Syntropy - 12 - by Crypto Distilled

2/17/24, 6:24 AM Syntropy - #12 - by Crypto, Distilled
Syntropy - #12
The Data Layer For Web3
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Welcome to the 12th edition of Distilled Deep Dives!
Distilling clarity from the market's chaos, we provide crystal-clear reports on projects at
the forefront of innovation.
1. Project Overview:
In the digital age, data is at the core of our online activities, guiding everything from
leisurely browsing to financial choices.
Yet, transitioning to Web3 introduces a critical hurdle: ensuring real-time data

streaming in a decentralized landscape.
While decentralized solutions exist, they're fragmented and specialized, leaving Web3
without a unified on-chain data management solution.
This is where Syntropy steps in—a pioneer, disrupting established players like
Chainlink and Celestia with its all-in-one, versatile toolkit for the Web3 data economy.
https://distilleddeepdives.substack.com/p/syntropy-12 1/41
Report Summary:
Each Distilled Deep Dive employs a 10-step process, starting from a broad perspective
and focusing down to key elements.
This structured, top-down approach defines our reports, ensuring clear, distilled
insights in a concise format for every edition.
2. Market Opportunity:
A. The Invisible Billion-Dollar Market: Blockchain Data
(i) Blockchain Data: The Foundation Of Web3
Blockchain data forms the cornerstone of Web3, essential for running diverse platforms
from NFT marketplaces to DeFi applications.
The escalating demand for blockchain data is evidenced by the dramatic rise in Bitcoin's
daily transactions, showcasing the sector's rapid growth.
Daily transactions on the blockchain of Bitcoin (Source: Statista)
(ii) US Blockchain Data Market: Poised For Explosive Growth

The US blockchain data market is poised for significant growth, driven by more digital
transactions and the development of new blockchain protocols.
With advanced service providers enabling easier access to blockchain data, the market is
rapidly expanding, offering vast opportunities for further growth.
An impressive projected CAGR of 87.7% from 2023 to 2030 highlights the sector's
potential to become a key market area.
Blockchain Technology Market (Source: Grand View Research)
(iii) Evolution Towards Decentralization:

The evolution towards decentralization addresses a crucial gap in the predominantly
centralized blockchain data services market.
Embracing decentralized models for data access can transform the industry by lowering
costs and latency through direct node-to-node communication.
This shift not only paves the way for innovation but also resonates with blockchain's
foundational principles, representing a major opportunity for growth.
Syntropy Is Redefining Data Access Like A Public Library (Source: Syntropy)
B. Navigating The Data Availability (DA) Challenge:

(i) Understanding DA In Blockchain's Growth:
Data Availability (DA) refers to the process of ensuring that transaction data on a
blockchain is readily accessible for validation and confirmation by all nodes.
It becomes increasingly important as a blockchain grows in transaction volume, posing

a challenge to balance the influx of data with the need for decentralization.
Data Availability: What Is It? (Source: Avail)
The challenge lies in managing the growing amount of data in a way that does not
overburden the network or require excessive hardware resources from nodes.
Overcoming the DA challenge is vital as blockchain networks grow, directly addressing

the core scalability trilemma.
The Scalability Trilemma Defined (Source: Michael Zochowski)
(ii) Innovative Approaches To DA:

Innovative approaches are addressing data availability (DA) challenges by allowing light
nodes to verify data through random sampling of block data.
This method enhances trust in data accessibility but raises questions about scalability—
specifically, the capacity of networks to expand DA for growing demands.
Prominent platforms like Celestia, Polygon Avail, and EigenDA are creating
application-specific chains dedicated to DA, aiming to scale data space effectively.
However, these advancements underscore a vital issue: the economic viability of DA-
focused networks.
X (Source: Polynya)
C. Revolutionizing Infrastructure With DePIN:

