Cipholio Research | Comparative Study on Blockchain Node Services
Author: Kevin Hao (Analyst) from Cipholio Ventures
lockchain is a distributed database. The transaction information on the chain is recorded in the public ledger. Any node running in the blockchain system can obtain the transaction information of the whole network. However, indexing and accessing the on-chain data requires special interfaces and programming, which is inconvenient for developers and users who are new to the blockchain.
Professional data service providers can solve this problem. According to service types, data service providers can be divided into node service providers, data index service providers and data analysis service providers.
Node service providers run blockchain nodes to save users’work of establishing and running nodes, such as Blockdaemon, Quicknode and Alchemy. The data index service provider parses and formats the on-chain data to facilitate users’ data query and indexing, such as Dune Analytics and The Graph.
Data analysis service providers (e.g. Glassnode, Coin Metrics and Defi Llama) provide on-chain datasets or APIs to facilitate data analysis for users. This article mainly makes a comparative study on node service providers.
I. Positioning of Node Service Providers in the Ecosystem
Developers can interact with blockchain in different ways. One is to build and maintain blockchain nodes by yourself, and the other is to use nodes provided by node service providers.
For developers who are new to the blockchain, it is very tedious to build and maintain their own blockchain nodes. Running a full node means that the whole network ledger needs to be copied, which means a very large storage space will be required and occupied.
Full nodes need hundreds of GB or even more storage space. It may take several days to synchronize the main network data for the first time. In addition, the personal running node also needs to consider security issues. In the process of starting the node, many problems may occur, such as object error for node connection, not updated to the latest software version, the computer size can’t meet the network requirements, etc.
Node service providers can provide users with node deployment and maintenance services. Their positions in the whole blockchain ecosystem are shown in the figure below.
1. Basic information
Blockdaemon is a blockchain node infrastructure platform used to pledge, expand and deploy nodes with enterprise level of security. Blockdaemon supports more than 50 blockchain networks, including Eth2, Bitcoin, Solana, Terra, Polkadot and Cosmos. Blockdaemon provides a variety of node services, such as full node, light node, staking node and validating node.
Blockdaemon has more than 70 access points on cloud servers around the world, which can ensure smooth usage for its worldwide users. Meanwhile, Blockdaemon also creates scalable blockchain solutions for enterprises through API, HA cluster, automatic decentralization and automatic repair of nodes.
Blockdaemon is widely used by exchanges, hosting platforms, financial institutions and developers to interact with blockchains. Through this platform, more than 3.8 billion transactions are made every day.
For investors who want to participate in staking, Blockdaemon offers them the service of staking nodes. Currently, Blockdaemon manages more than 500 validating nodes on different blockchains and stakes more than $10 billion in assets. Meanwhile, Blockdaemon has 24/7 manual and automatic monitoring to deliver users timely and effective services.
For developers, Blockdaemon provides developers with load balancer nodes and high-performance APIs that support multiple chains. Developers can easily and quickly access blockchain data through protocols supported by Blockdaemon.
The security of Blockdaemon is embodied in four layers of risk mitigation, including distributed data centers across 11 cloud service providers, fault supervision of engineering teams, high reliability of hardware facilities and fault tolerance of nodes.
2. Well-known users
Blockdaemon’s well-known users are illustrated in the image below, such as Blockchain.com, Paradigm, BlockFi and Ledger.
For different blockchains, the prices of node services provided by Blockdaemon are different, and the price range is distributed in hundreds of dollars.
For the API, Blockdaemon charges hierarchically according to the usage of users.
3. Historical Financing
- In May 2020, a $5.5 million venture round was closed. Investors include Hashkey, CoinShares, Blockchain.com, Kenetic, SPiCE VC, and Fenbushi Capital.
- The series A was completed in June 2022 and finished off with US $28 million funding. It was led by Greenspring Associates and participated by Goldman Sachs.
- In September 2021, it completed series B financing of US $155 million with a valuation of US $1.3 billion. Softbank Vision Fund 2 led the round, Matrix Capital Management, Sapphire Ventures and Morgan Creek Digital, and the seed investors Boldstart Ventures, Goldman Sachs, Greenspring Associates, Kenetic, Kraken Ventures, Borderless Capital and other companies participated in the investment.
- In January 2022, it completed series C financing of US $207 million with a valuation of US $3.25 billion, led by Sapphire and Tiger Global, and participated by Softbank Vision Fund 2, Boldstart Ventures, StepStone Group, Matrix Capital Management, Lerer Hippeau and Galaxy Digital.
1. Basic information
QuickNode provides node deployment services for users. Developers who build their own blockchain nodes need to solve more problems such as security issues, versioning issues and storage issues, QuickNode can solve these problems by providing full nodes.
