Filecoin Survey: Big overseas reputation but few participants, which fork coin is popular?

Text | Nancy Editor | Tong Producer | PANews

After three years of hard work, the long-awaited "pigeon king" turned out to be the "scalping king". The miners were complaining and the secondary market was wailing.

"The mining tyrants can't beat the coding tyrants." It was thought that the launch of the Filecoin mainnet would open a new chapter in application, but it turned out that there was a reversal of the game between miners and officials. On the second day of the mainnet launch, the top miners collectively protested and went on strike, and stopped increasing computing power. Behind the seemingly protest, it was actually a helpless move by the miners.

Unexpectedly, before the dispute among miners was resolved, the official team turned into a "market value management expert" and sold 1.5 million FIL. The drop of nearly 90% really poured cold water on many loyal supporters. Faced with continuous doubts from the outside world, the seemingly compromising solution of Filecoin officials is difficult to solve the fundamental crisis, and a self-help fork movement is slowly starting.

With both reputation and price suffering a setback, founder Juan Benet "could not sit still" and rushed to save the situation, sending dozens of tweets to refute rumors and respond, but the fact that Filecoin opened high and ended low could not be concealed. The only incentive layer is in deep development difficulties and is struggling to survive, which makes IPFS, which attempts to subvert the entire Internet application layer protocol standard, full of uncertainties in the future.

Miners trapped in staking

Miners have suffered from pre-mortgage for a long time.

"If the authorities cancel the pre-mortgage within a month, then we will continue to seal it, otherwise we will turn to forked coins and conduct 'double mining' operations." The launch of the mainnet ignited the long-suppressed dissatisfaction of miner Song Jiang. Not only Song Jiang, in fact, both miners and miners have long complained about the pre-mortgage.

"Mine, withdraw and sell" is the consistent strategy of DeFi miners, but this process is not applicable to Filecoin. In Filecoin's economic model, in order to prevent miners from using malicious means to obtain system rewards, the official implements it by setting up a mortgage mechanism consisting of block reward mortgage and pre-mortgage. In block reward mortgage, miners' rewards are unlocked linearly within 180 days, which means that miners can only get all rewards after 180 days; in pre-mortgage, miners need to provide FIL for mortgage before packaging sectors to ensure that miners can complete the promised life cycle of sectors.

This special setting does help the entire network develop in a positive direction. But at the same time, it also brings about the problem of insufficient liquidity of FIL in the early stage, and the FIL mortgage mechanism with insufficient supply makes miners complain, especially small miners.

At present, the channels for miners to obtain FIL are mainly the rewards obtained in Space Race 1 and Space Race 2, as well as the mining block rewards after the main network is launched. In the two Filecoin space races, miners received a total of 3.66 million FIL rewards. According to the 180-day linear unlocking rule (only 1/180 of the block reward can be obtained every day), more than 20,000 FIL tokens can be released every day. After the main network is launched, according to the data of the FILFOX browser, based on the current daily output of 150,000 FIL, the FIL token releases about 800*N (number of days) tokens every day. In other words, miners can currently obtain 20,000+800*N FIL tokens every day.

However, mining rewards are not enough to cover the pre-mortgage demand. If miners calculate at the current rate of 10.6PiB/day, 347,340 sectors will be packaged every day. According to the current mortgage demand of about 0.18FIL/sector, the entire network needs to mortgage 62,500 FIL every day.

From this point of view, the FIL rewards obtained by miners in the early stage are far from meeting the pledge needs. Moreover, Filecoin has a very complex and strict punishment mechanism. If there are technical or network problems with the mining machine, the miners' pledged tokens will be deducted. Such a passive situation is what miners do not want to see. But if miners still want to continue to participate in mining, they can only go to the secondary market to buy FIL for pledge. However, for miners, the return on the investment cost of hardware and pledged tokens in the early stage is already unknown. Choosing to go to the secondary market to take over will only make their situation worse.