(i) Introduction To Decentralized Physical Infrastructure Networks:
DePINs embody a groundbreaking approach to the development and management of
physical infrastructure via decentralized collaboration.
This concept, while straightforward in theory—leveraging collective efforts for

infrastructure development—entails intricate crypto and operational dynamics.
Tapping into real-world demand – and building infrastructure with decentralized

incentives – is what makes DePIN potentially so transformative.
Source: Messari: State of DePIN 2023
(ii) The Data Layer: The Heart Of DePIN

At the core of the DePIN model lies the Data Layer, essential for enabling the real-time
exchange of blockchain data
The Data Layer plays a pivotal role in advancing Decentralized Relay Networks and
ushers in innovative Web3 applications by ensuring seamless access to live data.
Source: Syntropy Docs
D. Enhancing DeFi And DEXs With Real-Time Data:

(i) The Importance of Timeliness In DeFi:
In the fast-paced world of DeFi and DEXs, time equates to money.
Investors and traders require immediate data to navigate the market effectively, making
decisions that optimize gains and mitigate risks.
Data Quality for DeFi Smart Contracts (Source: Chainlink)
(ii) The Value Of Mempool Data:

Mempool data, representing transactions awaiting blockchain confirmation, is
invaluable for gaining early insights into market movements
For DEX traders, observing large pending sell orders could indicate an imminent price
drop, allowing them to strategize their entry points more effectively.
Mempool data (Source: bloXroute)
(iii) Impact On Trading Strategies And Market Efficiency:

Real-time data is vital for optimal trading, minimizing costs from price slippage and
facilitating quick responses to market changes, ensuring stability and efficiency.
Below are some additional impacts:
3. Utility & Technology:
A. The Evolution Of Syntropy:

(i) Syntropy's Original Vision And Technology:
Syntropy, established in 2017, aims to enhance internet connectivity through a
blockchain-based data orchestration network.
The core of its mission lies the patented Distributed Autonomous Routing Protocol
(DARP) technology, aimed at optimizing data packet routing for maximum efficiency.
This innovation targets reducing network latency for a faster, more reliable internet
experience globally.
Source: US patent 11,271,851
(ii) Launch And Initial Strategy Of Syntropy Stack:

In January 2021, Syntropy introduced its first product, the Syntropy Stack, utilizing
DARP technology to elevate internet connectivity.
Initially aimed at offering superior bandwidth, performance, and resource efficiency, the
product targeted Web2 customers to penetrate the mainstream market.
However, merging blockchain tech. with traditional services faced challenges, leading to
slow adoption —a phase often coined as ‘The Chasm’ from Web2 to Web3.
Geoffrey Moore’s “Crossing the Chasm” (Source: Smith House)
(iii) Pivoting Towards The Web3 Market:

Confronted by slow growth and market entry challenges, Syntropy re-evaluated its
strategy in late 2022.
Acknowledging DARP's success in cutting latency, Syntropy decided to focus on the

growing Web3 sector.
This move is designed to establish Syntropy as a key component of the Web3 tech stack,
tackling key challenges like blockchain scalability & interoperability head-on.
B. Pioneering The Data Availability Layer:

(i) Transforming Blockchain Data Traffic With DARP:
Syntropy is redefining blockchain data traffic through its pioneering DARP technology,
transitioning from optimizing traditional internet traffic.
This shift focuses on creating a multi-chain data layer, ensuring decentralized, scalable
access to both real-time and historical blockchain data.
With DARP's adaptation for blockchain, Syntropy aims for a future of smooth data
exchange across various chains, enhancing interoperability and operational efficiency.
Syntropy 101 (Source: Syntropy)
(ii) Core Components Of Syntropy's Data Layer:

Syntropy's Data Layer is centered around real-time data streams, supported by a
custom-built node infrastructure and advanced caching algorithms.
This setup facilitates the near-real-time collection, processing, and delivery of on-chain
data, ensuring its accuracy, reliability, and user-friendliness.
Syntropy's intriguing pivot to data availability (Source: David Atterman)
(iii) Key Functions Of The Platform:

