Highlights | Filecoin Launch AMA

As part of Filecoin Launch Week, the Filecoin team will host a live AMA with the Filecoin community at 11:30 am Beijing time on October 21. More than 20 questions about Filecoin Launch, cryptoeconomics, and Filecoin mining were answered . The following is a condensed version of the AMA.

1. There are already 19 million FILs in circulation in the market. Can the authorities explain where so many circulating coins came from? There is news that after the mainnet was launched, someone directly listed the test coins on the exchange and successfully traded them. Does this BUG really exist? How will the authorities deal with the 30 million FILs that appeared out of thin air?

No, this is not a bug. There are three main sources of circulating tokens: unlocked mining rewards, unlocked SAFT tokens, and tokens reserved for stable markets and lending (almost all of which are unused). Only a small amount of tokens are held by miners as working capital and converted to mainnet tokens along with the pledge. This is necessary because miners need a certain amount of unlocked tokens to seal sectors and fix errors.

2. When will the Filecoin team establish NSE and effective data mechanism?

NSE is under active development and is currently undergoing external and internal security audits. Once these steps are completed, we can move on to the "trusted setup" and integration work for the various implementations. It is now scheduled to be integrated into Lotus in Q1 or Q2.

3. In addition to the FIP-004 proposal, are there any new policies that can alleviate the miners’ mortgage problem?

Space Race 1 and 2 were specifically designed to help onboard miners and bootstrap the network. Over 500 miners participated in the nearly two-month network build, with initial pledges subsidized so new miners could build operational expertise and help improve the network.
For those who choose not to join the space race and start now, Codefi, Huobi and others are developing new lending tools that allow miners to get collateral upfront to start mining FIL by sharing their future earnings. At the same time, PL will also support miners through microloans to provide collateral guarantees through third-party providers. For miners and token holders, lending is a great option to increase investment while benefiting the network - we hope to see more participation soon.

4. What are the specific parameters and time of the lending model?

There are several lending programs hosted by different independent organizations (Huobi, CodeFi (coming soon)). You can always contact these organizations. Most loan providers will evaluate collateral requirements, risk of slashing, overall storage reliability, team strength, and other variables that indicate long-term orientation and reliable storage operations.
By working with partners (TBA), PL continues to invest in the long-term success of the network and miners, providing small loans to miners seeking to grow their operations until the loan market can be expanded.

5. Why convert testnet tokens to mainnet tokens?

We announced on September 27th, a few weeks before the mainnet launch, that the mainnet would begin as a continuation of the testnet. “The Space Race testnet will continue to run and gradually enter the mainnet over the next 3 weeks through protocol upgrades and state transitions,” the Filecoin project said in a blog post.
This was a deliberate decision to ensure the security of the Filecoin network by inheriting the tremendous mining power and community built during the testnet, including balances and rewards earned throughout the Space Race competition. These tokens will be converted to mainnet tokens when the network is upgraded. These awards are intended to recognize the tremendous contributions of miners, both large and small, who have helped stress test and improve the network over the past few months.

6. When will FIP004 be launched, or has it already been launched?

FIP-4 was designed weeks before the mainnet launch, with careful consideration of cryptoeconomics and miner profitability. It enables immediate 25% storage mining rewards without vesting - a balance between short-term miner growth and long-term network adjustments.
Last week, all 4 Filecoin implementations approved the FIP, which is included in Lotus v1.1 released today. Miners must complete the upgrade before block height 170,000 (approximately 6:40 am Beijing time on the 23rd).

7. When does the loan program start?

There are multiple lending programs hosted by independent organizations - Huobi, CodeFi (coming soon), and many others. You can always contact these organizations.
By working with partners (TBA), PL continues to invest in the long-term success of the network and miners, providing small loans to miners seeking to grow their operations until the loan market can be expanded.

8. If I am a miner and do not want to mine anymore, how can I get my staked coins back?

Block rewards are designed to reward reliable and useful storage. Collateral provides storage and consensus security. Miners can accept penalties and stop mining at any time, but the initial deposit will only be returned if a certain sector's commitment is fulfilled.

