wFIL is bringing liquidity to the Filecoin storage market

Since its mainnet launch in October, Filecoin has become one of the largest decentralized storage projects on the market. Currently, digital asset custody platform Anchorage is vigorously promoting Filecoin to obtain liquidity from the DeFi industry.

DeFi is the abbreviation of Decentralized Finance. The DeFi protocol aims to provide financial services similar to traditional banks through decentralized infrastructure.

Note: Anchorage is a US crypto-native digital asset custodian. Anchorage offers an “end-to-end” insurance solution for storing digital assets for institutions and investors.

Anchorage announced yesterday that it has partnered with Tokensoft and investment company CMS Holdings to launch Wrapped Filecoin (wFIL). Wrapped Filecoin is part of the Wrapped initiative, which aims to bring cross-chain assets to the Ethereum blockchain, thereby bringing much-needed liquidity to the nascent Filecoin storage market while helping DeFi protocols generate revenue for users.

Wrapped cross-chain tokens have become an important part of DeFi. According to DeFi data provider DeFi Pulse, solutions such as Wrapped Bitcoin have brought more than $2.3 billion in value to the DeFi ecosystem. Like wBTC, wFIL uses a custodian system to hold the underlying asset (i.e. Filecoin's token FIL) and issues a 1:1 version of the Wrapped token on blockchains such as Ethereum.

Colin Evran, head of Filecoin ecosystem, said: “Wrapped Filecoin will drive the emergence of some truly creative DeFi products and create huge opportunities for Filecoin miners and storage users. We see innovations from many individuals and institutions interested in decentralized storage every day; we look forward to what will happen once DeFi talent gets involved.”

Ethereum’s DeFi market provides a lot of liquidity, or value in the form of tokens, making it easier for traders to find fair prices for assets or provide credit to invest in new technologies. This makes compatibility attractive for Filecoin, which uses a separate market to price storage capacity for different use cases.

Building a liquidity bridge between Ethereum and the native Filecoin market allows more traders to buy and sell wFIL tokens, so that the price more accurately reflects the supply and demand of Filecoin storage capacity. In return, DeFi users may reap the rewards of Filecoin growth, which was previously unattainable on the Ethereum chain.

As previously reported, Filecoin is also working with Ren on cross-chain transactions of FIL tokens. Ren is designing a smart contract system that can host native tokens without relying on third-party custody. But Ren is still moving towards decentralization - in August this year, Ren launched its own Bitcoin wallet for members of its development team. This Bitcoin wallet is used to store Bitcoin corresponding to Ren's wrapped renBTC.

Wrapped Filecoin is already available through Uniswap trading, and Anchorage and Tokensoft plan to add cross-chain capabilities for other tokens in the coming months.

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