Syntropy's platform is distinguished by three primary functions:
(iv) Decentralization & Usability:

Syntropy's Data Layer protocol democratizes Web3 data, enabling anyone to participate
as a data provider in an open market.
This decentralization is reinforced by tokenization, aligning incentives between

providers and consumers based on performance and data quality.
Syntropy aims to disrupt the current RPC node industry standard by offering more
competitive prices, driving down the cost per gigabyte of data.
Figure: Price per gigabyte of Ethereum data expected in the Syntropy Data Layer vs RPC node
providers and centralized APIs
Source: Syntropy Docs
4. Competitive Landscape:
A. The Blockchain Data Management Market:
(i) Key Competitors
On-chain data management is pivotal for the Web3 infrastructure, facilitating smooth
interactions among blockchains, dApps, and the off-chain world.
Despite Syntropy's well-rounded approach, the intensity of competition poses a

challenge, necessitating clear differentiation and value proposition.
Syntropy's intriguing pivot to data availability (Source: David Atterman)
(ii) Syntropy's Competitive Edge:

Syntropy stands out by incentivizing existing nodes to stream both real-time and
historical data.
Utilizing DARP, the platform is set to provide superior data streams with lower latency
and enhanced scalability—all while upholding network decentralization.
With a diversified revenue model, Syntropy's DA layer is primed for economic

sustainability, setting it apart from other DA app-chains in the market.
B. Addressing Centralized Provider Challenges:

The landscape of blockchain data services is primarily dominated by centralized entities
such as Alchemy, QuickNode, and Infura, which dictate the market's capacity through
their revenue streams and market presence.
However, despite their operational success, these centralized frameworks face various
challenges that affect the overall accessibility & efficiency of blockchain data services:
C. Syntropy's Edge In Ethereum Data Delivery:

(i) Overview Of The Ethereum Latency Study:
Syntropy conducted an Ethereum Latency Test to compare its performance with
industry leaders like Alchemy, Blocknative, and Quicknode in delivering essential
Ethereum mempool and transaction data.
Given Ethereum's status as the primary ecosystem for dApps, the speed and reliability
of data delivery are paramount for development within the Web3 space.
(ii) Study Methodology And Results:

In June 2023, a study was carried out to compare Syntropy's latency times against its
competitors, gathering extensive data over multiple days.
Findings demonstrated Syntropy's excellence in performance, achieving notably lower

latency in data transmission.
Syntropy surpassed the median latency of competitors by about 500 milliseconds,

highlighting its superior efficiency in data management and delivery.
Benchmarking Data Delivery and Latency on Ethereum (Source: Syntropy)
5. Adoption:
A. Syntropy's Impact On The FIFA World Cup With Entain:
(i) Enhancing Sports Betting Infrastructure:
During the FIFA World Cup, a period of intensified activity for sports betting firms like
Entain, Syntropy ensured seamless network performance.
This collaboration demonstrated Syntropy's capacity to manage significant traffic

spikes, essential for leveraging heightened betting interest.
(ii) Network Optimization With Syntropy Stack:

Utilizing the Syntropy Stack and its proprietary Distributed Autonomous Routing
Protocol (DARP), Syntropy enabled dynamic network traffic routing.
DARP enabled real-time adjustments based on network conditions, offering Entain

faster and more reliable connectivity crucial for ensuring customer satisfaction.
Case study: Entain x FIFA World Cup (Source: Syntropy)
B. Syntropy & KYVE: Full-Scope Web3 Data On Cosmos

(i) The Cosmos Ecosystem: A Hub of Innovation
With over 250 interchain applications, the Cosmos network encounters challenges of
fragmented user bases and data silos.
Syntropy's real-time data streaming on Cosmos, complemented by KYVE and Arweave,

enhances accessibility to historical and real-time data for developers while setting new
standards for blockchain data accessibility.
(ii) KYVE Network's Role In Data Archiving And Validation:

