After the announcement of the launch date of Filecoin, I think the veterans who have been waiting for a long time may breathe a sigh of relief: "Three years, three years, do you know how I got here in these three years?" No matter how many controversies have occurred around Filecoin , especially in the field of Filecoin mining machines where fish and dragons are mixed up, and Comrade Song Jiang’s "Declaration on Discussing Filecoin" directly pointed out that Filecoin is a centralized network. This statement also caused a lot of waves.

In addition, the fork of Filecoin is also hidden or visible. At this year's Xiamen World Mining Conference, MIX Chairman Han Weiping stated: "IPFS wants to achieve data privacy and permanent storage, but Filecoin is gradually deviating from this original intention."

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Filecoin Introduction and History

When it comes to Filecoin, you have to talk about IPFS. Filecoin and IPFS are often mentioned together, but the two should not be confused.

IPFS is the abbreviation of Interplanetary File System, according to the official description: "a point-to-point hypermedia transmission protocol". IPFS is not a token, not a project name, it is just like HTTP, it is a new generation of file transfer protocol. IPFS integrates advanced network technologies such as git, bitTorrent, and SFS, stores data in a decentralized manner, and uses git to encode files to identify duplicate files and reduce transmission waste. And in the process, encryption technology is integrated to improve data security.

The advantage of IPFS is that it complements the HTTP protocol we are currently using, and some people even have high hopes for it, hoping that it can become an important cornerstone of the next-generation Internet (WEB 3.0).

How to distinguish between Filecoin and IPFS? The design idea of ​​IPFS is great, but it is only an agreement after all, it cannot be mined, and without tokens, it cannot be used in a wider range. Filecoin is an incentive network based on the IPFS protocol. In the protocol, data must be stored on a certain computer, so it is not enough to rely on love to generate electricity. Considered.

Filecoin has proposed a solution to this problem: by increasing the incentive mechanism, service providers who store information can obtain token (FIL) rewards, which come from the handling fees paid by users and the token incentives issued by Filecoin; and those who want to use storage services , To store data in a decentralized network, you have to pay a certain cost, and this cost is also paid with FIL tokens.

According to the combing of an article in ChainNews, we can have a glimpse of the development of Filecoin and IPFS:

In May 2014, Juan Benet, who was still at Stanford University, released a draft white paper describing the vision of a P2P peer-to-peer distributed file system;

In 2015, Juan Benet established Protocol Labs, focusing on IPFS research and development;

In 2016, Protocol Labs created four technical modules: libp2p, IPLD, multiformats, and Orbit;

In 2017, as the blockchain industry entered the Cambrian explosion, IPFS, which fits the spirit of the blockchain, saw rapid growth in application scenarios. As of June 2017, the IPFS protocol has stored 5 billion files.

In the same year, Protocol Labs released the Filecoin white paper, which built an incentive network based on blockchain technology and the IPFS protocol to promote the development of a decentralized storage network. According to CoinList, Filecoin raised more than $200 million during its crowdfunding campaign in 2017, with more than 2,000 participants.

However, since then, the launch of the Filecoin mainnet has been postponed frequently. Until 2020, after two rounds of space races for stress testing, it began to gather more popularity again. During the three-year period from 2017 to 2020, several followers persisted, and criticisms were heard endlessly.

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1. Three roles of Filecoin

As a decentralized storage incentive network, Filecoin's core activities are based on storage, but it also revolves around FIL tokens.

First, miners store user data, and users pay for the storage service. As a miner, you need to purchase or rent a mining machine, install software, operate and maintain the machine, invest in manpower, and provide stable and reliable storage services to users.

In addition, there is another point that may cause headaches for miners: when mining, a certain amount of FIL needs to be locked as a pledge. Filecoin is designed to allow miners to be related to the health and interests of the network. If miners cheat or operate maliciously, May face penalties and lose staked FIL tokens.

Secondly, users need to store data and need to pay a certain amount of FIL tokens. However, this part of the tokens will not be paid directly to the miners, but will be transferred to the Filecoin smart contract. After the system determines that the miners have completed the tasks with high quality, the storage miners will be rewarded.

