Project Overview

On-chain data analysis plays a crucial role in the cryptocurrency market, providing users with deep insights into market dynamics. It is also a key tool for optimizing trading strategies and fostering technological innovation. While on-chain data is publicly accessible, the diverse structures and formats hinder the ability to meet real-time, cost-effective, and flexible analysis demands. This is where on-chain data analysis tools come into play. Shadow focuses on infrastructure projects, providing solutions for projects, developers, and professional data analysts.

Source: shadow.xyz

Founded in 2022, Shadow’s co-founder and CEO, Alvin Hsia, is a graduate of UCLA, and co-founder and CTO, Emily Hsia, is a graduate of Columbia University. Both have previously worked at Goldfich and Airbnb. Shadow is a developer platform allowing users to control on-chain event data on any contract. The core of the protocol is the shadow fork feature. The team has stated that they currently support deployment on the Ethereum mainnet, Arbitrum, Optimism, and Base networks, with plans to support more networks.

Funding Situation

Shadow Protocol aims to simplify and reduce the time and cost of on-chain data indexing and analysis. Founded in 2022, Shadow announced on X on December 5, 2023, that it had secured $9 million in seed funding led by top venture capital firm Paradigm. Other notable investors included Coinbase Ventures, Electric Capital, the Ethereum Foundation, Uniswap, and Flashbots.

Shadow Fork

At the heart of Shadow Protocol is the shadow fork feature. A shadow fork is a copied, branched version of on-chain data. Within this branched version, developers can freely analyze and modify data, providing a simulated environment for experimentation. This concept is analogous to forking a repository on GitHub or creating a perfect simulated environment in the real world. Users can freely add or modify a smart contract’s event logs within this virtual environment without incurring high gas fees. Using Shadow Protocol is straightforward; developers can create and test new event logs and smart contracts within their shadow forks with just a few lines of code.

Source: docs.shadow.xyz

Product Use Cases

Shadow Protocol is primarily designed for blockchain developers, data analysts, and researchers. It enables them to access on-chain data more efficiently and at a lower cost. The official documentation provides four primary use cases for Shadow Protocol:

1. Gas Savings: By placing event logs on a shadow fork instead of the mainnet, contracts can be significantly optimized to meet various data requirements.
2. Enhanced Cross-Protocol Analysis: Shadow allows users to customize events for any contract. Even if events are missing or incomplete on the mainnet, users can directly access mainnet state data for subsequent analysis.
3. Building Faster Indexers: Shadow emits data-rich shadow events, reducing RPC calls, tracking, and complex data merging and accelerating the data indexing process.
4. Complete Log Recording: Shadow allows users to emit private logs in any contract to monitor, test, debug, and analyze contract execution on the actual mainnet.

Source: shadow.xyz

Conclusion

With the growth of blockchain technology, there is an increasing demand for efficient and cost-effective on-chain data analysis as more users, organizations, and capital enter the market. Infrastructure projects have become indispensable in the cryptocurrency market. Shadow enables developers to customize on-chain data with just a few lines of code through its shadow fork feature, providing developers with a more efficient and cost-effective way to handle on-chain data. As Web3 continues to evolve, the protocol will face even greater challenges.