Filecoin creator Juan Benet (CoinDesk archives)
Miners for the decentralized storage project Filecoin are facing such a dire lack of liquidity to participate in the network they are willing to pay high interest rates of up to 40% average per year (APY) to investors holding large amounts of filecoin (FIL), the networks native token. This dynamic has created a lending market and is leading to more questions about Filecoins current economic model.
The lack of liquidity in filecoin required to mine on the proof-of-stake storage network is forcing desperate miners to borrow FIL rather than going into the open market to purchase tokens. The tokens price skyrocketed to $114 when the mainnet launched Oct. 15, settling at around $28 as of press time. However, that is still too rich for many miners who have already invested a lot of money in hardware rigs to support the network.
FIL token price since Filecoins mainnet launched Oct 15.
One of those leading the way in brokering these deals is the accredited investor portal CoinList. Matthieu Jobbe Duval, the companys head of financial products, confirmed to CoinDesk the firm is making deals that pay an annual percentage yield of 40% over a three-month term for FIL liquidity. Everybodys looking for filecoin for a very simple reason, Duval said. There are very few tokens out there because the investments in the [initial coin offering] were done with a vesting schedule.
The Filecoin blockchain, from Protocol Labs, includes decentralized file storage (the Interplanetary File System, or IPFS) and a content distribution network. It went live on Oct. 15.
Every day a smart contract on the Filecoin blockchain gives investors a small amount of FIL over the course of six months. Or one year. Or three years. It depends on the vesting agreed to by investors. Duval says hundreds of Filecoin investors are participating in the CoinList lending program, some of whom invested millions of dollars in the project and therefore have a generous amount even though the tokens are still vesting.
Brian Mosoff, CEO of Canada-based investment firm Ether Capital, is a large holder of filecoin. Recently, he told CoinDesk rates for lending FIL to miners was initially at 8% ...
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