The third type of role is often easily overlooked: holders of broader FIL tokens. For speculative/investment purposes, ordinary users have participated in crowdfunding or purchased FIL tokens from the secondary market after going online to wait for appreciation. However, these tokens are often put in the wallet to eat ashes, and there is not much use except for reducing the circulation of FIL tokens.

There is a knot in the heart of the miner, and DeFIL is here to untie it

Where does the FIL token come from? This problem will cause a lot of trouble in the early stage.

Since miners have to mortgage FIL tokens to participate in it and get mining rewards, the amount of tokens in circulation in the early stage is scarce, which only comes from the point of crowdfunding. As the amount of tokens dug out by miners increases, tokens are sold in the secondary market to earn income. In the early stage of the project launch, miners need to join the storage competition, increase storage capacity, continue to invest, and earn benefits.

At the beginning of last month, Filecoin announced that in the original economic model setting, the rewards received by miners were delayed in the initial stage of network launch. Regardless of the fact that the miners earn a lot on the surface, it will take time for these rewards to arrive in the account, and they need to wait for the storage network to reach a certain amount of storage before they can be obtained. Therefore, the circulation of tokens is still not large. Being mortgaged or locked up, the superficial scenery may be secretly panicked. However, at the beginning of September, Filecoin announced that it had adjusted its strategy, and the partial unlocking of block rewards needs to be delayed for 20 days to remove the limit, that is, the unlocking will start after mining. To some extent eased some.

However, the problem of initial liquidity and the pressure on miners brought by currency price fluctuations, how to solve it? One way is to carry out hedging through contracts, and futures operations introduce leverage. Although it is possible to hedge the risk of currency price fluctuations, inadvertent operations may also magnify the risk. Besides, is there any other way?

Looking back at these three types of roles in the Filecoin network, a possible idea emerges: Since the holder’s FIL tokens are idle, and miners need to mortgage tokens to join mining, users or developers need to pay FIL to obtain services , so is there a possibility to lend or lease idle tokens to miners or users?

Now that DeFi has become a prominent word in the industry, the design concept of DeFi can of course also be used by Filecoin. Even the members of the Filecoin team mentioned the concept of Decentralized finance of Filecoin -- DeFil on September 22, which can not only untie the previous knots, but also bring some opportunities for ordinary people to participate.

Here, there may be three possible ways:

Let's take a brief look at them one by one.

1. Connect Filecoin to Ethereum DeFi

In early October, the CodeFi platform under Consensys announced the launch of the defi bridge, linking Filecoin and DeFi.

Specifically, through RenProtocol, FIL tokens are exchanged for FIL in ERC20 format; after the exchange, FIL miners in ERC20 format can mortgage the tokens and lend them to obtain interest; or mortgage assets to obtain FIL in ERC20 format, and then through the DeFi Bridge Convert to FIL tokens and use on Filecoin.

This means that if you hold idle FIL tokens, you can use this platform to convert them to ERC20-FIL, make market or lend on platforms such as Balancer/Uniswap/Aave, and obtain interest income. And miners don't want to buy FIL tokens from the market themselves, they can rent ERC20-FIL through these DeFi leasing platforms and then exchange them for FIL tokens to mortgage in the Filecoin network.

In this way, the risk of miners facing FIL token fluctuations can be hedged to a certain extent, so that FIL holders can obtain service fee rewards. Of course, the market is impermanent. If you participate in market making, you will also face the potential risk of impermanent losses. Fortunately, with the flexible ratio market-making methods provided by more platforms such as Balancer, some risks can be reduced.

The implementation of CodeFi is just one possible approach. In addition, it can also increase the gameplay of liquidity mining, encourage more FIL holders to participate in leasing or provide liquidity, and provide FIL to those in actual need. There are many ways to play, but the overall idea is to convert Filecoin to the ERC20 format and then connect it to the existing DeFi circle.

