Miners "shut down", Filecoin is in fork crisis again

Two days after the launch of the Filecoin mainnet, a message about the "shutdown" of miners was widely circulated. According to reports, several leading miners collectively stopped mining or reduced computing power to "protest against the authorities."

Later, Lai Chuhang, chairman of Spacetime Cloud Technology, denied the "demonstration" claim in his circle of friends. He complained that the reason for stopping mining was that no one had coins for mortgage mining.

According to Filecoin's economic model, miners need to provide FIL as collateral before packaging sectors (mining), and the block rewards obtained will be gradually released linearly over 180 days. This means that if miners do not go to the secondary market to buy FIL, it will be difficult to have enough FIL for collateral mining in the early stage. When evaluating this economic model, Lai Chuhang angrily swore.

A confrontation over the economic model has begun. On October 18, Filecoin officially announced the FIP0004 proposal, which will change the block reward to 25% direct release and the other 75% reward to be released linearly over 180 days. If supported by the community, this proposal is expected to be implemented next week.

"Releasing 25% at one time is good for miners," said Hong Rui, partner of Golden Computing Cloud. He believes that this can alleviate the current situation of miners' "coin shortage" to a certain extent, but there is a risk of selling pressure in the short term at the coin price level. On the other hand, as FIL tokens continue to fall, the outside world has not stopped questioning the official sale of Filecoin tokens, and some people have begun to take the opportunity to fork Filecoin.

Amid various controversies, Filecoin's journey towards decentralized storage has been full of twists and turns.

Miners’ “shutdown” puts pressure on established economic models

On the evening of October 19, Filecoin founder Juan Benet appeared on social networks and sent more than 40 tweets in response to the many controversies since the launch of the Filecoin mainnet.

He claimed that the miners' "strike" was "pure nonsense", that there was nothing wrong with the Filecoin network, and that miners were making money. He then seemed to be saying that many people wanted to get rich quickly by using Filecoin without contributing value to the network, which was not how it worked, nor was it the reward for the protocol.

Juan believes that what is happening now is that the network computing power is growing slower than the test network before the main network is launched. This is mainly because the network no longer subsidizes miners' mortgage and fee costs. Now miners have to use real money to mine, and miners need to match their computing power growth and token flow.

According to the data from FILscout browser on October 20, the total computing power of the Filecoin network is 605.4PiB, which is only a slight increase of 4.6% compared with 578.38PiB on the second day of the main network launch. Judging from the network operation status in the past few days, the Filecoin main network is relatively stable, but under the current economic model, it is an indisputable fact that miners are "short of coins".

Filecoin's total network computing power is growing slowly

Zhan Xiaoming, CEO of Interstellar Continent, revealed that the current economic model cannot enable miners to fully utilize their computing power, and miners have no money to buy coins, so the network power growth is slow. The current strategy adopted by Interstellar Continent is to use some of the released tokens for mortgage mining every day to gradually increase computing power.

In fact, this economic model has long been written into the Filecoin white paper. "I am not surprised at all by this result," said Zhan Xiaoming.

Judging from the collective "shutdown" of many leading miners, they seem to hope to put pressure on the authorities in this way to speed up the release of block rewards. "There are too many mining machines, and without enough coins, they can't all be turned on. Miners are not willing to buy coins in the secondary market, so targeting the established economic model has become the only option." An industry insider told Fengchao Finance.

Huobi Exchange also provides IPFS computing power services. According to its calculations, currently every T of effective computing power requires a pre-stake of about 7 FIL. The exchange issued an announcement on October 20, stating that due to the strict official economic model, "the amount of pledged coins is large and the release is insufficient", making it difficult to increase computing power. "According to the current economic model, it will take about 90 to 100 days to reach a balance between output and pre-stake."

In the face of the "opposition" of miners, Filecoin officials recently announced the FIP0004 proposal. It proposes to change the release rules of blockchain rewards. The block rewards that were originally released linearly over 180 days will be released immediately at 25%, and the other 75% will be released linearly to allow miners to enrich the token flow in their hands. If all goes well, this proposal is expected to be implemented next week.

Juan said that this move was not a sudden reaction, but the result of discussions over the past few weeks. He believed that changes to the economic model required careful consideration, "unless there is a security vulnerability, no major changes are expected."