KYVE Network plays a vital role in preserving and validating historical blockchain data.
It ensures decentralized validation and accessibility of past blockchain activities,

addressing the trade-off between indexed data access and real-time, trustless access.
Validator pools enhance data integrity, fostering a trustless ecosystem prioritizing data
authenticity and reliability.
Source: Kyve Network Documentation
(iv) Syntropy's Real-Time Data Delivery Expertise:

Syntropy complements KYVE's historical data focus by excelling in real-time data
delivery for event-driven dApps like DEXs.
It offers transformative instant data streaming from any Cosmos network blockchain,
providing a complete data oracle solution.
This collaboration facilitates decentralized, peer-to-peer data streams, marking a

significant advancement in the ecosystem's development.
KYVE and Syntropy Partner; Full-Scope Web3 Data on Cosmos (Source: Syntropy)
C. Strategic Collaboration With Morpheus AI Agents:

In January 2024, Syntropy announced a key partnership with Morpheus, enhancing the
use of decentralized data within Morpheus' AI agent network.
This move places Syntropy among top innovators like Akash Network and Filecoin,
reinforcing its status in the field of decentralized AI.
Source: The Oracle (X)
6. Growth Outlook:
A. Syntropy's Strategic Roadmap:
Syntropy is on a transformative journey, currently navigating through an ambitious
roadmap to revolutionize how blockchain data is accessed and utilized.
Syntropy Stages (Source: Syntropy)
B. Stage 2: Silverstone - Expanding Accessibility & DeFi

(i) Opening The Data Layer To The Public:
In the first quarter of 2024, Syntropy takes a significant leap by making the Data Layer
protocol fully accessible to the public.
This milestone allows users to subscribe to data streams using tokens and enjoy an
improved developer experience, marking a crucial step towards demonstrating the Data
Layer's capabilities to a broader audience.
(ii) Enhancing The DeFi Ecosystem:

Stage 2 emphasizes Syntropy's dedication to the DeFi sector, notably through its
integration of real-time data streams into a custom dashboard dApp.
This initiative is designed to improve the user experience on decentralized exchanges

(DEXs) by leveraging in-house dApps fueled by real-time data.
Key Developments in Silverstone:
C. Stage 3: Monaco - Full Operational Capability

(i) Token Economy And Utility Expansion:
Entering Q2, the Data Layer reaches full operational status, bringing into effect a
comprehensive token economy.
The launch of a token bridge between Ethereum and the Syntropy-native blockchain
facilitates the transfer of NOIA, enhancing ecosystem interoperability and utility.
Key Developments In Monaco:
7. Team & Strategic Alliances:

Syntropy is making significant strides in the blockchain and Web3 domains, supported
by a robust team, strategic alliances, and substantial investment backing.
A. Successful Funding Round: Fuelling Growth

Syntropy secured a significant $4 million in its latest funding round, gaining backing
from top venture capital firms and prominent figures in the blockchain sector.
Support from Alpha Transform Group, Alphemy Capital, and FirstBlock Capital
highlights broad institutional belief in Syntropy's vision and technology.
Syntropy Raises $4 Million to Unlock the Web3 Potential (Source: Syntropy)
B. Executive Leadership Update: New CEO Appointment

In a strategic move on February 5th, 2024, Syntropy appointed Daniel Haudenschild as
its new Chief Executive Officer (CEO).
Daniel brings a wealth of experience in digital asset infrastructure from roles at Ernst &
Young, Swisscom Blockchain, Origyn, SIBEX, and the Crypto Valley Association.
His appointment promises to guide Syntropy's strategic direction and growth with his
deep industry knowledge and strategic expertise.
Source: Syntropy
C. Strengthening The Ecosystem: External Validators

