When CoinFund released our NFT investment thesis in 2020, our vision was predicated on an assumed ease of decentralized data access and storage for developers. Yet two years later, like most nascent categories, the evolution of web3 tooling has not been linear; despite an explosion in NFT projects we estimate that only 9% are stored on-chain, partially due to the gap in web3 for straightforward data manipulation with permissionless and composable SQL/relational models. To help meet this need, today CoinFund announced that we recently led an investment in Tableland (formerly Textile), a decentralized database that utilizes SQL for structured data, enabling developers to build complex relational models for NFTs, decentralized games and dapps. I will also be joining Tableland’s Board of Directors.

In Tableland, tables are on-chain assets that can be grouped into data models with customizable permissions and smart-contract integrations. These permissions grant write access for developers to have the power to create, insert and query data in web3. By making the database layer more composable and web3 native, Tableland is introducing practical data management for applications. An early study on Ethereum shows just how cost prohibitive trying to ‘write’ to a blockchain layer 1 really has been: over 14,000x more expensive than web2. In recent years IPFS has brought drastic improvement to the web3 ‘storage cost’ reducing it to $0.00019 gb/mo compared to AWS at $0.00099 gb/mo, which makes the web3 storage solution 5x cheaper according to calculations run with data from file.app. Now the same must be done for ‘write,’ for data to become operational, dynamic and real time.

With the rise of NFTs and the need for mutable metadata, the majority of developers moving to web3 from web2 who want to innovate need familiar tools. Developers know and love the SQL language. Tableland chose to start with SQLite due to its feature completeness and technical design which is suitable for building a network with highly portable data, and can scale to the needs of today and tomorrow’s web3 use-cases. The upcoming release of Tableland Studio is a powerful tool that will help developers create and manage new projects built on the Tableland database by connecting data with smart contracts, working with collaborators, and integrating other protocols such as IPFS, Filecoin, ENS, and more into their app design. The Studio will enable developers to go from ideas to deployed prototypes in minutes, which will help speed up the development of new applications on the Tableland network.

The Tableland team, led by Andrew Hill and Sander Pick, has an exceptional background in distributed systems and big data. They have known each other for 13 years and started working on IPFS infrastructure in 2018, developing six products including ThreadDB, a P2P NoSQL database on IPFS. However, they concluded that this approach was not suitable due to timing, lack of infrastructure, and a difficult business model. Tableland has therefore taken a clean slate approach and is well-positioned to tackle the challenge of building a new permissionless protocol for storing composable data on-chain.

The global market for database management services in web2 was $82.5B in 2021 and is expected to reach $235B by 2027 with a 14% CAGR. Tableland aims to become the standard for on-chain data and provide infrastructure for managing database services. The web3 DBMS market is currently valued around $12.3B, largely driven by Filecoin. Projects using Tableland are already willing to pay for its structured storage. We believe there will be a premium for certain datasets that become heavily relied upon by multiple parties vs. the legacy data structures that are usually controlled and provisioned by only one party. Therefore over time, as data sovereignty and reliable datasets are created, they become structuring layers for many smart contracting use cases and settlements. We believe that these open data structures will be much more powerful and valuable than their closed and private counterparts.

Relational DBs are the most widely used today and they are found in every Android, iOS and iPhone device, Mac, Windows machines, several browsers and in most major apps. Tableland’s focus on SQL-based decentralized query protocols aims to provide a unified datastore without schemas, which is useful for indexing data written to the chain. While early, Tableland has already achieved some market evidence to support their thesis, such as partnerships with cohorts of developers building products with the beta version of Studio. The product roadmap slots in nicely to the broader advances in data infrastructure for web3 with the recent announcement of FVM (Filecoin Virtual Machine) mainnet launch. FVM makes smart contracts and user programmability possible and unlocks the potential of an open data economy, enabling developers to orchestrate data placement, governance, and monetization on open markets. The fact that Tableland is already integrated with multiple blockchains, including Ethereum, Polygon, Arbitrum, and Optimism, with Filecoin FVM integration on the horizon, demonstrates the versatility and effectiveness of its solution across various blockchain ecosystems. To add to the scope of the ambition, Tableland’s network of validators will coordinate and validate the data’s ownership, security, and access control on the host chains.

Simply put: we cannot have fully decentralized apps without an open source, permissionless cloud database. While I’m surprised dApps have come this far with a mix of static data, oracles and basic storage, real database solutions are crucial to unlocking their full potential. To break down the walls of web2 silos, we must architect technological solutions to intermediate the data currently monopolized by incumbent solutions. Allowing developers to coordinate around mutable data with immutable rules will vastly expand the design space for smart contracts and applications, enabling them to develop new use cases utilizing web3 infrastructure. Looking to the future, we anticipate a groundswell of basic tooling, such as AI and computation, that will be leveraged by smart contracts. Tableland checks many boxes as CoinFund helps define and support a world-class web3 developer experience, and recognize the need for infrastructure investment to support the next generation of builders who are poised to transform the industry. We’re proud to back this exceptional team.

You can read more about their announcement on Businesswire, Coindesk and the Tableland blog.

The views expressed here are those of the individual CoinFund Management LLC (“CoinFund”) personnel quoted and are not the views of CoinFund or its affiliates. Certain information contained herein has been obtained from third-party sources, including from portfolio companies of funds managed by CoinFund. While taken from sources believed to be reliable, CoinFund has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; CoinFund has not reviewed such advertisements and does not endorse any advertising content contained therein.

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by CoinFund. (An offering to invest in a CoinFund fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by CoinFund, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by CoinFund (excluding investments for which the issuer has not provided permission for CoinFund to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://www.coinfund.io/portfolio.

Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.