In addition, Juan also talked about loan solutions. Some miners hope to use USDT or BTC to borrow FIL for staking, rather than buying at high points in the market. Juan revealed that he has cooperated with relevant partners to provide small loans, and only allows miners to borrow for staking. However, he did not further disclose specific data such as the specific amount and interest rate.

The new proposal can solve the "immediate thirst". Is there a risk of selling pressure on FIL?

Industry insiders such as Xiao Xiansheng, founder of Yaochi, and Hong Rui, partner of Golden Computing Cloud, all believe that the FIP0004 proposal will help miners alleviate the current situation of "coin shortage". However, the problem that follows is that the faster release of block rewards means more selling pressure, and FIL, which has already fallen a lot, is at risk of further decline.

According to data from Huobi Global, on October 20, FIL was quoted at US$32, down 85.45% from its high of US$220 on the day of listing.

FIL's current price has fallen by more than 85% from its high point

The implementation of the FIP0004 proposal may trigger another game in the secondary market due to changes in the supply and demand structure of tokens.

Wang Chunhua, co-founder of Hufu, believes that if 25% of the storage miners' block rewards are released immediately, it will create a huge selling pressure. Any modification of the economic model will affect the balance of buy and sell orders in the secondary market, and an increase in output will inevitably increase the selling order. He suggested that miners should not be too impatient, as a sudden increase in output may be a bottle of poison.

OKEx Chief Strategy Officer Xu Kun analyzed that if the proposal to immediately release 25% of the block rewards is passed, it will not cause much selling pressure overall, because the demand for FIL is still very strong in the short term, and the price of the currency has a low downside risk in the short term. However, in the long run, if the market demand is not enough to support the market value, the value of the FIL token will be re-evaluated.

It is not difficult to see that if the FIP0004 proposal is implemented smoothly, it will solve the immediate problem for miners, but the impact of this change in the economic model on the long-term development of Filecoin is still uncertain.

Official selling controversy ferments Filecoin faces fork crisis

Since the launch of the Filecoin mainnet on October 15, this highly anticipated decentralized storage project has had a rough ride. In addition to the "shutdown" of miners, the controversy over the official sale of tokens has not subsided.

On October 15, an unknown account obtained 1.5 million FIL tokens, which flowed to multiple exchanges such as Huobi. According to the unlocking plan, early investors, officials and miners should only unlock 500,000 on the first day.

Filecoin officials later explained that these coins are mainly used for market making to maintain price stability. However, judging from the market, the price of FIL has experienced drastic fluctuations, with a sharp rise followed by a sharp fall, and is still at a low point.

On October 20, according to the FilFox browser, the above-mentioned "market making" address transferred out another 30,000 FIL, and the selling controversy continued to ferment.

Filecoin is facing a lot of negative public opinion due to the coin price plummeting and miners "shutdown". At this time, Tron founder Justin Sun also came out to add fuel to the fire. He tweeted that he hoped the SEC would investigate the official sale of 1.5 million FIL by Filecoin.

"Brother Sun will never miss any hot topic," some netizens joked. However, in Juan's opinion, Sun Yuchen's remarks may be an attempt to fork Filecoin. He also bluntly said on Twitter that Sun Yuchen is not a savior, just look at Hive and you will know, "Do you want to become a victim of a scam project?"

Although Justin Sun has not taken any substantial action on forking Filecoin, some people can no longer hold back.

On October 17, a project called Mingshi Protocol released an economic white paper and proposed the concept of "IPFS+DAO", claiming to fork Filecoin. In response to the current problems of Filecoin's economic model, Mingshi Protocol proposed to improve it with less pledge and fairer governance.

In fact, before the launch of the Filecoin mainnet, two forked projects, FilecoinVision and Filecash, were launched, but they did not attract much attention.

It is an indisputable fact that less than a week after the launch of the Filecoin mainnet, the "fork" rhetoric has already spread, which is obviously not conducive to the stability and unity of the community. Previously, Lai Chuhang, chairman of Spacetime Cloud, said that if the authorities ignore the situation of the miner community, the community consensus may split and the project may be worrying.

At present, despite the emergence of fork projects one after another, Filecoin is still the choice of most people. However, there are already voices of concern that if Filecoin cannot quickly break free from the current negative vortex, a real fork may eventually occur.