Even if the FIP-4 proposal has been officially approved by Filecoin, that is, 25% of the block rewards will be released directly, and the other 75% of the rewards will still be released linearly on a 180-day basis, the 43,250 FIL tokens can only temporarily solve the urgent needs of miners, and still cannot meet the number of collateral coins required by the market.

Data from the FILFOX browser shows that the total computing power of the Filecoin network is currently 610.85 PiB. On the day the mainnet was launched, the total computing power of the network was 569.47 PiB, which means that the mainnet computing power has only increased by 7.2% in the past week. However, Juan denied that "the reason why miners are growing slower than before the launch is largely because the network no longer subsidizes their staking and fee costs."

He believes that the miners' strike is nonsense, and some miners are trying to add fuel to the fire and try to get more. At present, miners need to use real money to mine, so the growth rate should be slowed down to match their computing power growth and token flow. In addition, some miners hope to use USDT or BTC, etc., to borrow FIL for staking, rather than buying at high points in the market. It is worth mentioning that Juan also emphasized that he does not want any major changes unless there is a security vulnerability.

"PL (protocol labs) basically does not listen to the demands of miners, and there are problems internally. Currently, the governance of the Filecoin community is extremely centralized." A miner told PANews after attending a closed-door meeting of miners in Shenzhen.

Obviously, the game between miners and the official team will continue.

The decline was 86.3%, and the official incarnation was "Market Value Management Master"

From the wealth-making train that everyone is afraid of missing, to the new generation of harvesters, Filecoin's perfect filter has been broken.

Filecoin's magical start surprised many people. Huobi data shows that the current FIL price is $30.2, down more than 86.3% from the high of $220.

In addition to being shocked, some people found that an unknown address actually received 1.5 million FIL tokens and transferred 800,000 FIL to Huobi. However, according to Filecoin's unlocking plan, early investors, officials and miners should only unlock 500,000 FIL on the first day. So, when the official promised that FIL tokens would not be sold in the early stage, where did these tokens come from?

In response, Filecoin members gave a rather "meaningful" response, saying that the above account is an official account, and that these coins were transferred mainly to ensure market stability, buy and sell tokens on exchanges to provide market liquidity, stabilize prices, and correct unbalanced incentives for miners. But these are not FIL sales by Protocol Labs. The market-making plan is for the benefit of the community, to ensure liquidity at the beginning of the market and to stabilize the coin price.

On October 20, the "market making" address transferred out another 30,000 FIL. As of the time of writing, the official team had transferred out 909,000 FIL, with a total value of US$27.27 million.

However, in this game of interests, retail investors are the biggest losers. The plunge in FIL prices is closely related to the fact that test coins can be bought and sold as mainnet coins. According to Fileocin's official statement, all sectors in Space Race 1 and 2 will be migrated to the mainnet, and the pledges and block rewards obtained from these sectors will also be migrated to the mainnet. However, the encapsulated effective computing power, pledged FIL, and mined FIL test coins will be migrated to the mainnet in a certain proportion.

But what no one expected was that after the mainnet was launched, these test coins could be directly transferred to the exchange for trading, which also made miners gain a large amount of "windfall". In this regard, Filecoin official members explained that the test coins can be used directly as mainnet coins is a special design, not a "bug", which is to ensure the security of the network. However, the miners sold tens of millions of FIL immediately after the mainnet was launched, which was "seriously exaggerated". The actual number is 1/10 to 1/100 of the number mentioned in the report. It is undeniable that the miners' selling behavior is one of the factors that caused the FIL price to plummet.

The forked coin crashed right after it was launched, but it became the "popular choice"

Amid all the controversies, Filecoin has long since gone from being "highly anticipated" to "criticized by everyone."

Justin Sun, the founder of Tron, is one of them. He said on Twitter that Filecoin might be a scam and hoped that the U.S. Securities and Exchange Commission (SEC) would investigate. Juan responded that Justin Sun is not anyone's savior and he wants to take the opportunity to fork Filecoin.

