Table of Contents
- Key Takeaways
- 1. Background - Why Walrus's Investment Is Surprising
- 1.1 What Is the Significance of Raising $140M at a $2B FDV (Fully Diluted Valuation)?
- 1.2 The $140M Investment, How Many Tokens Were Allocated to These Investors?
- 1.3 Walrus Tokenomics Deep Dive
- 2. Takeaway - No Airdrop, No Community
- 2.1 A Strategy Only Possible for Mysten Labs
- 2.2 So Now, Which Ecosystem Really Cares About Its Community?
- 3. Resource
Researcher
Related Projects
Key Takeaways
The Walrus Foundation announced on March 20, 2025, that it raised approximately $140 million in investment from Standard Crypto, a16z, and others. At the time, Walrus had a valuation of about $2 billion, with investors acquiring 7% of the total token supply, while 10% was allocated to the initial community airdrop, demonstrating a community-centered distribution strategy.
The background that allowed them to secure substantial investment while allocating minimal tokens to investors likely stems from the fact that Walrus could be built to completion using Mysten Labs' own resources. This further proves how internally robust Mysten Labs' resources are.
Unlike existing storage protocols, Walrus adopted a PoS (Proof of Stake) approach, meaning the $WAL token will play a crucial role in securing long-term trust in the Walrus protocol. Therefore, it is considered to have sufficient potential to be valued highly as an asset.
1. Background - Why Walrus's Investment Is Surprising
1.1 What Is the Significance of Raising $140M at a $2B FDV (Fully Diluted Valuation)?
Source: Walrus
Mysten Labs' next-generation decentralized storage protocol, Walrus, disclosed its investment amount, valuation at the time of investment, and list of investors on March 20, 2025. The total investment amount was $140M, with an approximate valuation of $2B. Many prominent crypto funds participated in this investment deal, including Standard Crypto, a16z crypto, and Electric Capital. According to Mysten Labs' CEO Evan, there was "significant demand for Walrus" during the fundraising period.
To me, the investment amount and valuation that Walrus received were quite shocking. While a $2B valuation and $140M investment aren't unprecedented in the blockchain industry (there are numerous examples like Story, Berachain, and Monad), it's extremely rare in the highly niche sector of "decentralized storage layers." To help those who might find it difficult to grasp how remarkable Walrus's valuation is in the decentralized storage layer sector, let me provide a comparison: currently, the highest-valued storage network in the blockchain market is Filecoin, with a market cap of about $2B and an FDV value of $6B. In other words, Walrus has been valued at approximately 1/3 of Filecoin's value even before its mainnet launch. It has instantly become the second most valuable decentralized storage protocol in the blockchain market. This means Walrus is literally writing new history as a decentralized storage layer.
There's another interesting fact related to this fundraising: the investors. Almost all of the VCs that participated in this Walrus token round are composed of Mysten Labs' early investors. For example, Standard Crypto, which led this investment round, was a Series A investor in Mysten Labs; Andreessen Horowitz invested in both Series A and Series B; Electric Capital also invested in Series A; and Franklin Templeton invested in Series B. Similar to the Walrus token ($WAL) airdrop that I'll discuss later, this shows an alignment of incentives with investors who have supported the Sui ecosystem for a long time. Considering the relationship between Sui and Walrus, this can be considered an ideal investment structure. This is because if Walrus grows, Sui can also benefit from its positive effects (for more on the relationship between Walrus and Sui, refer to this article I wrote). Therefore, Walrus's investment was interesting news in many ways (as far as I know, this may be the first case where a company that launched a Layer 1 has received funding of this scale for another protocol).
1.2 The $140M Investment, How Many Tokens Were Allocated to These Investors?
Source: Walrus Tokenomics
1.2.1 Airdrop Volume > Investor Volume
One of the advantages Walrus has is that the protocol is already prepared for mainnet launch after going through testnet. Typically, many blockchain infrastructure projects take anywhere from 1-2 years to 3-4 years to be ready, so they prepare through multiple phases and receive investments at various stages. Naturally, they get funding at relatively smaller valuations in the early stages, which creates the problem of having to allocate more tokens to investors. However, Walrus did the opposite - because the protocol reached a near-completion stage, they were able to form a high valuation despite this being their first funding round. And because of this high valuation, even though they received significant investment from investors, they could distribute relatively fewer tokens to those investors.
According to Walrus tokenomics, only 7% of the total $WAL tokens were allocated to investors. This is less than the user airdrop (10%), which shows they were well aware of the market's negative sentiment toward projects with large investor allocations.
