Since the launch of the Filecoin mainnet on October 15, 2020, the Filecoin network has achieved many important milestones in just three months. This article will explore the circulation supply of Filecoin tokens and the design concepts behind its economic model, helping readers better understand Filecoin’s token economics.
Filecoin Ecosystem Overview
The Filecoin network has currently attracted more than 700 miners, with a total storage capacity of nearly 2EiB, and more than 90 ecological projects have been built on Filecoin. More than 5,400 developers actively participate in the Filecoin project's GitHub repository and contribute to the development of the ecosystem. With the development of a large number of use cases such as storage consumption applications, archive storage, decentralized finance (DeFi), decentralized video, etc., the Filecoin ecosystem is growing rapidly.
Importance of the Economic Model: Filecoin’s economic model is key to its success. As Nobel Prize winner in economics Elinor Ostrom said, complex social problems cannot be solved simplistically. Filecoin is designed to incentivize global stakeholders to participate in this distributed storage network through a reasonable economic model.
island economy
Filecoin can be viewed as an “island economy” in which participants produce valuable storage goods and services and export them around the world. The utility of a network is reflected in the attractiveness of the goods and services produced by participants. In order for an economy to prosper, it first needs to increase supply and then attract more customers through improved services.
Token Minting Mechanism: Filecoin adopts a dual minting model to ensure that the long-term goals of the network are consistent with the release of tokens.
Baseline casting vs. simple casting
Baseline minting: 770M FIL tokens are released based on the storage capacity of the network. These tokens will only be fully released when the network's storage capacity reaches yao bytes (2 to the power of 80 bytes).
Simple casting: 330M FIL tokens are released with a lifespan of 6 and a half years according to time. This mechanism means that 97% of the tokens will be released in about 30 years.
Mining Reserve: Filecoin also reserves 300M FIL tokens as a mining reserve to incentivize future mining types. The release of this part of the token will be jointly decided by the community to ensure the sustainable development of the network.
Investor Token Release
In order to align stakeholders with the long-term goals of the network, Filecoin’s token release mechanism encourages participants to stay away from short-term speculation and promote the long-term development of the network.
Main stakeholders: Miner rewards: 75% of the block rewards received by miners are released linearly within 180 days, and 25% are released immediately, ensuring the cash flow and profitability of miners.
SAFT investors: All SAFT holders will receive FIL tokens according to linear release terms from the date of network launch to ensure long-term participation of investors.
Filecoin Foundation and Protocol Labs: The FIL tokens of these two institutions will also be released linearly within 6 years to promote the development of the ecosystem.
Pledge and penalty mechanism
In the Filecoin network, the pledge and penalty mechanism are important means to ensure storage reliability and network security. Miners need to lock a certain number of FIL tokens to achieve goals such as consensus security and contract guarantees.
The role of the community: The amount of staking and the penalty mechanism are jointly decided by the community to ensure the transparency and fairness of the network. Only through the joint efforts of the community can the Filecoin network achieve sustainable development.
in conclusion
Filecoin's economic model and the token minting mechanism complement each other and provide a sustainable development platform for global storage services. Through reasonable incentive mechanisms and community participation, Filecoin not only promotes its own prosperity, but also provides valuable experience for the entire blockchain industry.
As technology continues to advance and the market changes, Filecoin will continue to optimize its economic model to adapt to the changing environment. The joint efforts of participants will be the key to Filecoin’s future success.