State of Sia Q4 2024

Key Insights

• Sia’s V2 hard fork is scheduled to activate on June 6, 2025, introducing usability and performance improvements to its blockchain and storage network.
• Sia saw increases across various metrics in Q4, including network revenue (+28.70%), SC price and market cap (+11.57%), new contracts (+3.82%), and download bandwidth costs in SC (+8.68%).
• In contrast, Sia also saw declines in used storage (-14.29%), storage utilization (-14.63%), active contracts (-6.93%), upload bandwidth costs in SC (-2.30%), and total transactions (-5.94%).
• The Sia Foundation adhered to EU MiCA regulations and released renterd v1.1.0 and hostd v2.0.0-alpha.4, preparing for the Sia V2 hard fork (Utreexo).
• The Sia Foundation approved $161,780 for six projects: Dartsia Mobile App V2, Lume Web 2025, SiaQL, SiaGraph #2, Proxmox Backup Cloud Extension, and Sia Virtual Block Device (sia_vbd) - improving Sia’s mobile tools and developer ecosystem.
• Previously funded projects like Sia NFS Gateway, Fabstir Web3 Media Player, and SiaGraph achieved various milestones, expanding Sia’s functionality and adoption.

Primer

Sia is a decentralized cloud storage network that combines a Proof-of-Work (PoW) blockchain with a contract-based storage model. Storage contracts uphold storage agreements between hosts (storage providers) and renters (storage consumers). Renters define the amount of data to be stored, the timeframe for storage, and the price. As users and storage providers enter into storage contracts, they deposit the native asset — Siacoin (SC) — into an escrow account. Storage providers must cryptographically prove they are hosting the required data, and if they do not uphold the storage contract, their collateral is slashed. At contract expiry, the storage provider receives most of the escrowed funds, with a small portion (3.90%) going to holders of Siafund (SF) tokens. Siafunds are security tokens that accrue SC to the SF holder from finished contracts on Sia.

Sia facilitates a global data storage marketplace by connecting storage providers with underutilized hard drive capacity to storage consumers. Siacoin can be used to pay for gas on the Sia blockchain and as the medium of exchange for the storage market. Renters pay a storage fee, upload/download bandwidth prices, and gas to create storage contracts. Files stored on Sia are encrypted via ChaCha20 and stored redundantly via Reed–Soloman Erasure Coding. Encryption ensures that uploaded files remain private, and redundancy ensures security by sharding files. Files uploaded to Sia are split into 30 shards, or chucks, and sent to various hosts. Only 10 shards are required to rebuild the file, and their copies are re-duplicated to new hosts whenever one is offline. For a full primer on Sia, refer to our Initiation of Coverage report.

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Key MetricsPerformance AnalysisTransactions and New Contracts

New storage contracts are a measure of the origination of active storage contracts. New contracts require renters to allocate funds (called allowances) in advance. These allowances determine how much SC the renters are willing to pay for storage on Sia. The allowance is derived by multiplying the price in SC per TB stored by the expected number of TBs and by the expected number of months for storage. For example, if a user wanted to store 3TB of data for three months at 500 SC per TB, their allowance would be 4,500 SC (3x3x500).

Renters also pay contract formation and upload bandwidth fees when creating new contracts. Hosts must lock up collateral, which can be slashed if they do not uphold the contract agreement.

Transactions on Sia account for all activity related to storage contracts, peer-to-peer transfers, and trades of the SC token. New contracts lead to various types of onchain transactions, such as contract initiation payments, bandwidth payments, and ongoing storage payments. For this reason, transaction count tends to be influenced by initiating new contracts.

In Q4, average daily new contracts increased ~3.82% QoQ and ~82.51% YoY. However, average daily transactions declined ~5.94% QoQ despite a ~63.59% YoY increase. This suggests that other types of transaction activity, such as renewals, declined relative to the growth in new contracts.

At face value, the rise in new contract initiations aligns with the continued improvement of Sia's renterd and hostd modules discussed below in the qualitative analysis section.

Active Contracts

When a contract is active, it automatically facilitates the exchange between escrowed SC and storage provided by hosts.