9. There were rumors of a "miners' strike" over the weekend - is that true?

In reality, we haven’t seen any large miners shut down their operations yet - so I wouldn’t characterize this as a strike. The fact is that miners are growing slower than they were before launch. This is largely because the network is no longer subsidizing their staking and fee costs - fees now cost real money, and miners need to match their growth rate with token flow.

Miners are still actively proving their storage capacity - we are seeing 2PiB added every 3-4 hours. While most miners are aligned with the project for the long term, there are some who are using this as an excuse to push things and try to get more. Filecoin's priority is to get the mechanics and long-term ROI right, not react to short-term noise from speculators.

10. Where can I learn more about the retrieval market?

There is a lot of great work going on in the Filecoin retrieval market.

Just today, a panel discussion about building and what’s next during Liftoff Week took place with panelists David Ansermino, Elizabeth Binks, David Hyland-Wood, Robert Drost, Thomas Chardin, and Mike Goelzer.

11. Are smart contracts included in the development plan?

Yes, it’s definitely something we want, but we don’t have a very clear timeline for that yet — maybe in the first half of 2021. Because Filecoin is open source, the community can accelerate the development timeline for smart contracts and any other feature requests.

12. After SR2 is completed, will there be rewards for orders with real data? How to verify the real data with 10 times the computing power?

Please check out FIP3 for more information!

13. Any interesting light client designs? Many chains have put a lot of effort into this, I guess most don’t get the incentives and security measures right.

We are actively working on serving our own lightweight client right now! You can track our progress here: https://github.com/filecoin-project/lotus/issues/3532.

14. How does the cost of Filecoin storage compare to alternatives like AWS?

Check out Consensys Codefi’s Filecoin Storage to see the average FIL price per GiB and a list of miners making deals.

At the time of writing, the average price is 0.000043 FIL (or 0.001328 USD), while the average price for AWS S3 Basic tier is 0.023/GB/month.

15. What does “market making” mean? How does it affect the price of FIL tokens?

There has been some confusion about market making. Protocol Labs has previously stated publicly that PL will use tokens “to ensure market stability (buying and selling filecoins on exchanges to provide market liquidity, price stability, correcting imbalanced incentives for storage and retrieval miners, etc.”)
To this end, PL issued loans to independent liquidity providers (often called "market makers") around the network launch to provide stability in the first few hours after launch when prices are at risk of volatility. To be clear: these are not sales of FIL by PL.
These initiatives are primarily for the benefit of the community. Having liquidity in the first few hours of the market helps prevent price manipulation, ensures that small purchases do not cause large price movements, and helps prices converge across exchanges, preventing speculative trading arbitrage opportunities.

16. After the Space Race network transitioned to the mainnet, is there a new testnet now?

We plan to run many testnets with different configurations. Calibrationnet has been set up as a new long-running testnet that we plan to use for testing new releases and testing state upgrades before doing so in mainnet. It has the same parameters as mainnet, but supports 512 MiB sectors for faster testing.

17. Big miners, now the computing power is not increasing, but the weight is the same as the block explosion?

Many, many big miners are adding new sectors, and we are looking forward to seeing more new miners on the hashrate rankings. A small number of existing miners may choose not to add new storage, but that doesn’t matter - they will be eliminated by the network in a relatively short period of time. Filecoin’s crypto-economic mechanism rewards miners who are willing to add storage space to the network for a long time and are committed to storing real data.

18. If applications need to be connected, is it necessary to create and maintain dual nodes of ipfs and filecoin? Are there any other solutions?

Currently, a Filecoin (Lotus) node is required to develop and build applications. We are developing a suite of solutions to simplify this process. This will include light client functionality and the ability to make transactions without a synced node.
Unless the application in question requires one for some reason, an IPFS node is not required.

The maintenance cost of 19 nodes is not low. Have you considered setting up some public nodes?

Yes, we plan to set up some master nodes that users can use. We are also working hard to reduce the maintenance cost of nodes through snapshots and light users.

20. Are there any incentive policies for new miners to mine? Is it possible to not do the early pledge but only the later pledge?

