What use cases will the Filecoin Virtual Machine FVM mainnet launch bring?

On March 15, 2023, Filecoin successfully released the Filecoin Virtual Machine FVM as expected. Filecoin's official blog published an article introducing FVM and its possible use cases, compiled by xiaozou from Golden Finance.

FVM: The final step in Filecoin’s overall plan

As of epoch 2,683,348, the Filecoin blockchain now supports smart contracts and user programmability through the Filecoin Virtual Machine, which will unleash the huge potential of the open data economy.

This launch is a milestone in Filecoin’s larger roadmap to bring open access and public verifiability to the three key areas of the data economy: storage, computation, and content delivery. When phones became “smart,” the ability to write and install apps took these devices far beyond pre-installed capabilities. Opening up creativity and control is how smartphones impacted the world. Similarly, FVM allows developers to orchestrate where, when, and how data is stored, managed, and monetized on an open marketplace.

The launch of FVM kicks off the final step in Filecoin’s master plan to bring massive computation and the ability to drive web-scale applications to the world’s largest decentralized storage network.

In addition, the release of FVM will consolidate Filecoin's positioning as a layer 1 blockchain, providing unique power for the open data economy. Many leading web3 projects have announced plans to use, support, or integrate FVM to upgrade their own services.

Unleashing the potential of the Web3 open data economy

FVM not only brings a more resilient, accessible, and decentralized cloud, but also provides thousands of developers, storage providers, entrepreneurs, and other network participants around the world with the opportunity to own and reward individual contributions to the data economy in ways that were once unimaginable. For example, Waterlily, a prompt-based AI tool that generates images in the style of a specific artist, uses tokens to directly reward the creators of the original AI training data.

Waterlily and more than 150 other teams, after months of experimentation, iteration, and hardening on the testnet, began deploying FVM-powered products and services to the Filecoin mainnet earlier today. The ability to launch FVM-powered DataDAOs, dApps, and more - many of which were impossible to build before - has excited more than 16,000 developers in the Filecoin ecosystem.

FVM also brings the rest of web3 closer to the Filecoin ecosystem: the first runtime launched on FVM is the Ethereum Virtual Machine (EVM), which many are familiar with. While many other virtual machine runtimes will follow over time, choosing EVM first is a testament to the strong developer community and thriving tooling ecosystem built by many of our friends in Ethereum. The entire Filecoin community is excited to welcome Ankr, Axelar, Brave, Celer, Ocean, Sushi, Tellor, and many other projects, and with them new integrations enabled by FVM.

“We are excited to integrate with FVM and leverage its powerful smart contract capabilities to enhance the Sushiswap user experience. With FVM, we can unlock new areas of decentralized finance and provide our users with more innovative and efficient solutions. We are excited to continue working with the Filecoin network to build the future of Web3 together.” — Jared Grey, CEO of Sushi

Products and services that can be developed using FVM represent an opportunity to grow and capture existing, emerging, or entirely new markets at a massive scale worth trillions of dollars. Ultimately, FVM and the Filecoin network can facilitate the development of applications, markets, and organizations that could exceed the scale and scope of services provided by centralized cloud providers and those that run on them. Investors are excited about this potential and have allocated millions of dollars to help incubate businesses in the Filecoin ecosystem that profit from these opportunities. For example, Longhash and Graph Paper Capital have launched FVM-specific accelerator programs.

FVM also aims to unlock more growth opportunities for storage providers (SPs) on the network, who contribute over 13 EiB of storage capacity and make Filecoin the world's largest open access storage network. Since the release of FVM, storage providers have secured hundreds of TiB of customer data and locked up over 130 million FIL collateral while continuously earning block rewards and revenue from storage transactions. With the release of FVM, decentralized financial services built by developers may make it easier for FIL (an important component of the Filecoin storage network) to be leased to storage providers by token holders to increase storage capacity and promote usage. In summary, third-party developers (such as Glif, FILL Pool, Filet Finance, etc.) are planning to provide more than 5 million FIL to storage providers using DeFi services through pilot programs in the coming months.

Major players in web3 and beyond are using FVM to enable lending, permanent storage, cross-chain, identity verification, and more.

