About Lava Network

Lava Network is a modular blockchain network equipped with a full Cosmos SDK. It aims to create a decentralized infrastructure for RPC and API customization, enhancing the scalability of access to various networks, including over 30 networks like Ethereum, Polygon, and Solana.

Lava Network can seamlessly integrate any RPC (Remote Procedure Call) and API. Each mainnet requires RPC nodes, and if these nodes fail, the network of that chain can collapse. Essentially, Lava is a network of node providers, offering developers data and RPC access services. Developers can use Lava to connect to over 30 blockchains, such as Ethereum, StarkNet, Polygon, Arbitrum, Cosmos Hub, Osmosis, Juno, Evmos, Axelar, NEAR, and Celo. Lava Network’s vision is to make blockchain data as decentralized, universally accessible, and consistently available as possible.

Project Background

Lava Network was established in 2022 by Yair Cleper and Gil Binder, both seasoned entrepreneurs from Israel with extensive experience in the web2 industry. Yair Cleper, the co-founder and CEO, is also a co-founder of Supersmart.me and Octopa, and an investor in CodiumAI.

In February 2024, Lava Network secured $15 million in seed funding, led by HashKey Capital, Jump Capital, and Tribe Capital, with contributions from Alliance DAO, MH Ventures, Protocol Labs, StarkWare, Finality Capital Partners, North Island Ventures, Keplr, and Kahuna Ventures. This round also received support from executives of projects like Celestia, Cosmos, StarkWare, and Filecoin.

In May 2024, Lava Network raised an additional $11 million, with investments from Animoca Brands, CoinGecko Ventures, Gate Ventures, Sandeep Nailwal, Ash Crypto, CryptoLark, and Crypto Times Japan. Lava Network’s current valuation is $1.5 billion.

Lava Network Key Components

To create an infrastructure that allows developers and users to send and retrieve data from any blockchain, an access layer must provide an interface for interaction with Rollups. Lava acts as the universal data access layer between blockchains and Rollups.

Source: lavanet.xyz

Lava Network’s key architectural components include:

1. Data Consumers: These are users or projects that access blockchain data through Lava Network.
2. Peer-to-Peer RPC and API Relay (Off-Chain): This component facilitates the interaction between data consumers and data provider nodes.
3. API Relay: A system for making API calls from one point to another, operating off-chain, which means it runs within the Lava Network’s infrastructure rather than on the blockchain itself.
4. Data Provider Nodes: These nodes or services supply the data consumers request.
5. JSON Format Module: Defines the services that data service nodes can provide, such as Ethereum RPC.
6. Lava Protocol: The core protocol of Lava Network, outlining how all components interact, the standards they adhere to, and the rules governing the network.

Lava Operation Process

Champions (technical contributors) can add popular APIs and blockchain networks as modules to Lava without permission. Node operators join Lava to offer services for these modules, referred to as “specifications.” Developers create applications that use Lava as their backend. Wallet users and Dapp developers utilize endpoints powered by Lava to perform transactions and load data into their wallets.

Source: lavanet.xyz

1. Receive Pairing List: Consumers receive a list of top providers ranked by their stake and service quality. This list remains fixed for multiple blocks, known as an epoch. An epoch is a set of consecutive blocks during which consumers use this pairing list.
2. Establish Connection: Consumers establish a peer-to-peer connection with the top-ranked provider in the pairing list.
3. Data Exchange: Consumers send and receive data through this connection.
4. Reward Distribution: After the epoch ends, providers accumulate computational units. At the end of the month, they receive their share of rewards based on subscription costs.

Advantages of Lava Network

Peer-to-Peer SDK: Lava Network enables developers to create DApps that communicate directly with multiple providers or other users, bypassing centralized platforms or servers. This direct peer-to-peer communication boosts application efficiency and security while reducing the risk of single points of failure. Lava Network already supports over 300 providers. The P2P SDK allows DApps to flexibly manage user communication and interactions, fostering a fair and transparent reward system.

High Performance and Low Latency: Lava optimizes each blockchain by selecting the best pairings from numerous providers, maximizing availability. Additionally, Lava has a penalty system to ensure data accuracy. Lava facilitates peer-to-peer and off-chain data exchange by separating relay and settlement, significantly reducing latency and ensuring quick, efficient data transmission.

Privacy Protection: RPC requests are randomly distributed among a rotating list of providers, ensuring that consumers do not receive services from the same provider for an extended period. This guarantees direct communication between consumers and providers.

Scalability: Lava’s modular infrastructure can support any blockchain API and RPC. Every component of Lava is designed with scalability in mind. Features like the single-step reward system, aggregation, direct provider-DApp communication, and staking incentives improve efficiency by reducing unnecessary network stress.

Open Source: Lava is dedicated to open source and modularity. Developers can review the chain’s code and any implemented specifications.

LAVA Token Economic Model

According to the official roadmap, Lava Network plans to launch its mainnet and the LAVA token in the first half of 2024. The total supply of LAVA tokens is set at 1 billion. Lava will use a built-in burn mechanism and a buyback mechanism to manage token deflation. The distribution of tokens is as follows:

• 15% for future incentive programs (e.g., airdrops)
• 6.6% for monthly provider rewards (Provider Drops)
• 3.4% for validator rewards
• 31% for research and development and ecosystem growth
• 17% for early investors
• 27% for early contributors, the core team, advisors, etc.

Additionally, as the percentage of LAVA staked increases, validator rewards will decrease linearly between 60% and 80%. At 80% staking, rewards and subscription fees will be burned to control token inflation.

Source: lavanet.xyz

$Lava Holder Benefits

Users can stake their tokens with validators to earn returns and re-stake with providers to maximize capital efficiency. Token holders can also participate in on-chain governance, influencing API specifications and subscription service pricing. Participants in creating, developing, and maintaining RPC and API specifications and software can receive token rewards.

Magma Points Rewards

The official Lava points system for airdrops is live, rewarding users who stimulate the RPC pool. Points distribution is determined by each network. Users can earn points through the following activities:

• Wallet users can earn points by changing their wallet’s RPC. Replace the RPC URL in your wallet with Lava’s official URL for NEAR, Starknet, Evmos, Axelar, or Ethereum to earn points.
• Conduct transactions or query funds using wallets and Dapps as usual to earn points.
• Check the leaderboard and monitor your ranking to earn points.
• Share your referral code on social media to earn points.

Summary

The Lava Network project is well-funded and backed by a large, experienced team. It connects multiple networks, including Ethereum, Polygon, and Solana. The demand for RPC nodes is critical and perfectly matches market needs. Already, hundreds of node providers from various ecosystems have joined Lava Network. Moreover, the modular approach hasn’t yet gained much market attention. With the mainnet still awaiting its official release, its launch is anticipated to generate significant excitement in the market.