Average daily active contracts declined for the second consecutive quarter, dropping ~6.93% QoQ and down ~7.99% YoY. This may indicate that contracts initiated earlier in the year had shorter durations or that renters did not renew existing contracts at the same rate as new contracts were being created.

Storage Utilization

While a storage network's capacity helps highlight its current scale, its utilization rate reveals the demand for the type of storage it optimizes for. Sia operates in the hot storage market, primarily targeting developers. It's favored by those searching for a decentralized storage system offering privacy and fast retrieval.

Storage demand on Sia flows through storage contracts, incentivized by its Stake-for-Access (SFA) token model. For this reason, storage demand is closely linked to active contracts.

Specifically, in Q4, used storage declined ~14.29% QoQ, though still up ~67.80% YoY. Storage utilization rates dropped ~14.63% QoQ and ~8.21% YoY, reflecting a decrease in efficiency relative to capacity.

While active contracts declined ~6.93% QoQ, despite a ~3.82% increase in new contracts, the reduction in storage metrics suggests that a significant number of existing contracts expired or were underutilized.

Storage Prices

Renters entering a storage contract on Sia pay multiple fees to set up and maintain the contract. Storage fees are based on the amount of data uploaded, the length of the contract, and the price in SC per TB per month.

As Sia’s used storage declined in Q4, average storage costs measured in SC increased by ~9.65% QoQ and ~41.74%YoY, while average storage costs in USD rose ~36.68% QoQ, yet remained up only ~1.24% YoY. The rise in USD-denominated storage costs reflects the ~119.01% jump in the SC price during the quarter – as shown in the market cap analysis section.

This rise in both SC and USD-denominated costs aligns with the overall decline in storage utilization in Q4, which suggests that the higher costs affect renters' storage behavior.

Bandwidth Costs

Storage providers offload the costs of uploading and downloading the renter’s data to the individual renter. Users seeking to store data on Sia initially pay upload fees to hosts, and users seeking to retrieve uploaded data pay download fees to hosts. In both cases, bandwidth is priced per TB.

Bandwidth costs denominated in SC moved in opposite directions during Q4: upload costs dropped ~2.30% QoQ and ~61.54% YoY, while download costs increased by ~8.68% QoQ and ~27.31% YoY.

The drop in SC-denominated upload costs made storage contracts more affordable for renters already holding SC, potentially supporting storage activity during the quarter. Conversely, the rise in SC-denominated download costs reflects increased demand for data retrieval services.

In USD terms, upload costs mirrored their SC-denominated decline, falling ~2.30% QoQ and ~72.51% YoY, while download costs rose ~8.68% QoQ, yet remained down ~9.07% YoY.

Network Revenue

Sia produces revenue for multiple parties: hosts, miners, and Siafund (SF) holders. Its network revenue is the sum of payouts to hosts, Siafund fees, miner fees, and burned collateral. Burned collateral is included in revenue because burning SC makes it more scarce, accruing value to SC holders.

Despite declines in storage demand (~14.29% QoQ) and active contracts (~6.93% QoQ), network revenue grew ~28.74% QoQ to reach $154,509 in Q4. This growth can be attributed to the ~9.65% increase in SC-denominated storage costs, the ~8.68% rise in SC-denominated download costs, and the ~11.57% increase in SC’s price during the quarter.

While improvements to hostd and renterd modules may have supported operational efficiency and user adoption, the primary driver of revenue growth appears to be higher SC prices and increased SC-denominated costs, rather than an expansion in overall network activity.

Market Cap

Relative to BTC and ETH benchmarks, which saw their market caps grow ~48.00% and ~28.30% QoQ, respectively – SC’s market cap increased ~11.57% QoQ to ~$570 million. Its market cap rank, however, fell from 181 in Q3 to 272 in Q4, reflecting a decline in its relative positioning within the broader crypto market. SC’s price similarly rose ~11.57% QoQ to ~$0.09.

As a recap, despite this, upload costs denominated in SC dropped ~2.30% QoQ, potentially making storage contracts more affordable for renters already holding SC. For these renters, the reduced SC-denominated costs may have mitigated the impact of rising USD-denominated costs, which increased ~8.68% QoQ for download bandwidth and ~36.68% for average storage costs. However, renters purchasing SC at the higher market price during the quarter – driven by the ~11.57% QoQ increase in SC price – faced steeper USD costs for both storage and bandwidth. This dynamic likely contributed to the decline in storage demand (~14.29% QoQ) and active contracts (~6.93% QoQ), as rising dollar costs for new renters offset benefits from reduced SC-denominated costs for existing users.

