Every time you save a photo, send an email, or stream a video, that data is stored somewhere. Right now, that “somewhere” is almost certainly a massive, centralized server farm owned by one of a handful of tech giants like Amazon, Google, or Microsoft. This quiet oligopoly over the world’s data is one of the most powerful forces in the modern economy. But a new paradigm is emerging, one that promises a more open, resilient, and user-owned internet: decentralized file storage.
Building an investment thesis for this foundational layer of Web3 requires thinking about the different ways one can participate in a new digital economy. It can be an active, operational role, or a long-term, thesis-driven investment in a core asset. To illustrate this, we’ll use a powerful case study from a different layer of the Web3 stack—the transaction layer. By first taking a deep dive into how to earn revenue by operating an MEV-Boost relay, we can establish a clear picture of an active infrastructure play. This will provide a fascinating contrast to the long-term, passive investment thesis for the future of data.
The Active Infrastructure Play: How to Earn Revenue by Operating an MEV-Boost Relay
To understand the different types of Web3 investments, let’s start with a hands-on, operational one. At the base layer of Ethereum, a constant and complex process of transaction ordering takes place. The profit that can be made from intelligently ordering these transactions is called Maximum Extractable Value (MEV).
A Business Built on Network Plumbing
MEV extraction is a highly specialized field. “Builders” use powerful computers to construct the most profitable blocks, and “validators” propose these blocks to the network. The MEV-Boost relay is the critical piece of plumbing that connects them, acting as a trusted, high-speed auctioneer.
The business model here is not about holding an asset and waiting for it to appreciate. The core of understanding how to earn revenue by operating an MEV-Boost relay is that it’s an active business. You are providing a service. Your revenue comes from charging builders a small fee for reliably connecting them to validators. Success depends on technical excellence: 99.99% uptime, low latency, and a stellar reputation for security and neutrality. This is a cash-flow-generating business for skilled operators, a way to invest in the network’s core functionality through active participation.
The Long-Term Play: The Investment Thesis for Decentralized Storage
Now, let’s zoom out from the active, second-by-second operation of the transaction layer to the passive, decade-by-decade vision of the storage layer. Decentralized storage networks like Filecoin, Arweave, and Storj are not about active operational income in the same way; they represent a long-term, fundamental bet on the future of data itself.
The Problem with the Cloud Giants
The investment thesis begins with the flaws of the current system.
- Centralization & Censorship: When a handful of companies control the world’s data, they become single points of failure and control. They can de-platform users, censor content, and be subject to government subpoenas.
- High Costs & Exit Barriers: The lack of competition allows cloud providers to charge high prices, and their complex systems make it difficult for customers to switch providers, creating a powerful “moat” that stifles innovation.
- Data Permanence: Data stored in the cloud is ephemeral. If you stop paying your bill, it’s gone forever. There is no easy way to pay once and ensure a piece of data is preserved for future generations.
Pillars of the Investment Thesis: Contrasting with the MEV-Boost Relay Model
The value proposition of decentralized storage rests on several powerful pillars that stand in contrast to the active, service-based model of a relay operator.
Pillar 1: Unstoppable, Permanent Data (The “Permaweb”)
This is perhaps the most profound innovation, best exemplified by Arweave. The Arweave network is designed to store data forever. Users pay a single, upfront fee to have their data stored in perpetuity, preserved by a network of miners who are incentivized by an endowment and ongoing fees.
This creates a new paradigm: the “permaweb.” It’s a permanent archive for humanity’s most important information—historical records, scientific data, cultural works, and, most pressingly today, NFTs. For an NFT to have true, lasting value, the underlying image or media file must be stored permanently. Storing it on a private server is a recipe for disaster. This unique value proposition for permanent, verifiable storage is a cornerstone of the long-term investment thesis.
Pillar 2: A Trustless, Verifiable Market
How do you know a centralized provider is actually storing all your files and not just pretending to? You don’t; you trust them. Decentralized networks replace this trust with mathematical proof.