FVM is revolutionizing the way we interact with the web3 ecosystem and inspiring noteworthy web3 projects to create new solutions, ranging from FVM-powered leasing services, to permanent storage solutions, to developer tools, DeFi, cross-chain solutions, and more. Let’s take a deeper look.

DeFi Lending Protocol

FVM allows developers to build new solutions to help storage providers obtain FIL as collateral. Specifically, FIL token holders will soon be able to help storage providers operate by contributing their own FIL based on smart contract protocols. These third-party protocols will have their own set of standards to select storage providers that lease FIL, and adopt different lease terms and requirements. Efficiently connecting Filecoin token holders with storage providers can accelerate the network's data growth and enable new storage providers to provide online services more efficiently.

Persistent Storage and Data DAO

Prior to the release of FVM, storage deals were not permanent and had to be renewed every 1.5 years. Now, FVM lets users implement set-and-forget storage and manages repetitive storage deal creation tasks with repair and replication bots. Using smart contracts, users can deposit sufficient FIL in their wallets to permanently fund data storage, and over time, across many storage providers. This gives users the long-term storage persistence that other blockchains claim, while also benefiting from Filecoin's verifiable storage proofs, which mathematically prove that the network is correctly storing and replicating data.

Data DAOs can also leverage FVM participants to coordinate and manage uploads of data to the DAO. Using permanent storage, they can ensure certain standards are met for scalable, clean datasets. FVM participants can also mint tokens and NFTs for participating members of the DAO to reward participation and incentivize desirable behaviors. The combination of permanent storage and Data DAOs opens up endless creative possibilities for decentralized data management, payments, and care. Ocean, NFT.Storage, and Waterlily are just a few examples of Data DAOs that are using FVM to transform public governance storage.

Cross-chain solutions

The Filecoin virtual machine can be integrated with major web3 chains (such as Polygon, Ethereum, etc.) for cross-chain message transmission and liquidity through Celer, Axelar, etc. This will enable users to add powerful data functions to any chain. For example, dApp users on other chains can easily access and pay for Filecoin services (such as verifiable data storage and decentralized computing) through smart contract calls, and bring existing liquidity in the form of wrapped tokens.

“Axelar’s ​​integration with Filecoin is one of the first use cases in terms of interoperability, combining chains with different properties. For example, cross-blockchain DeFi will be able to be combined with decentralized storage, regardless of where they choose to build.” — Sergey Gorbunov, co-founder of Axelar

FVM will enable third-party decentralized financial applications to support data storage businesses using on-chain and off-chain value streams of FIL, other tokens, and fiat currencies. With FVM, there are new ways to trade Filecoin through wallets such as Metamask and Glif, as well as support for major exchanges such as Binance, Coinbase, Kraken, etc. You can now exchange FIL on the local chain for other assets, including bridging ETH, BTC, and stablecoins, supporting local on-chain asset management strategies. Users can also use cross-chain decentralized exchanges such as Squid and various automated market makers such as SushiSwap and derivatives such as Thetanauts to discover the lowest fee path and develop insurance and hedging strategies.

DeSci, Videos, Games and More!

Smart contracts combined with content-addressable and verifiable permanent storage create endless possibilities for decentralized data management, payment, and care. The launch of FVM will open up new paradigms for FVM-enabled services such as video creator communities and live streaming storage (such as Livepeer), social data preservation and migration, real-time gaming, and more.

“With the release of FVM, we’re excited to build on Brave’s existing support for Filecoin and IPFS, providing even more ways to build on and interact with the decentralized web.” — Brian Bondy, Brave co-founder and CTO

This is just the beginning. Web3 entrepreneurs now have the opportunity to unlock the potential of a trillion-dollar open data economy and reshape the centralized business model of Web2. Startups in Filecoin and adjacent ecosystems have raised over $200 million in funding. The community has provided ample support and funding structures for teams, including a new web3 accelerator and an upcoming bug bounty program that offers up to $500,000 in rewards to white hat hackers (details to be announced soon).

What’s next for the Filecoin community?

“FVM is a major step forward for blockchain and Web3 — it enables developers to build new types of applications that bring the power of smart contracts to data at scale.” — Juan Benet, Founder of Protocol Labs