While Sia’s product updates, including hostd and renterd module enhancements, improved operational efficiency and user experience, these developments were insufficient to counterbalance the impact of higher USD-denominated costs on overall network activity.

Qualitative AnalysisRegulation

In Q4 2024, the Sia Foundation published new sustainability metrics in compliance with EU MiCA regulations, ensuring Siacoin (SC) remains accessible on EU exchanges.

Software Updates

Sia modules renterd and hostd saw incremental upgrades that improved the network’s storage performance, usability, and reliability.

• For renterd, these upgrades included (i) refining host scanning and pricing mechanisms, (ii) a new download algorithm ensuring data retrieval from all contracted hosts, and (iii) API restructuring to support V2 enhancements. Its UI added advanced features (e.g., batch file management), while backend updates transitioned consensus.db to blockchain.db for improved data integrity and efficiency, marking a key milestone with the release of renterd v1.1.0.
• For Hostd, the release of v2.0.0-alpha.4 (i) streamlined RHP settings in the config manager via RHP4 and (ii) introduced command palette access for more straightforward navigation across platforms. Furthermore, updates to Walletd improved balance refresh rates and address generation, while explored added V2 transaction support, host announcements, and robust API testing.

These updates collectively advanced Sia’s ecosystem, setting the stage for the upcoming V2 hard fork launch (Utreexo), its most significant upgrade since its mainnet launch in 2014 – scheduled to activate on June 6, 2025. Among other proposed improvements to Sia, this upgrade will primarily replace its traditional UTXO database with a cryptographic accumulator, reducing the initial sync time for nodes. This modification will scale Sia’s data storage and consensus code, enabling full nodes to run on smartphones, embedded devices, or browsers.

Ecosystem Grant Update

The Sia Grants Program introduced several updates to improve compliance and streamline the review process, including (i) a public list of restricted countries requiring applicants to affirm eligibility upfront, (ii) new grant categories with monthly payment caps to distinguish between Standard and Large grants, (iii) proposal templates addressing country restrictions and progress report templates emphasizing pre-funded accounts and credentials for smoother onboarding, and (iv) an FAQ outlining ineligible project types to guide applicants toward feasible, impactful proposals.

Furthermore, the Sia Foundation continues to support ecosystem growth through its grant program, which has approved ~$1.8 million in total funding since its inception. Grants are decided biweekly by a committee of three foundation employees and three community members.

In Q4’24, the foundation approved $161,780 in grant funding, marking its highest funding quarter in 2024. Specifically, they approved the following six projects:

Dartsia Mobile App V2 - $41,250

The Sia Foundation approved $41,250 for James Brel Tamegno and Egoume Mouyong Rekiyatou to develop Dartsia Mobile App V2. This app allows mobile users to securely access and interact with renterd nodes within the Sia ecosystem. The team plans to enhance V1 by adding a file encryption feature, a phone file backup feature similar to Google Drive, notification functionality, a file viewer compatible with various file types (e.g., documents and videos), and an SQLiteDB backup system for the renterd server.

Lume Web 2025 - $73,000

The Sia Foundation approved $73,000 for Hammer Technologies LLC to advance Lume Web, a Layer-2 solution for decentralized storage built atop the Sia network. Key 2025 goals include: Anti-Abuse Plugin, Bluesky Integration Plugin, Nostr Integration Plugin, LBRY Integration Plugin, Cloud Import Integration Plugin, IPNS Support, and a Community Portal.

SiaQL - $18,000
The Sia Foundation approved $18,000 for Mert Köklü to develop SiaQL, a GraphQL interface designed to unify interactions with Sia's core components: hostd, renterd, and walletd. By consolidating these separate REST APIs into a single GraphQL layer, SiaQL aims to streamline complex queries and improve developer efficiency. The project will deliver a command-line interface (CLI) application that launches a local GraphQL server, complete with a built-in editor and comprehensive documentation.