2. Third-party DeFi applications on Filecoin will appear

At present, the author's vision is limited and I haven't seen any examples in this regard, so I just briefly explain this possible idea. With the help of the Filecoin blockchain, create a third-party DeFi application, and use the existing DeFi design model on Ethereum as a reference to implement it on Filecoin.

The most basic token on Filecoin is FIL, and what is required as collateral to borrow FIL here? The possible answer is that, contrary to the first idea above, through a bridging method, assets such as Ethereum are introduced to Filecoin as collateral, so as to realize the loan of FIL. If this idea is to be realized, it is bound to be another test of Filecoin's scalability and support for development flexibility. Since the author has not studied this direction in depth, readers are welcome to correct me.

3. The Filecoin team provides system-level support to realize lending or leasing

There is a difference between a loan and a lease. In this case, for token holders and miners, the best way is to rent rather than borrow. After all, FIL as collateral provides functional purposes. But in this way, it also weakens the original intention of Filecoin to produce a skin in the game effect on miners.

If Filecoin supports the third-party mortgage method, it means that as a FIL token holder, you can mortgage the token in your own address, but entrust the rights and interests corresponding to the FIL token to the miners; the advantage is that the token does not need to leave the user The account only locks the liquidity, and miners do not need to pay additional collateral, only need to pay interest. At present, at this point, EOS has done native support, and EOS corresponds to resource usage rights.

However, according to the actual design of Filecoin, if the Filecoin team improves the FIL circulation mechanism in the next step, it is more likely to design it as a loan type rather than a lease type. This can also be seen from the speeches made by members of the Filecoin team in the video conference of the first round of the space race on September 22.

Considering that the launch date of Filecoin is approaching, I think that in the short term, there may not be enough energy transferred to the development of the FIL lending function module, which means that if FIL token holders want to obtain income by renting out FIL tokens , still need to wait for a while. Fortunately, the implementation provided by platforms such as CodeFi mentioned above is still a feasible channel. Where there are profits, the funds will find their own way out.

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2. Who are the players on the storage track?

Although not yet officially launched, Filecoin quasi-token spot or contracts have been listed on multiple exchanges.

Looking at the currency depends on the forum, so there is a little time left at the end, let's take a quick look at what other players are on the decentralized storage forum. Here is a reminder that it is only for sharing data information and does not make investment advice. When it comes to investing, you have to do your homework yourself.

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Storj: Standard corporate approach to benchmarking S3

At present, the largest storage service provider is Amazon S3. Storj uses this as a benchmark, and it is also one of the projects most likely to realize commercial-level decentralized storage applications. The project was created in 2014 and raised its second round of funding in July 2017.

With the help of the https://tardigrade.io/ trading market created by Storj Labs, users can purchase storage space services and support Storj tokens and bank cards as payment methods. tradigrade provides a data interface compatible with S3, which is convenient for developers to access. If the user pays with a legal currency credit card, there is no need to buy back Storj tokens from the market at present, because the Storj tokens sent to the miners will come from the tokens held by the team itself.

Storj tokens are in ERC20 format and run on Ethereum. However, the coordination and storage of data is carried out outside the chain. For the miners of storage service providers, Storj tokens are used as payment methods. Storj will split the data uploaded by users into multiple data blocks, then perform redundant operations, and then distribute and store them on the network nodes composed of miners.

Storj bills itself as the Uber of storage. Storj is not like a blockchain application system, but more like the practice of a traditional commercial company. The main difference between Storj and S3 is that the physical layer of storing data is not on your own computer, but through incentives to introduce miners to participate, contribute idle hard disks and bandwidth, and get Storj token rewards.With the help of a series of means such as SLA (Service Level Agreement), coupled with the growth of the miner node network, Storj is currently performing well in terms of stability and availability, providing a way for commercial-level applications to be used.

Storj currently has accumulated a certain number of users, and through the open source collaborator incentive plan, if the users of the open source project collaborators use Storj, they will provide certain rewards for the project. Attracted a number of projects to join.

During the outbreak on April 22, Storj also announced free storage services for organizations researching COVID-19.

