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Interest in infrastructure continues, with a detailed explanation of Paradigm’s new $9 million investment project, Shadow

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Shadow is committed to simplifying and reducing the engineering time and cost of on-chain data indexing and analysis.

Original Title: "Infrastructure Interest Unabated, Detailed Explanation of Paradigm's $9 Million Investment in New Project Shadow"

Original Source: DeepTech TechFlow

Individual investors in the secondary market are actively using inscriptions, while VC firms in the primary market are still insisting on investing in infrastructure.

Recently, a infrastructure project named Shadow announced publicly that it has received a $9 million seed round financing led by Paradigm.

Infrastructure is indeed important in the field of encryption, but currently, the general feeling is that there is an overemphasis on infrastructure and a lack of applications.

This also makes us start to think, why do venture capitalists tend to invest heavily in infrastructure projects? What problems can these projects solve that are not obvious to most users, but are crucial to the entire cryptocurrency industry?

Infrastructure projects often have many technical details in their design, which can be difficult to understand; after reviewing the relevant information about the Shadow project, this feeling becomes even more apparent.

The project website is filled with a large amount of code and data, which is difficult for ordinary users to understand what problems it can solve.

Roughly speaking, Shadow is an innovative blockchain infrastructure project that aims to simplify and reduce the engineering time and cost of on-chain data indexing and analysis. However, there is no standard answer as to how to do it and why to do it.

As a rising star in the top VC Pardigim investment, Shadow naturally has its outstanding features.

Therefore, after conducting a certain degree of research, the author attempts to interpret the pain points and unique solutions captured by Shadows, and delve into the core value of Shadow and its potential impact in the field of encryption.

On-chain data analysis is crucial, but expensive to use

First of all, the Shadow project aims at the field of on-chain data analysis.

On-chain data analysis is crucial in the cryptocurrency industry, as it provides in-depth insights into market dynamics and is a key factor in optimizing trading strategies, enhancing security measures, and promoting technological innovation.

However, please note that the on-chain data analysis mentioned by Shadow cannot be equated with on-chain analysis tools such as Dune, Nansen, and Arkham that we are familiar with.

On-chain analysis tools are essentially "processing data before giving it to you," while on-chain analysis is "data processing."

This is a bit like the difference between dishes and ingredients in a restaurant.

You use on-chain data tools for free and fast because the restaurant has already prepared the dishes for you to eat directly. However, in the kitchen, processing ingredients (raw on-chain data) may be a time-consuming and laborious task.

What is the time-consuming and laborious method? Existing on-chain data analysis is facing the problems of high cost and technical complexity:

·The event log generation of smart contracts requires high gas fees to be paid.

·Real-time tracking and analysis of data requires massive computing resources.

·Although on-chain data is publicly transparent, their structure and format may make parsing and effective utilization a challenge.

Therefore, existing data analysis solutions often fail to meet the demands of real-time processing, cost-effectiveness, and flexibility, highlighting the urgent need in the market for a more efficient and economical method of data processing.

This type of demand may not be the end user's demand; just like the analogy mentioned above about the restaurant, this may be the demand for the restaurant to process raw materials. Therefore, the Shadow project is more of a service for project parties, developers, and professional data analysts, rather than for end users.

Shadow, creating a "shadow" for expensive entities

Since the cost of utilizing and organizing on-chain data is high, a feasible solution is:

Copy a "fork" version of the on-chain data, and then analyze and modify it to your heart's content within this fork.

This is also a hint in the name of the Shadow project. Instead of directly calling resources for analysis on the main chain, a similar "shadow" version is generated for processing.

This approach easily brings to mind the Fork button on Github.

Someone has a code repository that I think is pretty good; but I don't want to mess it up by directly moving things around in their repository. So the best way to do it is to Fork someone else's code repository and clone it to my own computer for easy modification.

Similarly, you can analogize the forking of Shadow's shadow to forking someone else's code repository on GitHub. On Shadow, you can create a shadow version of the main chain for data analysis and custom event log addition, without affecting the main chain itself.