In my estimation, this strategy was possible because Mysten Labs had sufficient internal resources to develop and evolve Walrus as a rather heavy infrastructure without external funding, allowing them to rely on themselves until the Walrus product reached near completion. Since projects that allocate less to investors and more to the community tend to perform better in today's market, I find Walrus's tokenomics, investment strategy, and valuation quite interesting and ideal.
1.2.2 Where Will the Remaining 6% of the 10% Go?
Source: Adeniyi
Looking at Walrus's token distribution chart, the question most retail investors are curious about is "who will be allocated the remaining 6% of the 10% airdrop allocation?" While 6% of the total supply might seem small from a simple percentage perspective, it represents tokens worth approximately $120M given Walrus's $2B valuation, making it a substantial incentive.
Of course, since there's no information yet about this 6% airdrop, I can't say much definitively, but from my experience examining various airdrop strategies in this industry, I can speculate that this 6% allocation might be related to the other 4% allocation.
From the beginning, when allocating the 4% airdrop, Walrus appears to have carefully checked how many Sui ecosystem tokens like $DEEP or $NS users held, and whether they immediately sold their airdrop or not before making allocation decisions. This makes sense because both $DEEP and $NS were tokens allocated to the community through airdrops, and the fact that someone held them long-term suggests they're likely to have a long-term positive view not just of these individual protocols but of the Sui ecosystem as a whole, making it very rational to allocate more tokens to such users.
Hence, my speculation is that the remaining 6% allocation might also consider how much initial $WAL supply users have been holding. For example, if someone staked their 4% airdrop immediately after receiving it, that user might receive bonus points. Of course, only Mysten Labs insiders would know the answer, but if you have a long-term positive view on Walrus, I believe holding, and further staking, would be a wise strategy.
1.3 Walrus Tokenomics Deep Dive
Now that we understand Walrus's valuation and token allocation strategy, it's time to thoroughly examine Walrus's tokenomics. The most important fact to understand about Walrus's tokenomics is that Walrus is both a storage protocol and one that has adopted a PoS algorithm. Therefore, in this tokenomics deep dive, we'll explore why Walrus chose PoS, how Walrus nodes measure storage prices, and token governance.
1.3.1 Why Did Walrus Choose PoS?
While consistently following Walrus and often writing comparisons between Walrus and existing storage protocols, I missed one of the most important differentiating factors of Walrus - the fact that it's a storage protocol that uses PoS (Proof of Stake).
From a user's perspective, when using a storage protocol, the most important concern is "how will Walrus guarantee the storage contract I've entered into?" Basically, Walrus enters into a contract with users to "store specific data for a specific period." However, the problem is that nodes might not fulfill this obligation after a certain period because storing data is quite a costly operation.
In the worst case, nodes might no longer provide access to user data and demand more rewards using access rights as leverage. In other words, a situation could arise where user data becomes hostage and a ransom is demanded. Finally, since Walrus is a decentralized protocol, the tragedy of the commons could also occur.
Therefore, Walrus introduces PoS to prepare for such situations. In a way, PoS serves as a "minimum protection system" to punish malicious behavior by Walrus nodes and protect users.
The PoS system rewards nodes that act in good faith (fulfilling contracts well) and slashes those that act maliciously. In a way, Walrus has adopted the PoS system for the continuity and reliability of storage services.
1.3.2 How Are Costs Determined in Walrus?
First, costs in Walrus are broadly divided into storage costs and write costs. Storage costs are the rental fees needed to store data for a certain period, while write costs are one-time fees paid at the moment of registering new data. In other words, users should understand that they incur write costs when uploading data, and storage costs thereafter. So how does Walrus calculate these costs?
To put it simply, in Walrus, storage and write costs are determined by nodes, but rather than them reaching a consensus, each node submits what they think the cost should be, and when nodes are ranked based on these values, the price proposed by the node at the 66.67 percentile (the lower 2/3 point based on stake) is adopted. This price measurement mechanism has already been demonstrated by Sui when calculating transaction costs. For those who find this difficult to understand, let me explain further:
Each node proposes a 'price': Node A $0.9, Node B $1.0, Node C $0.5, Node D $1.2.
Sort the proposed 'prices' in ascending order (listing nodes that proposed lower prices first): Node C → Node A → Node B → Node D
Calculate the staked tokens each node has: Node A 10, Node B 20, Node C 15, Node D 5.
