Preface

In the rapid development of blockchain technology, the demand for data access layer is increasing. Lava Network (LAVA), as the first modular data access layer of the blockchain, aims to solve the challenges of traditional blockchain in data storage and interoperability. The project not only introduces a modular primitive, but also allows contributors to add support for new chains and data services to the underlying protocol without permission.

What is LAVA Network?

LAVA is a protocol that provides 24/7 access for blockchain applications (dapps) and AI agents, ensuring minimal downtime and dynamically adapting to demand by aggregating RPC providers to route user requests to the fastest, most reliable services, thereby improving overall efficiency.

The incentive measures are key to this protocol, such as allocating the total supply to reward data providers in the early stages of the network. The purpose of doing this is to guide the supply side of the network and alleviate the cold start problem faced by many networks.

Project Origin

Lava Network was co-founded by Yair Cleper and Gil Binder from Israel, who have experience in building multiple start-ups in the Web2 field. Initially, they wanted to create a multi-chain NFT marketplace, but realized that running their own nodes for each blockchain was resource-intensive. They explored using node providers but found limited options for certain chains like Cosmos, and existing providers were either limited or unreliable, unable to meet their needs. So they decided to focus on Ethereum first, but faced API limitations and the challenge of using multiple providers.

The team eventually realized that the blockchain world is fragmented, complex, and slow in accessing data, which is exactly the field where Lava Network wants to intervene. Lava Network aims to simplify the multi-chain landscape by providing a one-stop solution for accessing blockchain data. With Lava Network, developers can easily access relevant providers without knowing which provider is being used behind the scenes. The design of Lava Network is modular and flexible, making it easy to integrate them when new chains become popular.

Financing News

While the amount of financing alone cannot clearly indicate the future success of a project, it does show investors’ optimism about the potential of the products offered. It is worth noting that Lava Network has completed a $15 million seed round of financing, with Jump Capital leading the seed round and participation from investors including Hashkey Capital, Tribe Capita, Alliance, Node, North Island, Quiet, Finality, and Dispersion Capital.

Blockdaemon, ConsenSys (Infura), and QuickNode, which have previously invested in Alchemy, also participated in this round of financing. Validators, ecosystems, and founders of Cosmos, Polkadot, Filecoin, StarkWare, Axelar, NEAR, Celestia, Celo, etc. also joined this round of financing.

Lava Network is clearly closely integrated with the Cosmos community, and dozens of providers from different ecosystems have joined Lava and receive rewards at the end of each month.

Core Features and Incentive Mechanism

1. Dynamic Traffic Management

The LAVA Protocol focuses on managing dApps and AI agent traffic on each blockchain.

• Aggregate multiple RPC providers and dynamically adjust to support different needs.
• By assessing delays, normal operation time, and accuracy, requests are directed to the best provider.

2. Incentive measures

Lava’s operation relies on cryptographic economic incentives:

• In the early stages of the network, rewards were allocated to data providers to attract suppliers and solve the cold start problem.
• LAVA holders can re-stake tokens to premium providers to ensure high-quality services.

Operating mode

1. Data providers join the network

• Data providers including RPC node operators and indexers join the protocol by staking LAVA on the Lava blockchain.
• Each provider serves a specific blockchain and aggregates it to the endpoint, and the application user traffic is directed to these endpoints.

1. Traffic Coordination and Service Evaluation

• LAVA is responsible for coordinating the traffic between applications and providers.
• The provider obtains a comprehensive reputation score based on the delay, normal operation time, and response accuracy of the service.

1. Pledge and Re-pledge

• Data consumers (such as wallets, dapps, AI agents) can access services without permission and benefit from high-quality on-chain resources.
• LAVA pledges to ensure the security of the collateral guarantee agreement and allows holders to support high-quality providers through re-collateralization, thereby promoting network growth.

Key components of the protocol

1. Data Provider:

• Including RPC node runners, indexers, etc., providing efficient services and obtaining rewards from the blockchain.
• Reputation score based on historical service quality (delay, normal running time, accuracy).

1. Information consumer:

• Including entities such as dapps, wallets, and AI agents, access blockchain resources through LAVA with minimal downtime.

1. Incentive Pool:

• LAVA is a reward pool built on the blockchain to reward contributors to the network. These rewards are usually paid in the native tokens of the collaborative chain (such as NEAR).

1. Crypto-Economic Incentives:

• Including the reduction mechanism and confinement design to encourage providers to maintain high-quality services.

Token Economics

The total supply of LAVA tokens is 1 billion, and it adopts a deflationary mechanism to attract API providers in the early stage of the mainnet. Among them, 25% of the tokens will be used for future plans and reward reserves (6.6% of the tokens will be allocated as monthly rewards to providers; 3.4% of the tokens will be provided to validators); 31% of the tokens will be used for research and ecosystem protocol maintenance and development; 17% of the tokens will be allocated to investors; 27% of the tokens will be allocated to early contributors, core team, advisors, and other contributors.

Summary

Lava Network (LAVA) is the first modular data access layer in the blockchain field, aiming to solve the challenges of data access and interoperability in traditional blockchains. Through modular design, Lava allows contributors to add support for new chains and data services without permission. Lava provides 24/7 access for dapps and AI agents, ensuring minimal downtime and dynamic adaptation to demand. By aggregating RPC providers, overall efficiency is improved. Founded by Yair Cleper and Gil Binder, Lava has completed a $15 million seed round of financing with investors including Jump Capital and other well-known institutions. Its core features include dynamic traffic management and incentive measures, ensuring high-quality service through staking and re-staking mechanisms for the network.