Filecoin, for example, uses powerful cryptographic proofs like Proof-of-Replication and Proof-of-Spacetime. These proofs force storage providers to prove to the network, on a continuous basis, that they are storing the exact data they were paid to store. This creates a truly trustless, open, and verifiable marketplace for data storage. It’s a fundamental shift from brand-based trust to mathematical certainty.
Pillar 3: Disruptive and Transparent Economics
The economics of an open marketplace are fundamentally different from those of an oligopoly. By allowing anyone in the world to contribute their unused hard drive space, decentralized networks create a hyper-competitive market that can drive down storage costs over the long term.
The economic model here is not about earning micro-fees for a fast process, which is the core of how to earn revenue by operating an MEV-Boost relay. Instead, the investment thesis is based on the appreciating value of the network’s native token, which is required to pay for storage and to incentivize providers. As demand for censorship-resistant, permanent, and verifiable storage grows, the demand for the network’s token should grow with it.
Risks and Catalysts
No investment thesis is complete without acknowledging the risks. The user experience for decentralized storage is still more complex than the one-click simplicity of Dropbox or Google Drive. Scalability is an ongoing challenge, and these networks face immense competition from the deeply entrenched cloud giants.
However, the catalysts are arguably more powerful. The explosion of data from AI and machine learning, the metaverse, and scientific research is creating an insatiable demand for storage. The growth of NFTs and the need for permanent metadata storage provide a native Web3 use case. Finally, a growing global awareness of censorship and data sovereignty is driving users and developers to seek out more resilient alternatives.
Conclusion: Investing in the Fabric of Web3
Investing in the foundational infrastructure of Web3 isn’t a monolithic activity. It offers a spectrum of opportunities, from highly active, technical operations to long-term, passive investments.
At one end, you have opportunities like learning how to earn revenue by operating an MEV-Boost relay—an active business for skilled operators who want to earn cash flow by providing a critical service to the network’s transaction layer. At the other end, you have the long-term investment thesis for decentralized file storage—a bet on the appreciating value of a fundamental, irreplaceable piece of the Web3 stack.
Both are essential. The “plumbing” of the transaction layer and the “hard drive” of the storage layer are vital for the growth of a truly decentralized internet. Understanding the different economic models and investment profiles for each is key to thoughtfully participating in this new digital frontier.
Engaging FAQ Section
Curious about the future of your data? Let’s break it down.
Q1: What is decentralized file storage in simple terms? A: Instead of storing your files on a single company’s servers (like Google or Amazon), decentralized storage splits your files up, encrypts the pieces, and spreads them across a global network of computers run by individuals and organizations. Think of it like a peer-to-peer Airbnb for hard drive space, making your data more secure, private, and resistant to censorship.
Q2: How is Arweave different from Filecoin? A: The main difference is their mission. Filecoin aims to be a hyper-competitive, decentralized market for ongoing data storage and retrieval—a direct competitor to Amazon S3. Arweave is focused on providing permanent storage. You pay once, and your data is stored forever, making it ideal for archiving, NFTs, and creating a “permaweb.”
Q3: Is investing in the network tokens the only way to get exposure? A: It’s the most direct way for most investors. By buying tokens like FIL (Filecoin) or AR (Arweave), you are betting on the future demand for that network’s storage services. A more active approach is to become a storage provider yourself, which involves running specialized hardware and earning tokens for providing storage to the network.
Q4: What’s the connection between the long-term thesis for storage and how to earn revenue by operating an MEV-Boost relay? A: The connection is that they are both forms of investing in Web3 infrastructure, but with different models. Operating a relay is an active business that generates cash flow from a service at the transaction layer. Investing in decentralized storage tokens is a long-term investment in the value of the foundational storage layer. One is about active operational income; the other is about long-term asset appreciation.
Q5: What are the biggest risks to this investment thesis? A: The biggest risks are usability (it’s still harder to use than traditional cloud services), scalability (can these networks handle a massive influx of data efficiently?), and competition. The established cloud giants are incredibly well-funded and have massive network effects, making them very difficult to disrupt.