In addition to storing file data, Storj's two recent cooperation cases have also expanded the usage scenarios of storage: providing storage support for blockchain public chain projects. When a node newly joins a blockchain network, or when a data failure occurs and data needs to be replayed, this synchronization process setting may last for several days. Introducing Storj as a storage service opens up new possibilities.

Storj worked with the ETC team to build a decentralized architecture for GETH to help ETC nodes and developers synchronize block data faster. Some community users also sent a message to Vitalik, whether Ethereum can also cooperate with Storj to accelerate the data synchronization process of newly added nodes in the Ethereum network in a similar way? V God said that he has not yet contacted the Storj team.

In addition, the IoDLT project from the NEM (New Economic Coin) community also uses the storage service provided by Storj and introduces it into its own product architecture. Specifically, Tardigrade (a service provided by Storj) and MongoDB have built a decentralized and flexible solution that allows application developers to use on-chain data conveniently and quickly.

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Siacoin: Veteran storage project, niche, controversial

Siacoin has its storytelling side, the token symbol is SC, and PoW is used to distribute tokens according to computing power, not according to storage capacity. Launched in 2015, Siacoin is one of the oldest storage projects. There is an old story involved here.

Due to the use of ASIC mining, the official mining machine of Sia was cut off by Bitmain and Innosilicon, because members of the Sia community invested millions of dollars in the ASIC project, but the computing power was later crushed by Innosilicon’s mining machine The latter became the biggest master of computing power at that time. After a year of discussions, Sia announced a hard fork in 2018.

There are constant disputes in the community. Some critics believe that the Sia team has monopolized the mining machines for its own benefit, so it initiated a fork. According to the data, there are currently four chains on the market: Sia main chain, Sia Prime, Sia Classic and the forked Hyperspace. But the Sia main chain is more often mentioned. The website of sia Classic can't be opened anymore.

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Arweave: Store data on the chain

Unlike Storj and Sia, Arweave adopts an on-chain data storage design, and the fee is a one-time payment instead of a monthly fee. Arweave uses PermaWeb's storage network to write content to on-chain storage. According to the introduction on the official website, Arweave is a shared hard disk that will never lose data.Arweave allows remembering and preserving valuable information, applications and history indefinitely. By preserving history, it prevents others from rewriting history.

The token of Arweave is AR. The Proof of Access (PoA) mechanism is adopted to identify whether miners have stored certain types of data through random inspections. Different from the contract system of Sia, Filecoin, and Storj, Arweave stores data permanently. Each round of verification related to miners’ block rewards will be related to a certain block (memory block) in the past. Faster miners are rewarded.

Teacher Liu Yi wrote an article analyzing Arweave, comparing Arweave with Filecoin, Bitcoin, Ethereum, and encrypted assets one by one. In his view, Arweave is not an accompaniment to Filecoin, but a different approach, an atypical decentralized storage project.

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BLueZelle: the main decentralized database

The BlueZelle token is BLZ. Like EOS, the project adopts the dPoS consensus mechanism and is committed to becoming an on-chain database of blockchains and dApps. In fact, the reference to the database on the chain should not be unfamiliar to friends in the EOS community. BM and BB have also posted related remarks on Twitter, but they will mention it whenever there is a hot spot. , including DeFi, etc., don't take it too seriously.

3. Summary

Before and after the launch of Filecoin, the popularity of the storage sector is bound to increase. This article sorts out several projects in the field of decentralized storage. Through a rough comparison, it can be perceived that, at least in the short to medium term, the usage rate of Filecoin may not be the most breakthrough, but the enthusiasm surrounding the Filecoin ecology should be the highest.

DeFil will definitely appear. The combination of DeFinance + Filecoin will provide ordinary FIL token holders with the possibility to participate, and may also obtain certain income opportunities without participating in computing power mining or acting as a miner. However, new fields will be accompanied by new risks, and readers are reminded to study before making a decision.

References

-END- Disclaimer: This article is the author's independent point of view, and does not represent the position of the Blockchain Institute (public account), nor does it constitute any investment opinion or suggestion.