Why Irys Can Offer Onchain Data at Cost (and Still Win)

Long term, all blockchains generate revenue from fee markets. That's inevitable.

Whats incredible about them is no middleman inflating those fees to extract value. If there's available capacity, the protocol provides its utility at cost. This is one of the core differentiators between Web3 and Web2.

So how do blockchains keep node operators around and economically incentivized when margins are razor-thin?

Most protocols start with inflation. A portion of the token supply is set aside and released to miners or validators as blocks are produced. It works early on but can't last. Inflation dilutes holders, weakens investor interest, and leads to users only buying tokens to cover immediate needs.

That's where fee markets matter. As inflation tapers off, protocols face a turning point: they either build sustainable fee generating usage or fade.

✧ Bitcoin relies on transaction fees. ✧ Ethereum uses gas and blob gas. ✧ Solana focuses on localized fee markets.

But none of this works without real demand. If users won't pay, the protocol can't sustain itself.

Datachains face an even tougher challenge. They have to pay not just for processing transactions, but also for storage and long-term data availability.

Arweave sets a flat fee to store data. That rate doesn't increase with demand. As a result the protocol must price storage well above cost to ensure miners get paid. But this opens the door for others, like @irys_xyz, to compete on price.

Filecoin tried to create a two-sided storage market but onboarded far more supply than demand. That imbalance created a buyer's market, driving fees down and making the protocol economically unstable.

Walrus, built on Sui, takes a hybrid approach. It uses SUI smart contracts to coordinate a network of storage providers (making it more of a storage network or L2 than a datachain). There's a two-token model: WAL for storage and SUI for execution. If programmable data is used, the execution fees go to Sui not ****Walrus. Like Arweave, Walrus must charge above-cost for storage to stay solvent and reward node operators with WAL. But that also limits how competitive it can be on price.

Irys's design aims to price storage around the resources needed to maintain it, with execution and planned Programmable Data access forming additional parts of the economic model.

Without long-term fee market design, protocols collapse when inflation ends.

Irys's model brings several forms of network activity together. Storage and execution form the foundation, while the planned Programmable Data interface would add native access to stored bytes.

That future capability would add another source of usage fees as applications begin using it.