We’ve previously documented the consistent growth of Filecoin across storage capacity, active deals, and committed deals in the past month. Additionally, the Filecoin Network saw an all-time high in daily active deals just weeks ago. As the network grows rapidly, here are some current and foreseeable opportunities for businesses to leverage:
Providing Competitive APY on FIL
Current: FIL-related Financial Services
Managing risks, providing liquidity and yield, and hedging against uncertainties have always been valuable in the traditional finance system. Within the Filecoin economy, storage providers need liquidity and hedging against the volatility of FIL prices along with the general ups and downs of cryptocurrencies; while allowing filecoin holders to earn competitive yields from their FIL. This creates vast opportunities for FIL-related financial services, appealing to lenders, borrowers, underwriters, and liquidity providers. At current, Gemini Earn offers one of the most predictable and competitive 7.25% Annual Percentage Yield (APY) on FIL for holders.
Foreseeable: Higher competitiveness
Based on FIL’s mining rewards, there are opportunities to provide even more competitive APY and to create liquidity for short-on-liquidity storage providers. Based on the Network Utility vs Time Chart below, the Filecoin network is gradually shifting from Stage 1 to Stage 2, meaning that emphases and revenue drivers are gradually shifting to higher value and quality services.
This provides more opportunities to hedge against FIL price volatility through data-driven FIL price prediction and underwriting for storage providers.
Computation + Data with the Filecoin Virtual Machine (FVM)
On November 11th, 2021, Filecoin Virtual Machine (FVM) was introduced to the Filecoin community, which represents a core pillar in the next evolution of the decentralized storage ecosystem––aimed to “enable developers to create bridges for cross-chain interoperability as means to share liquidity, and to integrate apps deployed in other chains (e.g. Ethereum, NEAR, Polygon, Solana, Flow, etc.), with the storage capacity and capabilities provided by the Filecoin network.” FVM allows the Filecoin network to gain, on top of its existing storage capabilities, the ability for computation in two different aspects: on-chain computation over state, and off-chain computation over data.
Foreseeable: More Web3 Protocols and Dapps to be built on top of the Filecoin Network
There are several use cases around FVM introduced in the blogpost, including decentralized computation over data stored in Filcoin, smarter storage markets, DataDAO, tokenized data sets and more. While more teams leverage the Filecoin & IPFS ecosystem to build Web3 products, there is now increasing potential for on-chain data analysis to improve network efficiency, as well as deal-matching services and storage provider quality-control to optimize the network utility of each product’s unique needs.
Potentially new types of Web3 Protocols & Dapps
Current: Filecoin & IPFS are used for storage
Many protocols and Dapps have emerged on top of the Filecoin & IPFS ecosystem. While Audius, Huddle01, and Slate are building customer-facing Web3 products, Textile and NFT.Storage are building developer-facing or business-facing services.
Foreseeable: More Web3 Protocols and Dapps with novel interactions with Data
As the Web3 ecosystem grows, there are abundant values to be realized within the data service pipeline, which includes data refinery, curation, and monetization. Through leveraging IPFS & Filecoin, various economic infrastructures that centre around data ownership and monetization could emerge. While IPFS and Filecoin are currently used mainly for storage purposes, the Filecoin ecosystem actually boasts a unique feature that allows businesses to think bigger than that. Within Filecoin, data storage is uniquely identified with periodic proof. This is a building block unique to Web3 and the ways in which people can interact with this still waits to be discovered.
One example of a novel way in which Filecoin could expand the horizon of data economies would be in DataDAOs. Data bounties are smart contracts that pool together funds to store a particular CID. Funds only pay out when there is verifiable proof that it has been stored on Filecoin. DataDAOs, spearheaded by Ocean Protocol, are data ownership-related DAOs formed around data a community cares about. Members join by providing proof that they have stored a piece or have contributed to a pool––relevant to Filecoin’s unique ability to verify data storage through periodic proof. We foresee the growth and emergence of more data-ownership-related infrastructures like DataDAO, which will help Web3 users better own and monetize their data.
IPFS & Filecoin have created an underlying network of growing storage capacities that empower communities of developers and creators to build on top of. Numerous business opportunities related to data production, refinery, ownership, and monetization are yet to be discovered and defined by the community.
Starboard designs and develops novel Web3 products and protocols and enables network participants to make more informed decisions about their economies through research and analytics. For more information, contact us at email@example.com.