Syntropy is broadening its blockchain's real-world utility by integrating external
validators from Stakein, Daic, and Saxon.
This move diversifies on-chain data streams and supports new publishers in the
Syntropy ecosystem, crucial for promoting ecosystem growth.
8. Tokenomics:
A. Overview Of Native Token (NOIA)
The native NOIA token underpins the network, crucial for ensuring security,
incentivizing participation, and facilitating governance within the ecosystem.
(i) Core Pillars Of Tokenomics:

The tokenomics framework of NOIA is built upon three fundamental pillars:
(ii) Key Utilities Of NOIA:

NOIA serves multiple critical functions within its ecosystem:
(iii) Economic Actors In The Data Layer:

The Data Layer ecosystem comprises several key participants:
Publishers: Generate and sell data, receiving payments based on demand.
Subscribers: Purchase data from publishers through the network.
Brokers: Facilitate data transmission from publishers to subscribers, earning

rewards based on the volume of data relayed.
Observers: Ensure the accuracy of data accounting provided by brokers.
NOIA Token Release Schedule for H1 2024 (Source: Syntropy)
(iv) Reinvestment And Governance:

Tokens earned within the system can be reinvested by:
Publishers: To create more subjects and push more data.
Brokers: To meet continuous crediting requirements.
All Actors: To delegate tokens to Validators, thereby increasing returns and

participating in governance.
B. Token Circulation And Supply Dynamics:

(i) Annual NOIA Token Release Schedule:
By the close of 2023, the circulating supply of NOIA tokens reached about 752 million,
surpassing initial projections.
As of January 1st, 2024, 73.5% of NOIA tokens are in circulation, with the remaining
26.5% designated for incentivizing the Syntropy Chain and future funding initiatives.
(ii) Reward Pool And Validator Support:

Syntropy has set aside a specific token pool to reward Validators for their role in block
creation.
Aiming for a staking rate of 50%-67% of the circulating supply, this approach seeks to
maintain security while efficiently managing the token supply, considering the
substantial amount of tokens committed to the Data Layer.
(iii) Token Unlock Schedule:

The unlock schedule up to June 2024 outlines the distribution of rewards for the NOIA
staking and liquidity programs, investor token unlocks, and allocations for company
operations, including employee bonuses, marketing, and community campaigns.
9. Key Risks:
As Syntropy gears up for a final product launch in 2024, it's essential to assess the
potential risks that could impact its trajectory.
A. Execution Risk:
The anticipation of Syntropy successfully reaching its development milestones carries
considerable risks of execution.
Potential delays or technical setbacks could impact the platform's timely delivery,
possibly eroding investor confidence and affecting early adoption rates.
B. Market Competition And Differentiation:

(i) Navigating A Competitive Landscape:
Syntropy operates in a fiercely competitive market, necessitating a compelling
differentiation strategy.
The blockchain data serving space is crowded, and spreading resources too thinly across
many niches could weaken Syntropy's competitive stance.
(ii) Competition In Data Availability:

Syntropy's primary focus on data availability places it in direct competition with
established players like Celestia (TIA) and Near Protocol (NEAR).
Top Data Availability Tokens by Market Capitalization (Source: Coin Market Cap)
10. Final Thoughts:

Syntropy's approach to leveraging decentralized networks for improved data delivery
positions it uniquely in a crowded market.
Success for Syntropy depends on effectively executing its development roadmap and
maintaining a strong product-market fit in a fast-growing industry.
Signing Off:
That wraps up today's report. Remember, the world of crypto is ever-evolving and
unpredictable. Always conduct thorough research and exercise caution.
Crypto, Distilled
Disclaimer:
Note, the author(s) of Crypto, Distilled may hold NOIA at the time of writing.
All content is for informational purposes only and should not be considered financial
advice. For full details, see the disclaimer..
The opinions expressed here are solely my own and are intended for informational purposes
only. None of the content provided should be considered financial advice.
Before making any investment decisions, you should seek advice from your financial, tax,
or legal consultant.
Cryptocurrency investments carry high risks; thorough personal research is essential.
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2/17/24, 6:24 AM Syntropy - #12 - by Crypto, Distilled

Welcome to the 12th edition of Distilled Deep Dives!

