Abstract: A system and associated method for replicating data based on capacity optimization. A local node receives the data associated with a key. The local node within a local domain communicates with nodes of remote domains in a system through a communication network. Each domain has its own distributed hash table that partitions key space and assigns a certain key range to an owner node within the domain. For new data, the local node queries owner nodes of domains in the system progressively from the local domain to remote domains for a duplicate of the new data. Depending on a result returned by owner nodes and factors for replication strategies, the local node determines a replication strategy and records the new data in the local node pursuant to the replication strategy.