Filecoin's token, FIL, is a utility token for payments with the following:
- Payments currency for facilitating storage and retrieving data a) Users pay providers to store/retrieve data using $FIL b) Once data retrieved, $FIL paid to provider (aka miner) c) Security mechanism via ensuring provider successfully done their job by storing data from moment contract was signed d) Regulation of shared resources aka blockspace (via burning)
Tokenomics for FIlecoin looks relatively healthy, as follows: Allocations
- Max supply of 2 billion
- 10% allocated to fundraising. 7.5% was in their ICO in 2017 where they raised $257m, and 2.5% is allocated for ecosystem development & future fundraising
- 15% allocated to Protocol Labs (6 years vesting since Oct’20)
- 10.5% Protocol Labs; 4.5% for the team & contributors
- 5% allocated to Filecoin Foundation (6 year vesting since Oct’20)
- 70% Mining rewards with the following: a) 15% Mining Reserve (requires protocol upgrade to be tapped, community voting/development) b) 55% Storage Mining Allocation
In term of tokens inflow and outflow, the team calls inflows as Sources, and outflows as Sinks. Hence, total supply = total sources - total sinks.
Tokens are burnt to fund on-chain computations and bandwidth as network message fees, and whenever consensus and storage errors take place. This ensures there is long term deflationary pressure.
Filecoin also has an interesting minting feature, as they are focused on storage powert, making use of a dual minting model called Baseline and Simple. This is to encourage consistent storage onboarding and long-term investments instead of rapid sealing. Block rewards scale up as total storage power on network increases
With Baseline Minting, up to 770M FIL tokens are minted based on performance of the network, but only fully released if Filecoin network reaches a Yottabyte of storage (1 trillion TB) in under 20 years
For Simple Minting, 330M FIL tokens released on a 6.5 year half life based on time . Hence Total rewards per epoch = Baseline Issuance + Simple Issuance
I believe the token able to accrue value without creating undue pressure on users of network’s various benefits, and token holders can benefit from FIL consumption due to increased utilisation (when token is burnt). The project is also geared towards onboarding users and consistent growth, long-term project. Free allocations are just @ 20%, whilst a large bulk of rewards are from mining. Current circulating supply ~470M, just over 23% of total supply. On such a low circulating supply/total supply, the token definitely looks primed for long term scaling and growth. Show Less
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