The total stake of all nodes is 50, and 2/3 of 50 is 33.3. So when nodes are sorted by price, the point where the stake reaches 33.3 is at Node B's position (since even combining Nodes C and A only gives 25), making Node B's proposed $1 the cost.
Both storage costs and write costs are measured this way, but in the case of write costs, an Hardcoded Factor is additionally applied to the determined price, making users pay an additional deposit when uploading data. This is to encourage users to store their data on as many nodes as possible at the protocol level.
In Walrus, a user doesn't necessarily need to upload data to all nodes; they can claim to have uploaded a blob to the chain if the data is uploaded to a minimum number (f+1~2f+1) of nodes. However, in such cases, when another node needs to access that blob later, additional recovery or data transfer operations increase, leading to higher costs from a network-wide perspective.
Therefore, to solve this, Walrus initially collects an additional deposit when users upload data, and then returns this deposit if users directly upload blobs to as many nodes as possible, thus encouraging users to store data on as many nodes as possible. This Hardcoded Factor is a fixed value but can be modified through token governance.
In summary:
Storage costs are selected directly from the values submitted by nodes, corresponding to the 66.67 percentile based on stake.
Write costs are determined in the same way, but the final value that users actually pay includes an Hardcoded Factor for additional deposits.
1.3.3 Governance
Like any other PoS-based network, Walrus also has governance. Of course, since the mainnet hasn't even started yet, it's uncertain exactly what role governance will play, but according to the Walrus whitepaper, governance will adjust various parameters in the Walrus network. For example, parameters regarding penalties for nodes that operate poorly and appropriate compensation for nodes that suffer as a result will also be determined through governance. As with other PoS systems, voting rights are proportional to the sum of one's own stake and delegated stake, and changes to the protocol itself basically require approval from 2f+1 storage nodes.
2. Takeaway - No Airdrop, No Community
2.1 A Strategy Only Possible for Mysten Labs
Walrus's token distribution is truly remarkable. It's surprising that they allocated only 7% of the total supply despite receiving investments worth $140M, but it's worth considering how many teams besides Mysten Labs could execute such a strategy.
From the beginning, Mysten Labs has been a company composed of people who have deeply contemplated the infrastructure needed in the blockchain industry for a long time. While Mysten Labs' own history might be short, considering that they've been thinking about blockchain technology since the Diem era, that period is truly lengthy. This allowed them to prepare Walrus, a product that is clearly differentiated from existing storage protocols while remaining efficient. Since the product was already highly complete, they were able to raise significant capital with minimal token allocation.
I'm not sure how many more protocols and products Mysten Labs will release in the future, but I believe that with their own resources alone, they can stand out sufficiently in the blockchain industry.
2.2 So Now, Which Ecosystem Really Cares About Its Community?
Source: Adeniyi
Whether many people remember it or not, Sui is famous for being a Layer 1 chain that launched its mainnet without an initial airdrop. At that time, many people mocked Sui as a "scam" and criticized Sui and Mysten Labs, saying "without an airdrop, there is no community." Now, as Sui approaches the second anniversary of its mainnet launch, the negative public opinion about Sui has long since disappeared. This is because, looking at the results, Sui has turned out to be the Layer 1 blockchain that has given the most rewards to its community. From $DEEP, $NS, to $WAL. Deepbook also airdropped 10% of its $1B FDV, which is $100M, and Sui Naming Service airdropped 10% of its $100M FDV, which is $10M. So if someone has been consistently active and contributing in the Sui ecosystem, they could say they've gained quite significant economic benefits.
Getting back to Walrus, Adeniyi said that Walrus would be "one of the biggest airdrops in crypto history," and that claim seems quite accurate. This is because with Walrus's FDV at $2B, airdropping 10% of that means distributing tokens worth approximately $200M in dollar value.
On second thought, Mysten Labs' strategy of 'post-mainnet airdrops' seems more effective in creating a passionate community. When airdrops happen alongside mainnet launches, it's very difficult to judge who is a dedicated user and who isn't, but by observing various activities after the mainnet and then conducting airdrops, it becomes much clearer which users should be rewarded. Additionally, by airdropping various ecosystem tokens, they encourage users to continuously participate within the ecosystem and expect another "reward," thus attracting new users while giving existing users reasons to become more loyal.
Recently, the Sui community, along with Hyperliquid, has been gaining attention as an "extremely enthusiastic community," and I believe there are clear reasons why communities form around such projects.
So, now who is the 'project that thinks about its community'?
3. Resource
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