Yes, mining accelerators and loan programs are being prepared for new miners. Pre-collateralization is for good reasons. It provides guarantees for storage reliability and consensus security. Filecoin mining, as a global economic platform supported by a distributed network, is more like being a landlord on Airbnb than Bitcoin mining. Pre-collateralization also makes miners the owners of the network.

21. Under the current economic model, miners need to spend tens of millions of dollars as collateral to start up their equipment, which is very difficult. Can you take care of those who have already invested all their funds in the machines?

The collateral requirement is not new, and the team has been advising against investing too much in sealing hardware for years. There are many ways to address this. If all funds have been used to seal hardware, consider collateralizing that hardware and taking out a loan. Filecoin mining hardware has a high resale value anyway. Miners can also start slow and increase capacity at a rate they see fit. The introduction of FIP4 will also help miners improve cash flow. Onboarding storage capacity is great, but the utility and quality of storage is critical, making Filecoin's economics stronger.

The collateral requirement is not new, and the team has repeatedly advised against investing too much in packaged hardware over the years. There are many ways to address this. If all funds have been invested in packaged hardware, consider collateralizing that hardware and taking out a loan. Filecoin mining hardware has a high resale value regardless. Miners can also start slowly and increase capacity at a rate they see fit. The introduction of FIP4 will also help miners improve their cash flow. Adding more storage capacity is great, but the utility and quality of the storage is more important, which will make Filecoin a more robust economy.

22. Is the order reward the amount of the price set at the time of the sector expiration, or the amount in the lotus-miner storage-deal list?

Transaction payments are based on the transaction agreement, and the amount is the same as the amount when the transaction is put on the chain. Transaction payments are gradually received as the storage space provider meets its commitment.

23. Why is the test network computing power all migrated to the main network? This is unfair to some people.

This is a well-considered decision that aims to ensure the security of the Filecoin network by inheriting the huge mining power and community built during the testnet, including the settlement balances and rewards earned throughout the Space Race competition. This is also intended to incentivize the huge contributions of large and small miners who have helped stress test and improve the network over the past few months.

24. Transactions also have a pledge option. Wouldn’t it be better to let the data party decide how much to pledge? Can the project party control the reward cycle and even give a pledge bottom line instead of a pledge upper limit?

This is the situation right now. The protocol stake requirement is a floor to provide storage reliability and consensus security. The purpose of the protocol stake requirement is to establish a baseline of reliability (while not being too high) to develop a strong network reputation. Storage space users can and should demand more transaction stake from their storage space providers to provide better security. Miners can offer higher transaction stakes to signal better quality of service.

25. Will Juan’s team participate in the Shanghai Vientiane Blockchain Week? Or will only the lab members in China participate? What specific activities are planned?
Juan is unable to come to Shanghai for the summit, but will give an online speech on 10/27 and participate in a roundtable discussion on public blockchain technology innovation with Vitalik and Gavin Wood on 10/28. We will also hold a Filecoin Open Day on 10/26. Please check out the detailed agenda and register for our Open Day event in Shanghai here!

26.Has PL considered using the linearly released portion of block rewards for pre-mortgage?

Yes, this has been discussed many times. For now, there are several reasons not to do this.

First, the locked block reward is part of the stake of the sector that won the reward. For sectors that disappear early, all rewards earned by the sector up to 90 days will be punished. If the locked funds are used as collateral, it will lead to insufficient sector collateral and prone to crisis. FIP-0004 is a different but more effective way to solve this liquidity concern without sacrificing too many incentives, providing guarantees for storage stability for storage users, and considering the overall utility of the network.

Second, without the initial collateral for each sector, the network would be insecure and could be attacked at a relatively low cost. After all, storage is cheap, and Filecoin mining uses general-purpose hardware with high resale value. The initial collateral is a way to protect the network from speculative and flash attacks.

Finally, the initial mortgage can be seen as a deposit for landlords to rent out their houses on decentralized Airbnb. It makes miners the protagonists of the platform economy and keeps incentives compatible with the success of the network. However, as the network iterates and new technologies emerge, there may be other improvements in the future.

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