Storage Provider

A Sector is the fundamental unit of storage, typically 32 GiB or 64 GiB, that a provider commits to the network. This process involves sealing the sector—a computationally intensive cryptographic operation that generates a unique CommR (Commitment Randomness) and CommD (Data Commitment). The sealed sector's proof is submitted to the blockchain, creating a verifiable storage commitment.

The core consensus mechanism that proves a provider is continuously storing the data it committed to. It involves two key proofs:

• WindowPoSt: Submitted regularly (e.g., every 24 hours) for all active sectors, proving they are still intact. Missing a deadline results in slashing.
• WinningPoSt: Submitted when a provider wins the right to produce a block, proving storage of a randomly selected sector in a short timeframe.

Providers enter into Storage Deals with clients, which are agreements recorded on-chain. The process involves:

• Publishing a storage ask (price, duration, filters).
• Receiving and verifying client data through a piece CID.
• Including the deal data into a committed sector.
• Announcing the deal on-chain so clients can retrieve the data via the Retrieval Market.

Providers must lock collateral (often the network's native token) to participate. This initial pledge collateral and deal collateral are at risk of slashing for faults, penalizing:

• Consensus faults (e.g., double-signing).
• Storage faults (e.g., failing to submit a WindowPoSt).
• Deal faults (e.g., failing to serve a storage deal). Slashing ensures economic alignment with network reliability.

In networks like Filecoin, providers also act as block producers. The chance to produce a block and earn block rewards is proportional to their Quality-Adjusted Power (QAP)—storage power weighted by the type and duration of deals. Rewards are released over a vesting schedule, aligning long-term incentives with network health.

Beyond storage, providers serve data to clients via the Retrieval Market. This is a separate, off-chain micropayment system where clients pay per byte for fast data delivery. High-performance providers often operate dedicated retrieval endpoints with low latency and high bandwidth to compete in this market.

Storage Providers must lock collateral (often in the network's native token) as a security deposit. This stake is subject to slashing—a penalty where a portion is forfeited—for provable faults like going offline, failing to provide proofs, or losing data. This mechanism aligns economic incentives with reliable service.

To prove data is stored correctly over time without requiring the client to download it, providers generate cryptographic proofs. Common systems include:

• Proof-of-Replication (PoRep): Proves a unique copy of the data is stored.
• Proof-of-Spacetime (PoSt): Proves the data has been stored continuously over a period. These verifiable computations are the core security mechanism.

Providers earn fees through storage deals, which are agreements with clients specifying price, duration, and replication factors. Rewards are typically a combination of:

• Deal payments from clients.
• Block rewards (in Proof-of-Storage networks like Filecoin) for contributing storage capacity to the network. Economics must cover hardware, bandwidth, and operational costs.

Data is packaged into fixed-size sectors (e.g., 32GiB or 64GiB in Filecoin). Sealing is the computationally intensive process of encoding a sector to generate the unique replica for Proof-of-Replication. Once sealed, the sector is committed to the blockchain, locking the provider's collateral against it for the deal's duration.

A fault occurs when a provider fails to prove storage for a sector. The network provides a short recovery period. If unrecovered, the sector is declared faulty, triggering slashing and stopping rewards. A provider can also terminate a sector early, which incurs a termination fee and may involve slashing, depending on the protocol.

Provider profitability is sensitive to:

• Hardware Costs: Specialized equipment for sealing and proving.
• Energy Consumption: Sealing is energy-intensive.
• Bandwidth: Required for data transfer and proof submission.
• Geographic Distribution: Impacts latency and certain incentive programs. Operational failures directly impact slashing risk and revenue.

A cryptographically signed agreement between a client and a Storage Provider. It specifies the terms of storage, including:

• Data CID (Content Identifier)
• Duration and price
• Replication factor (number of copies) Deals are published on-chain, creating a verifiable and enforceable storage contract.

The fundamental unit of storage commitment on a network like Filecoin. A Storage Provider seals client data into a sector, a fixed-size container (e.g., 32 GiB or 64 GiB). The sealing process generates the cryptographic proofs (PoRep) required to participate in consensus and earn rewards.

A decentralized marketplace where clients bid for storage and Storage Providers offer capacity. It operates via on-chain order books or off-chain discovery. Prices are determined by supply, demand, and provider reputation, not by a central entity.

A network participant specialized in the fast delivery of stored data to clients. While a Storage Provider guarantees long-term persistence, a Retrieval Provider optimizes for low-latency data fetching, often operating a content delivery network (CDN) on top of the stored data.