Unlike other node providers, QuickNode offers dedicated nodes to users instead of shared public nodes. At the same time, QuickNode is optimized for performance, speed and flexibility.
Dedicated nodes only accept DApp calls from users, which can provide better blockchain access performance for users. QuickNode supports 8 different regions, which helps optimize network call times. quickNode supports almost all popular ethereum test networks, which gives developers full flexibility in choosing their preferred test network for DApp testing. QuickNode also offers Parity archiving nodes. Recently, QuickNode supported the verification of Twitter’s NFT digital ownership.
QuickNode currently supports 11 blockchain networks, as seen below.
2. Well-known users
In total, QuickNode serves over 50 billion requests per month. Major users include Paypal, Chainlink, nansen and Dune Analytics, among others.
QuickNode offers several different tiered fee models, depending on the usage requirements. The lowest tier is $9 USD but has relatively few features and the number of responses included. There are also $99 and $299 per month with more responses and features. There is also an enterprise level service at the top.
3. Historical financing
- According to Crunchbase information, QuickNode had angel funding rounds in 2018 and 2019, but there is very little information disclosed online.
- In May 2021, a $5.3 million seed round was closed, led by Seven Seven Six with participation from Softbank, Arrington XRP Capital, Crossbeam.vc, Hashkey Capital and Tribe Capital.
- In October 2021, it closed a US$35 million Series A round of funding led by Tiger Global with participation from Seven Seven Six, Soma Capital, Arrington XRP Capital and Crossbeam.vc.
1. Basic Information
Alchemy is a Web3 development platform dedicated to simplifying blockchain development. Alchemy can be understood as the AWS of the blockchain ecosystem. In Web2, developers can rent AWS to avoid a series of problems such as server maintenance and operation and maintenance. Alchemy also provides a decentralized architecture for developers to interact with the blockchain, greatly reducing the development and operation and maintenance work for developers to interact with the blockchain.
Alchemy has built a suite of developer tools, enhanced APIs and a superior node infrastructure to make it easier for users to build and run blockchain applications.Alchemy offers four products to users: Alchemy Supernode, Alchemy Notify, Alchemy Build and Alchemy Monitor.
Alchemy Supernode is the most widely used ethereum API, with all the features of a node, and high reliability, data accuracy and scalability. Alchemy Monitor collects and discovers critical information about the state of your application, providing developers with a detailed real-time reporting system to alert them to anomalies so they can identify and resolve problems in a timely manner.
In addition to the main services, Alchemy offers a wide variety of other services such as development solutions, integrated monitoring dashboards, Web3 push services and more.
Alchemy’s website shows that it currently supports blockchain ecosystems such as ethereum, crypto.org and Flow.
2. Well-known users
Notable users of Alchemy include Dapper Labs, SushiSwap, dYdX and OpenSea.
Alchemy’s fees are divided into several different tiers. The lowest tier is a free trial with relatively few features. The chargeable tier is $49 per month. The highest has an enterprise level service.
3. Historical financing
- According to Crunchbase information, Alchemy raised a venture round in April 2019, but there are few online disclosures and the amount was not high.
- In December 2019, a $15 million Series A round was closed with institutional investors including Pantera Capital, Stanford University, Coinbase, Mayfield, SignalFire, Samsung, StartX and Kenetic, and individual investors including John Hennessy (Google), Jerry Yang (Yahoo) and Reid Hoffman (LinkedIn).
- In April 2021, a Series B funding round of US$80 million was completed, led by Coatue and Addition.
- In October 2021, it closed a US$250 million Series C round of funding at a valuation of US$3.5 billion, led by Andreessen Horowitz with participation from Lightspeed, Redpoint, Coatue, Addition, DFJ and Pantera.
- In February 2022, a $200 million equity round was closed at a valuation of $10.2 billion. Lightspeed and Silver Lake led the round, with participation from Andreessen Horowitz, Coatue, Addition, Pantera and DFJ.
These three projects offer very similar services, all of which help developers deploy nodes and save developing resources. There are many similar projects in this track, and in addition to the three projects mentioned above, there are also star projects Infura, as well as Moralis, Tatum, and others. A comparison of Blockdaemon, QuickNode and Alchemy is shown in the table below.
1. Products and services
Financial organizations, hosting platforms, and developers are among Blockdaemon’s main users. Blockdaemon provides customers with a wide range of tools to choose from, including access to trade nodes, pledges, hosting APIs, liquidity alternatives, and high availability clusters. Blockdaemon’s future ambitions include strategic acquisitions. It purchased Gem, a bitcoin API company. Blockdaemon will employ Gem’s solutions, such as the Onramp solution, Connect API, KYC Passport, and so on. At the same time, Blockdaemon is establishing a DeFi fund to reinvest earned funds in institutional-grade DeFi products, with the goal of providing CeFi solutions to its “more regulatory-minded clientele.”