SiaGraph #2 - $4,730
The Sia Foundation approved $4,730 for CtrlAltDefeat to enhance SiaGraph, a website offering data and insights into the Sia network. Building upon previous work, this grant focuses on expanding functionality and usability by introducing features such as renting statistics, tokenomics data, a host troubleshooter for on-demand testing, and lastly, a complete backend rewrite to facilitate easier data collection and the integration of new metrics.

Proxmox Backup Cloud Extension (Continuation) - $16,800

The Sia Foundation approved $16,800 for A-Z Computer Solutions to continue integrating Proxmox Backup Server (PBS) with the Sia network. This phase focuses on refining the existing cloud backup module, enhancing the functionality of the Sia renterd plugin, and conducting robust testing to prepare for a public beta release. The project aims to increase data stored on the Sia network by leveraging Proxmox backups, offering a reliable off-site backup solution that adds redundancy for disaster recovery scenarios.

Sia Virtual Block Device (sia_vbd) - $8,000
The Sia Foundation approved $8,000 for Roland Rauch to develop sia_vbd, a virtual block device implemented on top of renterd. This project introduces location-independent, scalable virtual disks with features like deduplication, compression, snapshots, and branching, fully backed by Sia objects. Available as a standalone binary and Docker image, sia_vbd adds block storage to Sia's existing object and file system storage options, offering users greater flexibility to choose the most suitable storage type.

Development Milestones

Throughout Q4 2024, previously funded projects also achieved various development milestones, including:

• Sia NFS Gateway (sia-nfs) achieved all grant milestones, with funds distributed in November.
• Proxmox Backup Server Cloud Extension refined middleware for Sia integration, optimized the cloud backup API, enhanced security, improved the UI, and prepared pre-release documentation.
• Sia SMB Mounts implemented SMB2 protocol features, supported multiple renterd instances, resolved bot protection issues, and conducted public testing.
• Fabstir Web3 Media Player #2 added scalable infrastructure, encrypted Sia-based storage, decentralized subscriptions, and a digital handshake system for contracts.
• HTLC Upgrade for Sia for use in Atomic Swaps finalized the Sia Rust library, deployed a web wallet demo, transitioned to the Anagami testnet, and updated SpendPolicy validation for Sia V2, with funding fully distributed in December.
• Lume Web 2024 fixed dashboard bugs, redesigned the portal frontend, refactored the config system, added RBAC permissions, launched an Akash provider for workloads, developed Docker images, and improved cluster-related support.
• S5 Network 2024 developed a TypeScript/JS library for the Vup Web app, introduced a blobsum utility for S5 Blob Identifiers, secured the s5.pro domain, and initiated a UI design language with Storybook.
• Passkey Holder transitioned from Node.js to a browser environment, streamlined registration and authentication, integrated decentralized passkey storage with renterd, and enhanced WebAuthn support.
• Tiri Vault integrated browser extension features, added a "Sync" menu for directory synchronization with private Sia storage, expanded file management capabilities, and implemented API endpoints for data replication.
• SiaGraph added a private beta environment, created API endpoints, rewrote the website for modularity, launched a public Explored node at explorer.siagraph.info, and designed a system for creating renterd nodes and collecting statistics.

Closing Summary

Sia showed resilience in Q4 2024, with network revenue rising ~28.70% QoQ to $154,509, despite declines in active contracts (~6.93% QoQ) and used storage (~14.29% QoQ). Relative to ETH and BTC benchmarks, which saw market cap growth of ~28.30% and ~48.00% QoQ, respectively, SC’s market cap increased ~11.57% QoQ to ~$570 million. Despite this, its market cap rank fell from 181 to 272, highlighting underperformance relative to the broader crypto market.

Sia released significant software updates, including (i) renterd v1.1.0, (ii) hostd v2.0.0-alpha.4, and (iii) advanced preparations for its V2 hard fork (Utreexo), its most significant upgrade since 2014. Ecosystem grant funding hit a quarterly high of $161,780, supporting Dartsia Mobile App V2, Lume Web 2025, SiaQL, SiaGraph #2, Proxmox Backup Cloud Extension, and Sia Virtual Block Device (sia_vbd). With these developments and plans for further upgrades, Sia is well-positioned to improve its utility, scalability, and standing in the decentralized storage market in 2025.