Lava Network heats up the node landscape with market forces

Decentralization is a spectrum. After years of putting up with relatively centralized critical infrastructure in the node space, the industry is making progress towards achieving a more Web3-native vision.

Lava Network rolled out its Software Development Kit (SDK) Beta on Tuesday, turning the page to a new phase of its testnet. The project serves as a marketplace for high-performance, decentralized blockchain Remote Procedure Calls (RPC) and APIs.

RPC nodes are essential for users interacting with blockchains, but when offered by a few centralized companies, they present a single point of failure. They can also pose problems related to privacy, censorship and data accuracy.

Unlike most testnets, Lava’s is already serving two hundred node providers, operating on their blockchain’s respective mainnets.

CEO Yair Cleper calls it “kind of Uber for nodes.”

So far, Lava has seen rapid organic growth of demand for the network to replace current public RPCs that are frequently run by ecosystems themselves.

“We call it an incentivized public RPC,” Cleper said, or IPRPC. “We are offering to our community — to our node runners — the option to join the IPRPC on its dedicated chain, and the ecosystem rewards them.”

The protocol, which is backed by leading crypto-native investors like Tribe Capital, Jump Capital, AlphaLab, Hashkey, and Alliance DAO, already supports 30 active chains.

Lava Network itself is a modular layer built as a sovereign app-chain using the Cosmos SDK, and acts as a distribution channel for node providers. It automatically routes requests to the most optimal node available, according to quality of service score.

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These scores, tallied by Lava based on latency, availability and “freshness” of the data, are what allows the network to feed reliable and fast data providers to developers and users. This is all done programmatically, based strictly on market forces rather than as a result of off-chain agreements.

The Lava chain tracks service scores and payouts distributed monthly, removing the need for locating nodes and contracting with them individually.

On a mission

Cleper and chief technology office Gil Binder both served in the Israeli army. Cleper is based in Tel Aviv, while Binder moved to New York about 5 years ago. The 2021 edition of the Solana Breakpoint conference was the pair’s first foray into crypto.

They observed shortcomings in infrastructure across the industry.

“There is a natural evolution in the way that the blockchain data is being consumed,” Cleper told Blockworks. “From the beginning — everyone running his own nodes — then going to the centralized provider; they really eliminate the barrier to consume, read, write data, but at the same time, introduce new problems.”

There have been efforts to decentralize the infrastructure stack, including among the big centralized players, but Lava’s approach to the problem is novel.

First, the Lava SDK is “a peer-to-peer communication protocol, straight from the browser, accessing only the top provider without any middle layer,” Cleper explained, sidestepping the drawbacks of the more centralized status quo.

Second, is a new blockchain primitive which Lava terms, “specs.”

Inspecting “specs”

The introduction of specs enables anyone to permissionlessly add support for new chains, APIs and data services to the network, significantly expanding Lava’s capabilities.

“Everyone can join lava, introduce their own specs and build it while supporting the new upcoming nascent chains,” Cleper said.

In a modular multichain world with potentially hundreds or thousands of app-chains and rollups, centralized node providers simply won’t be able to keep up, he said.

“And we thought, how do we harness the power of community to bring kind of an Amazon algorithm that automatically gives you the best provider constantly scoring the session, the service you give.”

The spec is analogous to categories of items in the Amazon store. Lava aggregates all providers adhering to a given spec, and its quality of service algorithm directly connects the user to the best available option.

To use another analogy, “a spec is like a menu at a restaurant,” Binder said. “It tells you what are the specifications, what data can you get, what’s the interface to getting the data.”

Node providers are like franchise owners of a restaurant chain with all the same dishes on the menu.

RPC nodes are only the first step, but Binder anticipates a flood of data APIs to use the network, providing structured, indexed data for all sorts of Web3 use cases. The team is in discussions with indexing providers such as Subsquid.

Node providers, such as Blockdaemon, Chainstack and hundreds of others, get a pro-rated share of rewards based on quality of service. Lava facilitates reputation on-chain, based on verifiable data from the provider’s service.

“We use that reputation to increase how often a provider can get access to users,” Binder said. “It’s a market — for providers, for consumers, for champions — to bring in these opportunities and then have competition around quality, which results in better service in the end.”

It’s no longer necessary to make the case for decentralized infrastructure. “Everyone agrees with this message that decentralizing RPC, that’s the way to go, and now the question is executing the best platform that allows these providers to compete,” he said.

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