Blockdaemon has better experience and capabilities when it comes to asset pledging. Blockdaemon and Stakewise have established a cooperation to improve liquidity pledges and together provide KYC-based liquidity pledge solutions for financial institutions and major technological enterprises.
QuickNode provides dedicated nodes to users instead of shared public nodes. Dedicated nodes only accept DApp calls from users, which can provide better blockchain access performance for users. QuickNode provides products such as tracking mode, archiving mode, and NFT acquisition tools.
Recently, QuickNode supports verifying Twitter’s NFT digital ownership, and will provide more services in the NFT field in the future.
Alchemy presently provides infrastructure and tools to facilitate the use of blockchains such as Bitcoin and Ethereum. Alchemy provides developers with JSON-RPC APIs that are backed by a new architecture that enables major improvements in API stability, scalability, and consistency, as well as a number of tools that facilitate development. Alchemy will eventually support blockchains such as Polkadot, Dfinity, and Cosmos.
Alchemy provides developers with a complete toolkit that enables them to easily solve a wide variety of challenges. Simultaneously, Alchemy’s developer program actively seeks out more challenges in the field and rapidly develops solutions. Developers place a premium on comprehensive usage guidelines and prompt responsiveness to community demands.
2. Support for ecology
Node service projects are a subset of middleware projects that can contribute significantly to the development of both the underlying public chain and the higher layer applications, but are not dependent on the development of any specific public chain or application.
The creation of any public chain or application should theoretically contribute to such endeavors. Simultaneously, node service providers will collaborate with other data service providers to provide services for querying and analyzing higher-level data. For instance, QuickNode may offer Dune Analytics with node services.
Blockdaemon supports substantially more blockchain networks than QuickNode and Alchemy, and hence has an edge in this area. It’s worth noting that Blockdaemon’s primary function in many blockchain ecosystems is to provide pledge services.
3. Well-known users
If the goods and services given by node service providers do not match the standards, even if just a few faults occur, they will impair the regular operation of the projects in the ecosystem, and well-known projects will cease to work with such node service providers. The quality of node service providers may be determined in reverse from the degree of ecological consumers.
Blockdaemon, QuickNode, and Alchemy all have a sizable user base. This indicates that each of the three initiatives has been acknowledged for its stability and dependability. By comparison, well-known users in the Blockdaemon ecosystem are most capital management platforms and CeFi projects; well-known users in the QuickNode ecosystem are data indexing and analysis service providers; and well-known users in the Alchemy ecosystem are more DeFi and DApp projects.
The three initiatives have not published much information about their market share, revenue, or other metrics, instead relying on broad assertions about user numbers, such as millions. QuickNode has not made much information publicly available in this area, however they have lately increased their emphasis on the project’s API’s low latency.
Blockdaemon, QuickNode, and Alchemy all charge similar fees. When speaking with developers, it became clear that pricing is not their primary consideration when selecting a node service provider.
4. Valuation & Financing
Node service providers do not have much financing until 2021, but beyond that year, numerous institutions begin to invest in projects in this area. Furthermore, the investment institutions engaged are not entirely from the blockchain industry, but rather from the traditional financial sector. This corresponds with the growth of blockchain’s influence after 2020, when it begins to gain traction in the mainstream financial sector.
These institutions may be uninterested in blockchain-native application-based projects like DeFi and GameFi, but they are quite positive on middleware projects like node services. Such ventures, in their opinion, are akin to the AWS of the Internet and have enormous market potential.
Currently, Blockdaemon and Alchemy have both raised several hundred million dollars at valuations of $3.25 billion and $10.2 billion, respectively, and QuickNode has only raised $40 million so far. Considering that QuickNode is not significantly disadvantaged in all aspects, QuickNode’s next round of funding will also have a significantly higher valuation.
The compliance of data has little impact in this track. The data provided by the node service supplier are all public data on the chain, and no privacy and infringement issues are involved at this level. Users of the service use these for collation and analysis, which theoretically has little to do with the service and does not require further compliance.
However, these node providers are subject to legal regulation in their locations (primarily the United States). Recently, users in certain regions were unable to use MetaMask wallet because MetaMask’s node service provider Infura suspended access to users in these regions based on regulation. Centralized regulatory issues can reduce users’ confidence in node providers to some extent.
Disclaimer: This research article is opinion/insights only, it should not be viewed as financial or investment advices in any form. Readers are advised to do their own research and analyze the market on their own.