When the consensus changes, forks follow. In fact, before and after the launch of the Filecoin mainnet, voices of forks have been heard one after another, and a Filecoin fork movement is in full swing.

As early as September this year, an anonymous team launched the forked chain Filecoin Vision. The project claims that this is a more decentralized storage public chain project, which is completely led by the community. The community will completely determine the economic model design and parameter formulation, new feature/function development, and on-chain governance of Filecoin Vision. At the same time, the project also pointed out that Fileocin has problems that need to be solved, such as the linear release of pre-mortgage and post-block rewards, and the reduction of the mining share from 70% to about 30% in the early stage of the main network.

However, PANews noticed that the current white paper of Filecoin Vision is still too rough, and information such as miner participation type, governance model, spot check method, packaging efficiency, etc. has not been disclosed.

Soon after, Filecash, the first pre-forked project of Filecoin, was officially launched. The project mainly optimized the technical issues of packaging redundancy, regional restrictions, serious corporate centralized governance problems, unreasonable punishment mechanism, and insufficient community management in Filecoin, such as dynamic pre-mortgage to fully release the benefits to miners. It is worth mentioning that Filecash proposed to jointly develop and govern with the community, fully democratic to fight against dictatorship.

Recently, there is another Web3 physical infrastructure project called FileStar. Regarding Filecoin's controversial pre-mortgage rules, FileStar not only canceled this design, but also made a lot of technical innovations, such as implementing a new P1 packaging algorithm (optional including SHA512, Poseidon, Pederson and Blake2s) to improve packaging efficiency, introducing recursive zero-knowledge proof technology, realizing off-chain aggregation of messages, and improving the TPS of the entire network. In addition, unlike Filecoin, which only incentivizes storage proofs, FileStar will gradually realize incentives for storage resources, computing resources and bandwidth resources, and realize distributed Internet physical infrastructure with distributed storage, verifiable computing, and measurable bandwidth.

"The concept of Filestar is good and many miners are paying attention to it. However, miners do not want to pay for the Filecash project," the miner told PANews.

But compared to Filecoin, the above-mentioned forked projects focus more on the concept of decentralized storage, long-term incentives for miners, and community autonomy, which is exactly what miners want and has become their bargaining chip with the authorities. Regardless of the future development of these forked projects, one thing is hard to avoid: if Filecoin does not make changes, more and more people will flee this gold rush.

Chinese people are addicted to self-entertainment? No one overseas cares

It is very popular in China, but not popular overseas. Recently, PANews conducted a questionnaire survey on Filecoin among overseas investors and found that there is little interest in it abroad, and it is even not optimistic.

Among the 22 respondents, most have more than three years of experience in cryptocurrency trading. Although 86% of the respondents have heard of Filecoin, only 22.7% know about Filecoin and IPFS, and only 13.6% have participated in Filecoin mining or purchased FIL tokens or futures.

Many interviewees told PANews that they were not optimistic about Filecoin and that the market was more like a hype. Compared with technology, people are more willing to use it to make quick money. At the same time, overseas investors also believe that this is not a good project and that Filecoin should not let miners bear both mining pressure and legal risks. In addition, IPFS is not yet comparable to existing cloud storage solutions such as Dropbox, iCloud, and Google Drive, not to mention the challenges.

It is worth mentioning that one interviewee said that more than 80% of FIL miners are in China. Juan’s tweet also confirmed this (see picture). He said that there are thousands of miners around the world using Filecoin. In his picture, most of them are Chinese miners. At the same time, in the FILFOX browser, the top ten mining nodes are almost all from China.

From this perspective, Filecoin is more like a popular project led by Chinese people, just like EOS became popular due to a large amount of Chinese funds and participants. However, will Filecoin's future repeat the old path of EOS?