% of the financing amount is invested in technology research and development and ecological incentives, far exceeding the industry average level of 60%.

a16z’s investment is particularly noteworthy. As an early investor in Filecoin and Arweave, its significant investment in Walrus aims to build a “full matrix in the storage sector,” while paving the way for the AI + Web3 strategy—Walrus’s low-cost storage capabilities align with the rigid demand for massive amounts of data in AI model training.

Ecological Collaboration: Sui’s “Deflationary Flywheel”

The storage behavior of Walrus directly consumes SUI tokens as gas fees. It is estimated that if the storage capacity reaches 1EB, the annual consumption of SUI will reach 240 million tokens (accounting for 15% of the circulation), forming a positive cycle of “storage demand → SUI deflation → ecological value enhancement”. This design makes Walrus not only an affiliated protocol of Sui but also the core engine of its economic system.

Economic Model: Balancing Community Autonomy and Capital Exit

The distribution mechanism and use cases of the WAL token reflect the ideals of decentralization while also hinting at the complexity of market games.

Token Distribution: 60% community share in a “retail-friendly” design

Total supply: 5 billion coins

Allocation ratio:

Community Airdrop and Reserve: 53% (10% Airdrop + 43% Ecological Incentives)

Core Contributors: 30%

Investor: 7%

Storage Subsidy: 10%

High proportion community allocation is beneficial for ecological cold start, but we must also be wary of the “wool party” occupying the majority of airdrop shares, leading to false prosperity. During the testnet phase, among 13 million interactive addresses, only 12% are associated with real projects, while the rest are mostly traffic-fraud accounts.

Value Capture: Three Major Rigid Demand Scenarios

Storage consumption: Burning 0.1 WAL is required for storing 1GB of data. Based on an estimate of 1 million users per day, the annual consumption could reach 365 million pieces (accounting for 29.2% of the circulating supply).

Node Staking: Storage nodes need to stake WAL to earn rewards, with the current APY around 18%-25%, attracting long-term holding.

Governance Voting: Token holders decide on core parameters such as storage pricing and node access, strengthening the utility of the token.

Market Game: The Crossroads of Short-Term Bubbles and Long-Term Value

Bluefin has launched WAL contract trading and introduced a liquidity competition, bringing both opportunities and amplified volatility risks.

Price Divergence: The “Bull-Bear Showdown” of Valuation Models

Bullish logic:

Benchmarking against Filecoin’s market value of $6 billion, WAL’s valuation of $2 billion has a potential for 3 times growth.

For every 10% increase in storage demand, the amount of token burns will drive the price to rise non-linearly.

Bearish logic:

Current circulating market cap is $520 million, fully diluted market cap (FDV) is $2 billion, which is ten times the institutional cost price, indicating a significant overvaluation bubble.

Only listed on secondary exchanges like Bluefin, the liquidity depth is insufficient to support large capital inflows and outflows.

Liquidity Competition: Bluefin’s “Ecological Leverage”

As the largest DEX in the SUI ecosystem, Bluefin offers exclusive 5x leverage contract trading for WAL and has set up a $25,000 prize pool to incentivize liquidity providers (as of April 10). This design may attract speculative funds in the short term, but caution is needed regarding price crashes triggered by contract liquidations.

Risk Warning: Four Major Potential Crises Not to Be Ignored

Technology landing gap: There is an order of magnitude difference between the test network data (80TB storage capacity) and the main network commercial demand (PB level), and node stability needs to be verified.

Regulatory compliance risks: Decentralized storage may encounter data sovereignty regulations (such as GDPR) and face cross-border regulatory challenges.

Ecological Squeeze: Filecoin is advancing the upgrade of the retrieval market, while Arweave’s permanent storage model remains irreplaceable.

Token Unlock Impact: 7% of investor shares will be released 12 months after the mainnet launch, with a potential selling pressure of approximately 350 million tokens.

Conclusion: Layout strategy and timing selection

For investors with different risk preferences, the following strategies can be referenced:

Short-term traders: Pay attention to the volatility opportunities brought by the Bluefin liquidity competition, and use 5x leverage to capture intraday swings, but set strict stop-losses (for example, exit if it falls below $0.35).

Long-term holders: wait for the price to drop to the institutional cost range (0.15-0.2 USD) to build positions in batches, with the core observation indicators being the growth rate of storage volume and the scale of the developer ecosystem.

Ecological participants: Obtain staking rewards by running storage nodes, with an annualized return rate expected to remain above 15%, while avoiding fluctuations in the secondary market.

The ultimate value of Walrus will depend on whether it can make the leap from a “capital story” to “business implementation” within 12 to 18 months. Under the dual trends of AI data explosion and the iteration of Web3 infrastructure, this storage revolution may just be beginning.