The FVM Imaginarium: Staking and Leasing Protocols
The launch of FVM on March 14, 2023 revolutionized the existing Filecoin ecosystem, unleashing the full potential of the open data economy. Below is a highlight of the projects that are building DeFi lending protocols on top of the Filecoin Virtual Machine.
Background and Context
Being a Filecoin Storage Provider requires dedication, time and effort. On top of purchasing hardware, running a full-stack datacenter, having technical expertise and sourcing clients to store data, Storage Providers must also pledge FIL as collateral to prove they will act in good faith and that their incentives are aligned with the rest of the Filecoin economy participants. The more storage capacity or data an SP plans to onboard to the Network, the more FIL is required by the protocol to secure that capacity or data. Ultimately, SPs are rewarded for their contributions of storing humanity’s most valuable information through the form of block rewards and storage contract deals (learn more about the SP value proposition here).
As the Filecoin Network has grown over the last 2.5 years, so has the demand for storage collateral that accompanies higher volumes of network throughput (i.e., more capacity and data onboarded). Early in 2022, programs were established to help Storage Providers access FIL for storage collateral, including collaborations between the Filecoin ecosystem and DARMA Capital, Anchorage, CoinList, PalladiumX, and more. These programs have been extremely successful in helping Storage Providers grow the Filecoin Network and we are grateful to each of those partners– to date, Filecoin SPs have locked ~140M FIL in pledge collateral.
Staking Protocols on Other Networks
Staking is still in its early days for web3. Some protocols that extensively utilize staking today to lock up tokens for their respective protocols include Cardano, Ethereum, Solana, and Polkadot. In other networks, staking provides an opportunity for validators on those networks to prove that they are good actors, as well as verify transactions on the Network. Let’s look at Ethereum as an example: validators are required to stake 32 ETH (today’s equivalent of ~$50K USD). When validators would like to participate in the Network, but do not have enough tokens to stake, other participants in the Network are allowed to stake their tokens with that validator through interfaces (e.g. Lido, Rocketpool) and ultimately contribute to the validator’s staked funds.
In the Filecoin Network, this works differently. Instead of validators, Storage Providers, or datacenters that are onboarding data capacity to store humanity’s most valuable information, are receiving the leased tokens.
Introducing Staking and Leasing on FVM
FVM allows developers to build new applications utilizing smart contracts and capitalizing on user programmability being available on the Filecoin blockchain, unlocking innovative ways to help Storage Providers access FIL for collateral. Specifically, FIL token holders will soon be able to contribute their own FIL to grow Storage Provider operations via specifically-designed smart-contract based protocols. These protocols will have their own set of criteria – likely consisting of on-chain data – for selecting Storage Providers to lease FIL to. The ability to more efficiently connect Filecoin Token Holders with Storage Providers could accelerate growth of data onboarded to the Network. Each of the upcoming protocols being built on the FVM to specifically enable leasing FIL to Storage Providers features different approaches. To learn more about the specific projects, please see the list below:
Disclaimer: the information below was directly provided by the third-party projects via the Filecoin Staking Project Listing Policy or gathered via the third-party team’s public announcements on social channels.
Bifrost is a non-custodial liquid staking solution that allows users to stake their FIL and receive vFIL (voucher FIL) in exchange. The solution will allow FIL holders to flexibly and efficiently stake FIL with SPs using vFIL. Bifrost is one of the largest cross-chain liquid staking protocols on Polkadot. Launching March 2023
Collectif DAO is a novel approach to Filecoin network collateral requirements that leverages a non-custodial liquid staking protocol built on FVM. Using Collectif DAO storage providers can cover their capital needs to grow the storage capacity. Launching April 2023
Ezil.Me is building a decentralized and capital efficient FVM Filecoin staking protocol designed to address the inefficiencies within the Filecoin network. The product will incentivize Filecoin Stakers and SPs to grow and secure the protocol. Launching June 2023
Filet will build on their existing decentralized staking service which is currently built on the Binance Chain. Since the launch in May, 2021, the Filet protocol has accumulated ~512K FIL in Total-Value-Locked (TVL) to-date via a multi-sig approach. Launching March 2023
FILL is a liquidity pool that will be implemented on FVM as a fully open-sourced, decentralized, algorithm-based lending platform. FILL facilitates an efficient market to connect FIL token holders with SPs who need to borrow FIL. SPs collateralize consensus pledge and locked rewards by transferring their beneficiary address to the FILL smart contract, rather than collateralizing fiat or other mainstream crypto currencies. Launching May 2023
Filmine acts as an infrastructure layer on Filecoin, providing compute and storage networks a shared layer of hardware resources to run workloads while retaining the ability to connect SPs with token holders through a liquid staking protocol. Filmine launched in March 2022. Smart Contract version launching March 2023
FilPlus lending is designed to bring data owners, data preparers, Storage Providers, and FIL Token Holders together in an effort to support the Fil+ ecosystem. The project will be enable direct FIL lending to SPs that are specifically storing Fil+ data Launching in April 2023
A decentralized and capital efficient FVM Filecoin staking protocol designed to address the inefficiencies within the Filecoin network. Incentivizing Filecoin Stakers and SPs to grow and secure the protocol. Launching April 2023
H2O data is creating psdnFIL, a wrapper for FIL to enable further token holder participation in the Filecoin ecosystem by pledging collateral with select SPs. The H2O team has previously built a similar wrapper for the OCEAN protocol (psdnOCEAN) which now holds 6.66% of total $OCEAN locked. Launching April 2023
HashMix has been facilitating Filecoin SP lending since 2021. Currently, 519K FIL tokens are locked in the pool. The HashMix team is planning to build a smart contract based solution to further provide FIL to SPs by more efficiently connecting them with token holders. Launching April 2023
MFIL DAO is a comprehensive solution for providing liquidity services to the Filecoin network, established and operated in the form of a decentralized autonomous organization “DAO”. MFIL brings together participants and stakeholders from across the entire Filecoin ecosystem and aims to break the problems of information asymmetry, low resource allocation efficiency, and poor asset liquidity, and provide liquidity solutions that maximize value for all participants in the entire Filecoin ecosystem. Launching March 2023
NodeDAO is a decentralized organization, formed by several larger institutions, that provides staking liquidity solutions. Previously, NodeDAO launched staking solutions for Ethereum and has now introduced a staking solution for the FIlecoin ecosystem, which is already live on Mainnet. NodeDAO aims to connect token holders with SPs via a decentralized platform in hopes of creating a more robust and efficient staking ecosystem. Currently live on Mainnet
stFIL is built by the FrogHub team, an active developer in the Filecoin ecosystem. stFIL is designed to be community owned, decentralized, and trustless, while enabling storage provider growth. Launching April 2023
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