Yet, transitioning to Web3 introduces a critical hurdle: ensuring real-time data

Daily transactions on the blockchain of Bitcoin (Source: Statista)

(ii) US Blockchain Data Market: Poised For Explosive Growth

Blockchain Technology Market (Source: Grand View Research)

(iii) Evolution Towards Decentralization:

Syntropy Is Redefining Data Access Like A Public Library (Source: Syntropy)

B. Navigating The Data Availability (DA) Challenge:

It becomes increasingly important as a blockchain grows in transaction volume, posing

Data Availability: What Is It? (Source: Avail)

Overcoming the DA challenge is vital as blockchain networks grow, directly addressing

The Scalability Trilemma Defined (Source: Michael Zochowski)

(ii) Innovative Approaches To DA:

C. Revolutionizing Infrastructure With DePIN:

This concept, while straightforward in theory—leveraging collective efforts for

Tapping into real-world demand – and building infrastructure with decentralized

Source: Messari: State of DePIN 2023

(ii) The Data Layer: The Heart Of DePIN

Source: Syntropy Docs

D. Enhancing DeFi And DEXs With Real-Time Data:

Data Quality for DeFi Smart Contracts (Source: Chainlink)

(ii) The Value Of Mempool Data:

Mempool data (Source: bloXroute)

(iii) Impact On Trading Strategies And Market Efficiency:

Below are some additional impacts:

3. Utility & Technology:

A. The Evolution Of Syntropy:

Source: US patent 11,271,851

(ii) Launch And Initial Strategy Of Syntropy Stack:

Geoffrey Moore’s “Crossing the Chasm” (Source: Smith House)

(iii) Pivoting Towards The Web3 Market:

Acknowledging DARP's success in cutting latency, Syntropy decided to focus on the

B. Pioneering The Data Availability Layer:

Syntropy 101 (Source: Syntropy)

(ii) Core Components Of Syntropy's Data Layer:

Syntropy's intriguing pivot to data availability (Source: David Atterman)

(iii) Key Functions Of The Platform:

(iv) Decentralization & Usability:

This decentralization is reinforced by tokenization, aligning incentives between

Source: Syntropy Docs

Despite Syntropy's well-rounded approach, the intensity of competition poses a

Syntropy's intriguing pivot to data availability (Source: David Atterman)

(ii) Syntropy's Competitive Edge:

With a diversified revenue model, Syntropy's DA layer is primed for economic

B. Addressing Centralized Provider Challenges:

C. Syntropy's Edge In Ethereum Data Delivery:

(ii) Study Methodology And Results:

Findings demonstrated Syntropy's excellence in performance, achieving notably lower

Syntropy surpassed the median latency of competitors by about 500 milliseconds,

Benchmarking Data Delivery and Latency on Ethereum (Source: Syntropy)

This collaboration demonstrated Syntropy's capacity to manage significant traffic

(ii) Network Optimization With Syntropy Stack:

DARP enabled real-time adjustments based on network conditions, offering Entain

Case study: Entain x FIFA World Cup (Source: Syntropy)

B. Syntropy & KYVE: Full-Scope Web3 Data On Cosmos

Syntropy's real-time data streaming on Cosmos, complemented by KYVE and Arweave,

(ii) KYVE Network's Role In Data Archiving And Validation:

It ensures decentralized validation and accessibility of past blockchain activities,

Source: Kyve Network Documentation

(iv) Syntropy's Real-Time Data Delivery Expertise:

This collaboration facilitates decentralized, peer-to-peer data streams, marking a

C. Strategic Collaboration With Morpheus AI Agents: