Editor’s Note: This blogpost is a summarised repost of the original content published on 25 April 2025, by Molly Mackinlay from FilOz. Founded in 2024, FilOz is a team of 14 protocol researchers, engineers, TPMs, and community engineers focused on securing, upgrading, and expanding the Filecoin network.
Introduction
Nearly five years into its launch, Filecoin – now the world’s largest decentralized storage network, caters to more than one type of user. It serves a diverse range of customer segments where adoption and traction are already taking hold. A strong signal of product-market fit is paying demand – users who see enough value to pay for the service.
This blogpost offers a comprehensive look at Filecoin’s Ideal customer profiles (ICPs), analyzes current adoption trends, identifies high-opportunity areas based on payment signals and data volume, and outlines key strategies to drive future client success.
Identifying and Targeting Ideal Customer Profiles (ICPs)
At the heart of this demand push is a clear focus on Ideal Customer Profiles (ICPs) – specific categories of users the network is targeting for adoption. These ICPs represent use cases where Filecoin’s decentralized storage offers immediate value. Paying demand is one of the strongest indicators of product-market fit, and Filecoin is seeing traction in several key segments:
Four Core Vertical Markets:
Large-Scale Data Clients (Primarily Web2): Traditionally focused on archival storage, now evolving toward faster reads/writes due to AI workloads. Think multi-exabyte archives with 24-hour retrieval tolerances.
Web2 Object Storage (e.g., AWS S3 alternative): Demands fast access, pricing competitiveness, Snowflake integrations, and strict controls over data locality—especially amid rising geopolitical tensions.
Web3 Object Storage: Adoption from decentralized websites, NFTs, social apps, and AI agents. Nascent potential includes data DAOs and decentralized AI use cases.
Web3 Chain Storage: Early traction from chains like Solana and Cardano, with data from Ethereum L2s scaling up to terabytes and petabytes. Strong potential, but more robust on-ramps are needed.
It’s also worth noting that beyond these four verticals, DePINs – particularly those collecting large volumes of consumer data are a key focus for 2025. In addition, edge computing and AI are emerging as high-potential sectors, driven by their rapidly growing, data-intensive workloads.
Mapping Filecoin’s Strengths to Its Most Promising Use Cases
To effectively serve the right customer segments, it’s essential to ask: what core strengths does the Filecoin network offer – and how can those be applied to the ideal customer profiles that stand to benefit most?
The following slide summarizes Filecoin’s strengths (and its learnings):
Building on Filecoin’s core strengths, the next slide highlights the key Ideal Customer Profiles (ICPs) driving real-world adoption today. It identifies which client segments are actively paying, which have rapidly growing data volumes, and where early adoption is gaining momentum:
While Filecoin has attracted paying users across various sectors, scaling from a few customers to a broad, thriving user base remains a key challenge. A major bottleneck is the lack of strong on-ramps specialized Layer 2 solutions – that serve high-volume, fast-growing ICPs like Web3 chain storage. This gap presents a clear opportunity for builders to develop targeted solutions.
Scaling client success ties directly to Filecoin’s 2025 core KPIs:
Revenue from on-chain paid storage deals: The main indicator of product-market fit. Despite off-chain payments, on-chain revenue is near zero. Bridging this gap with Proof of Data Possession (PDP) and Filecoin Web Services (FWS) is critical.
Growing a satisfied client base: Paying clients exist, but better transparency and dashboards are needed to track success.
Increasing service activity and value accrual: Tools like the USDFC stablecoin and FIP-100 protocol are in place, but accelerating on-chain payments and fee flows is essential.
To achieve this growth, several strategic steps are required, as outlined below:
Filecoin is actively transitioning from a capacity-focused infrastructure to a user-driven ecosystem. With a sharpened focus on ICPs, a maturing network of on-ramps, and powerful protocol innovations, it’s well-positioned to scale demand and adoption. Key challenges, especially around on-chain revenue and retrievability remain, but the foundation for sustained growth is rapidly taking shape.
To learn more about State of Client Adoption and ICPs for Filecoin, explore the following talk that happened during FDS-6:
Disclaimer: This information is for informational purposes only and is not intended to constitute investment, financial, legal, or other advice. This information is not an endorsement, offer, or recommendation to use any particular service, product, or application.
Editor’s Note: This blogpost is a summarised repost of the original content published on 25 April 2025, by HQ Han from Ansa Research. Ansa Research is a research firm focused on distributed infrastructure. The firm covers digital networks aiming to rebuild how internet infrastructure operates.
Executive Summary
Filecoin has now entered the next phase of development, focusing on users, demand generation and adoption.
In this regard, Filecoin is not alone – while DePIN networks have now proven very successful at bootstrapping supply, the focus of this sector has also now turned towards demand.
There has been some exciting progress on Filecoin’s demand story:
Growth in the underlying demand for Filecoin’s services
We are seeing data clients in both Web2 and Web3 paying for storage on Filecoin. In some cases, Filecoin has been chosen in parallel or over Web2 providers.
The storage provider landscape is reflective of this – whilst capacity and # of SPs have dropped, there has been an increase in quality and data utilization on the network – showing a shift in network resources towards demand
There is a pathway to scale
Filecoin is still expanding its core services to cater to demand with important protocol level upgrades – F3, PDP, and Filecoin Web Services (FWS)
New Filecoin-powered storage solutions have come to market (Akave, Storacha, Recall etc) – and all already charging for deals within their target markets
DeFi continues to scale on FVM – notably, FIL-backed stablecoins coming online
Storing more data on the network and creating multi-service APIs creates the building blocks to bring compute needs to the data
Filecoin is at an inflection point as its services mature to meet the demands of AI, enterprise & nation state focus on data locality, and global cost-cutting driving orgs away from costly Web2 cloud providers.
This blog post examines Filecoin’s adoption, including milestones and use cases, its scaling path via infrastructure, tooling, and coordination, and cryptoeconomics, covering incentives, token dynamics, and network sustainability.
Adoption & Client Demand
Over the past year, Filecoin has seen a rise in paying customers, with projections suggesting over 1 EiB of paid storage deals could close in 2025. This would raise the network’s utilization from its current 29% to nearly 100% with fully paid usage.
The number and quality of leads are growing, driven by efforts from teams like Ansa Research and the Filecoin Foundation, who are actively sourcing paid deals for on-ramps and Storage Providers. Business development has also shifted focus toward high-potential DePIN categories, particularly those collecting large volumes of consumer data as well as Web2 clients with archival and hot/cold storage needs.
Filecoin’s network utilization has risen to around 29%, signaling increased demand. A growing number of large-scale clients (storing over 1,000 TiB) possibly in the enterprise and/or long-term archival space, demonstrates that efforts by on-ramps and Storage Providers (SPs) are on the right path.
After earlier declines as the network shifted its focus from generating supply to generating demand, average daily new deals have recently increased by over 10% from Q3’24 to Q4’24.
The Storage Provider (SP) landscape is shifting from a focus on raw capacity to delivering useful, client-driven storage. In its early phase, the network prioritized onboarding as much storage as possible, often without regard for actual usage or retrievability. Now, as Filecoin emphasizes demand generation and adoption, SPs are adapting by pursuing paid deals and ensuring robust data retrieval. This marks a clear move from quantity to quality, with incentives increasingly aligned to real-world client needs – reflected in a 388% year-over-year surge in the number of SPs achieving successful retrievals.
The network’s path to scale is envisioned along three main lines:
Expanding core protocol capabilities with the introduction of Proof of Data Possession (PDP), Fast Finality (F3), and Filecoin Web Services (FWS)
Launching new on-ramps and Layer 2 solutions to support vertical-specific adoption
Improving economic efficiency through decentralized finance (DeFi)
1. Expanding Core Protocol Services
Filecoin will go through key protocol updates, primarily;
Proof of Data Possession (PDP) – that has shipped as of 8th May 2025, and Storage Providers can participate in PDP SPX, a short-term initiative to onboard select Storage Providers to test, validate, and demonstrate Proof of Data Possession (PDP).
Fast Finality (F3) – that has arrived early and went live on Filecoin Mainnet as of April 2025, bringing 100x improvement on transaction speeds
Filecoin Web Services (FWS) – a composable service marketplace for offering multi-service deals
Introduced last year as part of Filecoin’s broader vision, Filecoin Web Services (FWS) marks a major step toward expanding the network’s capabilities beyond storage. At its core, FWS is a composable service marketplace that enables users to bundle multiple services—such as cold and hot storage, retrieval, compute, and encryption—into a single deal.
FWS aims to offer a more flexible and integrated alternative to traditional Web2 cloud platforms. It also opens the door for other DePIN networks to offer and resell their services within the Filecoin ecosystem. With integrated payments and escrow, FWS supports the creation of customizable service combinations, enhancing utility for both consumers and enterprises.
A key part of Filecoin’s scaling strategy is the emergence of new storage on-ramps, functioning like Layer 2s – that are launching mainnets and targeting specific verticals. These startups tailor Filecoin’s storage stack to meet the needs of niche markets, helping to establish beachhead use cases. Notable examples include:
Akave: Focused on Web2 enterprises, Akave offers a hot storage layer on top of Filecoin, supporting archival, hot/cold storage, and S3 integrations. They’ve also integrated with Snowflake.
Storacha: Targeting Web3 applications in social, AI, and identity, they specialize in storage solutions for decentralized platforms.
Recall: Aimed at the AI sector, specifically towards AI agent storage and data processing.
Filecoin’s DeFi ecosystem is growing, playing a key role in improving economic efficiency across the network. A major focus is on stablecoins, which help retain economic activity within the ecosystem. Secured Finance has introduced USDFC, a FIL-backed stablecoin that allows FIL holders and Storage Providers to use their tokens as collateral instead of selling them—similar to MakerDAO on Ethereum.
The central forecast: FIL’s circulating supply growth is expected to slow and may turn negative or deflationary by late 2026. This shift stems from a combination of reduced token issuance and increased demand sinks that lock or remove FIL from circulation.
Supply-Side Pressures Easing
Several key developments are reducing new FIL issuance:
Vesting Completion: Token vesting from early stakeholders, including Protocol Labs and the Filecoin Foundation, ends in October 2026 – removing a major source of new tokens.
Decreasing Block Rewards: FIL block rewards follow a declining emission schedule by design.
FIL-Backed Stablecoins: Stablecoins like USDFC by Secured Finance allow FIL holders to use tokens as collateral instead of selling, keeping more value within the network and reducing sell pressure.
Demand-Side Sinks Growing
At the same time, FIL demand is increasing through new utility and locking mechanisms:
Rising Collateral Requirements: Storage Provider collateral is set to increase in 2025, partly due to a fix under FIP-81 that enhances locking behavior.
Increased Protocol Revenue: FIP-100 is projected to boost FIL-denominated revenue, much of which is burned or otherwise removed from circulation.
Together, these trends suggest a pivotal moment in Filecoin’s economic evolution: a potential transition to a deflationary supply model, signaling a tighter and potentially more valuable FIL economy.
[Disclaimer: Circulating supply analysis is based on a 3rd party model: https://mechafil-jax-web-levers.streamlit.app/ These models are based on many assumptions, and should not be relied upon as the source of truth. There are many factors that can and will affect the actual numbers. Simulations should not be relied upon and are for illustrative purposes only. DYOR and adjust the model yourself, or build your own models in Dune.]
For those looking to dive deeper into the Filecoin ecosystem, Ansa Research has compiled a curated directory of key metrics and data sources. These resources provide essential insights into network health, development trends, and adoption signals – making them useful for both regular monitoring and deeper research.
Whether you’re tracking protocol upgrades, storage deals, or adoption patterns, this data directory is a valuable starting point for your own analysis.
Filecoin is entering a new phase centered on demand, adoption, and long-term sustainability. With supply successfully bootstrapped, focus has shifted to real usage – evidenced by rising paid storage deals, potentially exceeding 1 exabyte by 2025, and a shift toward higher-quality, retrievable data.
Key upgrades like Proof of Data Possession (PDP), faster finality (F3), and new Layer 2 solutions are unlocking capabilities across data and DeFi, including FIL-backed stablecoins that help retain value within the network.
At the same time, token issuance is set to slow, with vesting ending in late 2026 and block rewards declining – while demand sinks like collateral locking (FIP-81) and protocol revenue (FIP-100) increase. Together, these trends suggest a potential shift to a deflationary FIL supply and a more mature, sustainable network economy.
To listen to the entire talk by HQ Han (Ansa Research) at FDS-6, watch here on YouTube:
Disclaimer: This information is for informational purposes only and is not intended to constitute investment, financial, legal, or other advice. This information is not an endorsement, offer, or recommendation to use any particular service, product, or application.
Editor’s Note: This blogpost is a summarised repost of the original content published on 26 March 2025, by Luca from FilOz. Founded in 2024, FilOz is a team of 14 protocol researchers, engineers, TPMs, and community engineers focused on securing, upgrading, and expanding the Filecoin network.
Introduction
As Web3 applications mature, fast and reliable access to data becomes just as important as storing it. Whether it’s video streaming, serving assets for dApps, or powering AI agents with on-demand data, retrievability is a foundational piece of user experience.
Unlike traditional cloud providers where data retrieval is instant and guaranteed by a centralized service (often aided by CDNs), retrieval of data in Web3 introduces new challenges — spanning considerations around network performance, data redundancy, storage provider reliability, and incentive alignment. Filecoin has built the world’s largest decentralized storage network and how to tackle retrievals on that foundation deserves some exploration. How should Filecoin evolve its retrieval capabilities in a decentralized internet? What is the best approach for its users?
This guide aims to unpack the state of Retrievability on Filecoin, exploring where we are today and where improvements are needed. What we will aim to cover:
Overview of Retrievability on Filecoin, including key strategies, challenges, and improvements
Explore retrieval strategies and protocols, their guarantees, and limitations
Outline payment models and how SPs and clients can select each other
Highlight potential protocol-level improvements to enhance retrievability
Retrievability on Filecoin
Filecoin enables decentralized storage, allowing clients to store data with Storage Providers (SPs) and retrieve it on demand. Unlike storage, which is provable through Proof of Replication and Proof of SpaceTime, retrieval is a separate process that isn’t always provable, depending on protocols and strategies addressing various challenges.
Retrievability on Filecoin is influenced by factors such as:
Network and SP performance
Data availability
Retrieval optimization protocols
There is no one-size-fits-all solution for retrievability. The best strategy depends on a client’s needs, including retrieval speed, reliability, and cost constraints. Clients can choose simple retrieval from a single SP for non-critical data or more complex solutions like redundancy, SLAs, or off-chain backups for mission-critical files. Advanced protocols, like Spark or CDN integration, offer higher performance but come with added costs or complexity.
Trust plays a crucial role in decentralized storage networks like Filecoin. Without trust, retrieval failures or delays can occur, especially with payment strategies like upfront payments. A CDN-like solution (e.g., retriev.org) could address these trust challenges by:
Providing monitoring services to ensure SPs meet obligations
Offering arbitration to resolve disputes and penalize non-performing SPs
Ensuring retrieval promises are backed by financial incentives and penalties
Filecoin offers various retrievability options, from redundancy models to retrieval networks and off-chain solutions. Below is a summarized table of these options:
For the full breakdown on Retrievability Options on Filecoin, read here.
Key Metrics
When evaluating retrievability, clients need to consider several performance metrics that measure different aspects of the data retrieval process. These metrics ensure that data is not only stored but also accessible and retrievable efficiently when required. Key metrics include:
Availability Metrics: Measure the likelihood of data being accessible and quickly recoverable when issues arise. High availability and redundancy ensure retrieval even if some systems or replicas fail.
Performance Metrics: Assess retrieval speed and responsiveness, impacting user experience. Factors like throughput and latency are influenced by network bandwidth and data availability.
Reliability Metrics: Reflect the consistency and stability of data retrieval, including success rate, error rate, and data integrity. High uptime ensures high availability, while a low error rate guarantees data accuracy and successful retrieval attempts.
Cost-related Metrics: Help balance performance with cost efficiency, particularly in managing retrieval speed, bandwidth usage, and associated costs.
Quality Metrics: These metrics measure the overall quality of the retrieval process, ensuring a satisfactory user experience.
By grouping the metrics into these categories, clients can evaluate retrievability from multiple dimensions, ensuring efficient, reliable, and cost-effective data access. Below is a comprehensive list of key retrievability metrics, grouped by their category:
Retrievability on Filecoin combines payment options (how value is transferred) with payment strategies (when and under what terms payments occur). This modular structure allows clients and Storage Providers (SPs) to tailor agreements based on performance, trust, and cost considerations.
Selecting Storage Providers (SPs) for retrievability in Filecoin requires balancing control, cost, reliability, and trust. This process involves two key aspects: the deal-making process and the selection mechanism. Just as clients must carefully choose SPs, SPs also evaluate which client retrieval requests to fulfill, following the same two key components—deal-making and selection mechanisms.
Deal-Making Process
The deal-making process determines how clients and Storage Providers (SPs) establish retrieval agreements, balancing control, efficiency, and risk. It involves two key approaches:
Direct Negotiation: Clients and SPs engage directly to define retrieval terms, including cost, performance guarantees, and service conditions. This method offers full control but requires manual effort and carries risks such as extended negotiations, misunderstandings, and potential SP unreliability.
Automated or Delegated Deal-Making: Intermediaries or automated systems—such as content delivery networks (CDNs), smart contracts, or auction systems—facilitate the process. This reduces manual effort, optimizes terms based on real-time data, and enables market-driven pricing. However, it can introduce additional costs, reduced control, and reliance on third-party mechanisms for enforcement and dispute resolution.
SP Selection Mechanisms (POV of a Client)
Once the deal-making process is determined, the actual selection mechanism defines how the SPs are chosen. These can range from reputation-based systems to auction-based or automated selections.
Below is summarised table on the various selection mechanisms:
For the full breakdown on SP Selection Mechanism, read here.
Client Selection Mechanisms (POV of a Storage Provider)
Once the deal-making process is determined, the client selection mechanism helps further narrow down on which clients’ retrieval requests the SP wishes to fulfill. Below is a summarised table to cover the various mechanisms:
For the full breakdown on Client Selection Mechanism, read here.
Next Steps
Retrievability guarantees for data stored on the Filecoin Network is essential for its long-term success and sustainability. However, we also recognize that each user may have distinct needs, preferences, and requirements when it comes to data accessibility and security guarantees.
To address this, we foresee a modular approach that allows users to select from a diverse range of services and combine them in a way that meets their specific retrievability and reliability goals. This flexibility will enable users to tailor their storage solutions to their unique use cases, ensuring both customization and scalability.
A promising path forward for enhancing retrievability guarantees on the Filecoin Network involves integrating advanced protocols and tools. By leveraging technologies and protocols like CDN Gateways, reputation systems, smart contract-powered storage solutions and incentives, we can create a more robust and reliable infrastructure.
These combined innovations will not only improve data accessibility and security but will also foster the overall growth and resilience of the Filecoin ecosystem.
For more pieces from FilOz, check out their Medium page here.
To stay updated on the latest in the Filecoin ecosystem, follow the @Filecointldr handle or join us on Discord.
Disclaimer: This information is for informational purposes only and is not intended to constitute investment, financial, legal, or other advice. This information is not an endorsement, offer, or recommendation to use any particular service, product, or application.
2024 has been a pivotal year for Filecoin, with significant progress in the Filecoin Virtual Machine (FVM), Storage, Retrievals and Compute. In this blogpost, we’ll recap the key milestones of 2024 and take a look at the major growth drivers shaping Filecoin’s path into 2025.
Accelerating Paid Deals: Boosting paid services (storage, retrieval, compute) on Filecoin to generate cashflow for service providers. This helps to support more sustainable hardware funding beyond token incentives.
Growing On-Chain Activity: Increasing activity through programmable services, DeFi, and new use cases.
Becoming Indispensable: Establishing Filecoin as an integral component of other projects and businesses.
These priorities are not mutually exclusive – they layer onto each other and are all signs that the Filecoin ecosystem is growing increasingly valuable.
So how did we fare across these priorities in 2024?
1. Accelerating Paid Deals
Paid Deals is an ecosystem-level metric that reflects the volume of paid services within the Filecoin network. FilecoinTLDR is currently tracking this metric here.
In 2024, Filecoin made significant strides in accelerating paid deals by reducing friction for businesses entering the ecosystem, with key advancements like the development of Proof of Data Possession (PDP) and the emergence of Layer 2 solutions.
Enabling Efficient Hot Storage with PDP
Projected for Q1 2025, Proof of Data Possession (PDP) introduces a new proof primitive to the Filecoin network, marking the first major proof development since Proof of Replication (PoRep) and Proof of Spacetime (PoSt). Unlike PoRep, which excels at cold storage through sealed sectors, PDP is designed for “hot data”, which is data that needs fast and frequent retrieval.
This new proof type enables cost-effective “cache” storage on Filecoin without sealing and unsealing, enabling rapid data onboarding and retrieval. PDP opens the door for a new class of storage providers focused on hot storage and fast retrievals, benefiting onramps like Basin, Akave, and Storacha.
Scaling Filecoin with L2s
In 2024, we saw a rise in Layer 2 solutions built on top of Filecoin (We also covered this in our earlier blogpost “State of L2s on Filecoin”). L2s like Basin, Akave and Storacha enable both horizontal and vertical scaling with secure, customizable subnets. These L2s enhance Filecoin by unlocking new use cases: including managing data-intensive workloads, supporting AI and unstructured data, powering gaming and privacy-focused applications — all of which create more opportunities for paid deals.
2. Growing On-Chain Activity
Filecoin has made notable progress in accelerating on-chain activity through the FVM, which spurred growth in its DeFi economy. The proposed Filecoin Web Services (FWS) and launch of FIL-collateralized stablecoins are set to further boost this momentum.
As of December 16 2024, more than 4,700 unique contracts have been deployed on FVM, enabling over 3 million transactions. DeFi activity on FVM saw average net deposits exceeding 30M FIL ($200M), driven by staking, liquid staking, and DEXs, with GLIF leading at 62%, followed by FilFi (10%) and SFT Protocol (9%). Net borrows averaged 26M FIL ($173M), highlighting strong growth in Filecoin’s DeFi ecosystem.
FIL-Collateralized Stablecoin for the Filecoin Ecosystem
USDFC is a FIL-backed stablecoin launched by Secured Finance in Q4 2024 to address key challenges in the Filecoin ecosystem. It introduces stability to a network previously lacking stablecoin options, reducing volatility and enhancing value storage, much like DAI did for Ethereum.
By allowing FIL holders and SPs to collateralize their assets for USD, USDFC helps cover operational costs without selling FIL, preserving asset value and network support. It also boosts liquidity in lending markets by providing FIL-backed stablecoin liquidity, driving more efficient capital flows within the Filecoin ecosystem.
3. Becoming Indispensable
DePIN gained prominence, with Filecoin strengthening its position through key partnerships with AI and compute projects. Meanwhile, on-chain archival received significant recognition through major on-ramp partnerships.
“…thanks to Filecoin for building an awesome decentralized archive layer. “ –Anatoly (Solana Co-Founder)
Notable On-Ramps of 2024
At Solana Breakpoint this year, Filecoin founder Juan Benet highlighted how Filecoin’s zero-knowledge (ZK) storage is securing the entire Solana ledger.
Similarly, Cardano apps now have the opportunity to boost data redundancy and decentralization through the Blockfrost integration with Filecoin.
SingularityNET’s integration with Filecoin (via Lighthouse) emphasizes the growing need for scalable and cost-effective storage in the AI-driven era, where managing vast amounts of data efficiently is critical.
These meaningful partnerships help signal Filecoin as a key player in both the Chain Archival and AI narratives.
This year, Filecoin has positioned itself as a key player in the growing field of Decentralized AI. The onset of projects within the ecosystem like Ramo (network participation), Bagel (AI & cryptography research), Swan Chain (AI training and development), and Lilypad (distributed compute for AI) highlight Filecoin’s expanding role in powering AI innovation.
2024 Filecoin Challenges
Despite the immense progress, we noted some challenges that the community faced. Though bearing in mind that Web3 products are still very early, and the problem statement of forming a credible alternative to the centralized cloud is a huge one.
Product Market Fit:
Roadblocks like limited retrievability and high costs (driven by data replication), challenge the efficiency of the Filecoin network.
There is a need to make payments easier by allowing transactions directly on the Filecoin network, using methods like stablecoins or flexible payment options.
Improving visibility into the onboarding process and using customer data can help refine strategies and boost performance in key areas.
Building a Sustainable Economic Model + Stronger Economic Loops:
Viewing Filecoin as an island economy highlights its focus on accruing value by exporting goods and services while also keeping as much value as possible within the network by minimizing outflows.
A key challenge lies in reducing external outflows while finding ways to boost exports and capture more demand within the ecosystem.
Ensuring that transactions remain on-chain is equally crucial to strengthening this economic model and creating stronger economic loops.
Filecoin’s 2025 Outlook
Looking ahead to 2025, Filecoin’s evolution continues. Here are three key themes that could drive transformative growth for the network while addressing the 2024 challenges outlined above.
1. Accelerating Filecoin by 450x with Fast Finality (F3)
Fast Finality (F3), is one of the most impactful upgrades to Filecoin’s consensus layer since the launch of its mainnet. By drastically reducing transaction finality times, F3 overcomes a key limitation of the network’s original consensus mechanism. This enhancement is scheduled to go live on the mainnet in Q1 2025.
Old vs. New Finality:
Before F3, Filecoin’s consensus mechanism ensured secure block validation but required 7.5 hours (900 epochs) to finalize transactions, which was too slow for applications like smart contracts or cross-chain bridges.
With F3, transactions can now optimistically finalize in minutes—a 450X improvement.
What this means for Filecoin:
Enhanced Speed & UX: Transactions finalize within minutes, enabling low-latency applications and eliminating the long waits previously experienced.
Expanded Use Cases & Accessibility: L2 subnets like Interplanetary Consensus (IPC), Efficient smart contracts and decentralized applications, Blockchain bridges for interoperability with other chains.
Ultimately, this allows Filecoin to improve its usability across a wider variety of applications.
2. Moving Beyond Storage with FWS
Filecoin Web Services (FWS), emerged this year as a pivotal concept. It represents a strategic shift for Filecoin, expanding its scope from primarily a decentralized storage network to a broader marketplace for blockchain-based cloud services. This diversification can attract a wider range of users and use cases, potentially creating more positive economic loops within the network. Here are some pointers on why FWS should be on your radar:
Strengthening Filecoin’s Competitive Edge: FWS will introduce features like Programmatic SLAs (which automate and enforce service agreements through smart contracts, ensuring clear performance expectations and penalties) and Verifiable Proofs(which provide cryptographic evidence of service delivery, allowing clients to independently verify service execution).
Expands Filecoin’s Capabilities: Goes beyond Proof of Replication (PoRep) by adding Proof of Data Possession (PDP), enabling robust hot storage use cases. PDP will help improve data retrievability, a crucial factor in achieving product-market fit that has been widely discussed within the Filecoin community this year.
Positions Filecoin as a leading platform in the decentralized web: FWS will facilitate the integration of multiple networks and protocols, creating a cohesive marketplace for storage, compute, bandwidth, and other services. This could make Filecoin a key player in the growth of the decentralized web.
FWS is currently a concept in development, with a new storage service featuring PDP (v0) underway. Following this milestone, the development of the FWS marketplace will begin with its expected launch in Q1 2025.
3. Unlocking new value streams in Filecoin
As a Layer 1 blockchain, Filecoin primarily generates revenue through gas fee burns (which happen when chain resources are used or when faults arise). However, relying on gas fee burns as a main source of revenue is not scalable and more importantly increases operational expense costs as well as service costs.
A sustainable approach involves value returning to the Filecoin economy through the use of services in the FWS marketplace, fostering a more scalable and balanced revenue model. A proposed value accrual mechanisms includes:
FWS Fees: Commission (%) charged based on the transaction volume in the marketplace.
Service Fees: Applied when a user accesses a service or a vendor provides one
SLA Penalties: Imposed on service providers who fail to meet agreed-upon performance standards
This shift promises a more robust and diversified revenue stream, ensuring Filecoin’s continued relevance and profitability in the evolving market.
Final Thoughts
As data grows in value, we expect advancements in privacy-preserving machine learning, data-driven business models, and the increasing role of AI agents in unlocking decentralized storage’s potential.
Looking towards 2025, with the upcoming Fast Finality (F3) launch on the mainnet and the continued development of Filecoin Web Services, Filecoin is set to play a central role in shaping the future of data and AI within decentralized ecosystems. We expect to see these advancements positioning Filecoin beyond storage and unlocking a sustainable economic model through new revenue streams generated by FWS.
To stay updated on the latest in the Filecoin ecosystem, follow the @Filecointldr handle or join us on Discord.
Many thanks to HQ Han and Jonathan Victor for reviewing and providing valuable insights to this piece.
Disclaimer: This information is for informational purposes only and is not intended to constitute investment, financial, legal, or other advice. This information is not an endorsement, offer, or recommendation to use any particular service, product, or application.
At first, the convergence of artificial intelligence (AI) and blockchain seemed like an awkward pairing of buzzwords—a notion often met with skepticism among early adopters. But in merely a year’s time, decentralized AI has evolved from being an obscure idea to one that is central to conversations around the Web3 environment. Such swift transformation owes its momentum to a few crucial elements:
Influence of AI: AI is set to significantly impact how we interact with the world. As AI agents grow more sophisticated, they will manage tasks like financial transactions and personal coaching. This evolution raises important questions about control and governance in AI development.
The Risks of Centralized Power: Centralized AI models controlled by a few tech giants pose serious risks, including bias, censorship, and data privacy concerns. This concentration of power stifles innovation and creates vulnerabilities, as highlighted by the recent security breach at Hugging Face.
The Demand for an Inclusive AI Ecosystem: Decentralized AI offers a pathway to a more equitable and accessible AI landscape by distributing computational processes across various systems. Key benefits include:
Reduced Costs: Lower barriers enable smaller developers and startups to innovate in AI.
Enhanced Data Integrity: Verifiable data provenance increases transparency and trust in AI models.
Combating Censorship: Aligning AI development with market needs fosters a more democratic technological environment.
These points highlight the value of an alternative approach to centralized AI.
Decentralized AI comprises 3 pillars: leverages idle computing power from users, utilizes secure decentralized storage, and implements transparent data labeling.
Decentralized Storage: Utilizing decentralized storage networks like Filecoin ensures secure and verifiable storage for large datasets.
Decentralized Compute: By leveraging idle computing power from individual users and distributing tasks across a network, Decentralized AI makes AI development more accessible and cost-effective.
Decentralized Data Labeling and Verification: Transparent and verifiable data labeling processes help ensure data quality and reduce bias, fostering trust in AI systems.
A closer look: Decentralized AI Projects in the Filecoin Ecosystem
To take a closer look into how the Web3 stack can offer benefits to the AI space, we’ll explore the various approaches 4 decentralized AI projects are taking. These projects are utilizing some or all of the pillars of decentralized AI as outlined above.
Ramo plays a crucial role in powering AI workloads by coordinating capital and hardware. By merging resources from various providers, Ramo facilitates the execution of complex tasks such as storage, SNARK generation, and computation, while allowing hardware resources to be jointly funded across multiple networks.
Multi-Network Jobs: Ramo supports jobs across multiple networks (e.g., read from Filecoin, process on Fluence, write back to Filecoin), helps maximize hardware providers’ revenue and reduces coordination complexity.
Swan Chain – Decentralized AI Training and Deployment (Funding Stage: Seed)
Swan Chain is a decentralized compute network, connecting users with idle computing resources for AI tasks like model training. Filecoin serves as its primary storage layer, ensuring secure, transparent, and accessible storage of AI data, aligning with the principles of decentralized AI.
Decentralized Compute Marketplace: Swan Chain aggregates global computing resources, offering a cost-effective alternative to centralized cloud services. Users can bid for computing jobs, and Swan Chain matches them with suitable providers based on requirements.
Filecoin Integration for Secure Data Storage: Swan Chain utilizes Filecoin and IPFS to securely store AI models and outputs, ensuring transparency and accountability in the AI development process.
Support for Diverse AI Workloads: Swan Chain supports various AI tasks, including model training, inference, and rendering, with examples like large language models and image/music generation.
Lilypad – Distributed Compute for AI (Funding Stage: Seed)
Lilypad aims to build a trustless, distributed compute network that unleashes idle processing power and creates a new marketplace for AI, machine learning, and other large-scale computations. By integrating Filecoin and utilizing IPFS for hot storage, Lilypad ensures secure, transparent, and verifiable data handling throughout the AI workflow, supporting an open and accountable AI development landscape.
Job-Based Compute Matching: Lilypad’s job-based model matches user-defined compute needs (e.g., GPU type, resources) with providers, creating a marketplace for developers to share and monetize AI models within the decentralized AI ecosystem.
Bagel – AI & Cryptography Research Lab (Funding Stage: Pre-Seed)
Bagel is an AI and cryptography research lab creating a decentralized machine learning ecosystem that enables AI developers to train and store models using the computing and storage power of decentralized networks like Filecoin. Its innovative GPU Restaking technology enhances Filecoin’s utility for AI applications by allowing storage providers (SPs) to contribute to both storage and compute networks simultaneously, thereby expanding support for AI developers and generating new revenue opportunities for SPs.
Increased Revenue for Filecoin SPs: Bagel helps storage providers monetize both storage and compute resources, boosting their income and incentivizing greater network participation.
Optimized Compute Utilization: With dynamic routing, Bagel directs GPUs to profitable networks, maximizing efficiency and returns for providers and users.
In Conclusion
The intersection of Filecoin and AI marks a significant step forward in the evolution of technology. By combining verifiable storage with computing networks, we are not only addressing current challenges but also paving the way for future innovations. As these technologies continue to develop, their impact on AI and beyond will be profound, offering new possibilities for businesses and developers alike.
To understand more about Ramo, Swan Chain, Lilypad or Bagel dive into the respective keynotes and links here:
To stay updated on the latest in the Filecoin ecosystem, follow the @Filecointldr handle or join us on Discord.
Many thanks to HQ Han and Jonathan Victor for reviewing and providing valuable insights to this piece.
Disclaimer: This information is for informational purposes only and is not intended to constitute investment, financial, legal, or other advice. This information is not an endorsement, offer, or recommendation to use any particular service, product, or application.
Layer 2 solutions (L2s) are essential innovations in blockchain technology that enhance the scalability, efficiency, and functionality of their respective networks. For Filecoin, an L1 focused on decentralized storage, L2 solutions play a crucial role in bringing new capabilities to the base infrastructure of the network.
As Filecoin continues to grow, L2 solutions are helping bring Filecoin to market, and creating tailored offerings to builders focused on specific verticals. This post explores the current state of L2 solutions on Filecoin, highlighting the pioneering advancements and future directions.
Underlying Architecture
Before diving into the L2s, it’s useful to understand the shared framework that many of Filecoin’s L2s are built on: Interplanetary Consensus (IPC).
InterPlanetary Consensus (IPC) is a framework designed to solve the problem of scalability in decentralized applications (dApps). IPC achieves this by allowing the creation of subnets, which are independent blockchains that can be customized with specific consensus algorithms tailored to the needs of the application. These subnets can communicate seamlessly with each other, minimizing the need for cross-chain bridges – but anchored into the root Filecoin network.
Builders are drawn to IPC for several reasons. First, IPC subnets inherit the security features of their parent network, ensuring a high level of security for the dApps they host. Second, IPC leverages the Filecoin Virtual Machine (FVM), a versatile execution environment that supports various programming languages, allowing for greater interoperability with other blockchains. Finally, IPC’s tight integration with Filecoin, a large decentralized storage network, offers dApps easy access to robust data storage and retrieval capabilities. This combination of scalability, security, interoperability, and storage integration makes IPC an attractive choice for developers building the next generation of dApps.
Advancements in Data Management with Filecoin’s L2 Solutions
As the demand for efficient data management increases, Filecoin’s Layer 2 solutions are rising to meet these needs. These advancements focus on optimizing data storage and retrieval, offering enhanced scalability and cost-effectiveness across various applications. Basin is one such startup leading the charge.
Basin, the first data Layer 2 on Filecoin, represents an advancement in decentralized data infrastructure, bringing a swath of new services into the Filecoin ecosystem targeted at data heavy applications:
Key Features and Innovations
Hot and Cold Data Layers: Basin’s dual-layer approach incorporates a hot cache layer for real-time data access and a cold storage component for long-term archiving. This setup ensures both immediate accessibility and cost-effective storage, catering to diverse data needs.
Scalable Infrastructure: Basin’s architecture combines Filecoin’s secure storage capabilities with a flexible, scalable design ideal for handling high-volume data from IoT and AI applications.
Familiar Interfaces: Basin supports compatibility with S3, allowing developers to use familiar tools for managing data, which facilitates a smoother transition to decentralized solutions.
Basin is being actively used in real-world applications, such as handling weather data for decentralized stations with WeatherXM, and generating synthetic data for smart contracts. These use cases highlight Basin’s ability to efficiently store, manage, and monetize diverse data types, advancing practices in AI and machine learning.
Simplifying Decentralized Storage: Innovations and Challenges
Efficiently managing decentralized storage involves overcoming challenges related to user accessibility, cost, and integration. Providing more intuitive and cost-effective tools for data management will help address these challenges – and this is where Akave comes in.
Akave is the first L2 storage chain powering on-chain data lakes, offering a novel approach to managing large volumes of data within a decentralized network. Data lakes are used in traditional enterprises to manage all types of data – typically feeding into large scale compute flows (e.g. for big data analytics). By leveraging Filecoin’s infrastructure, Akave aims to become a leading solution in decentralized data management, with a focus on enhancing data handling capabilities and integrating advanced security measures.
Key Features and Innovations
On-Chain Data Management: Akave focuses on creating on-chain data lakes, which provide a highly scalable and secure solution for managing large volumes of data directly on Filecoin.
Advanced Data Handling: The platform supports customizable data handling options such as replication policies and erasure coding, enhancing data security and availability.
Integration with Filecoin: Akave leverages Filecoin’s blockchain for improved data management, security, and decentralization.
Akave’s Decentralized Data Lakes revolutionize data storage with faster local access by placing data close to compute stacks, cutting egress costs compared to centralized clouds, and ensuring immutability and integrity through ZK Proofs. Users benefit from competitive pricing and diverse options via an open marketplace. Continuous visibility into data status and history is provided through Akave’s integration with Filecoin’s InterPlanetary Consensus (IPC), enhancing transparency and trust.
Enhancing AI and Unstructured Data Storage with Filecoin’s L2 Solutions
In the realm of AI and unstructured data, specialized storage solutions are crucial for managing and processing large datasets efficiently. Filecoin’s Layer 2 solutions like Storacha Network are stepping up to provide high-performance storage tailored for these needs.
Storacha Network is a cutting-edge storage solution designed to enhance the management of AI and unstructured data. Leveraging Filecoin’s robust infrastructure, Storacha Network offers high-performance decentralized storage tailored for advanced applications. Looking ahead, Sriracha envisions evolving into a federated network with increased public participation, aiming to enhance global data access through a decentralized CDN and fostering broad community involvement.
Key Features and Innovations
High-Performance Storage: Storacha offers decentralized hot object storage, ensuring rapid access and retrieval of data, essential for AI applications that require quick processing and scaling.
Provenance and Ownership: Users maintain control over their data through UCANs (User-Controlled Authorization Networks), providing secure, cryptographic proofs of data ownership and access rights without frequent blockchain interactions.
Efficient Data Handling: Storacha handles large datasets by sharding files, facilitating quick retrieval and efficient management, crucial for large-scale AI operations.
Storacha Network supports a range of AI use cases by providing fast, scalable object storage optimized for both structured and unstructured data. It addresses key needs such as verifiability and provenance for decentralized GPU networks, ensuring that training processes are executed as expected and checkpoints are maintained.
Additionally, Storacha allows users to bring their own storage to training jobs, facilitating the sharing of hyperparameters and weights while ensuring ownership of training results.
In Conclusion
To wrap up, Filecoin’s Layer 2 solutions are paving the way for a new era in decentralized data management. Innovations like Basin, Akave, and Storacha Network are not only addressing the challenges of scalability and cost but also enhancing the efficiency and performance of data handling. As these technologies evolve, they promise to transform how data is stored, managed, and utilized, marking significant progress in the Web3 ecosystem.
Many thanks to Jonathan Victor for reviewing and providing valuable insights to this piece.
Disclaimer: This information is for informational purposes only and is not intended to constitute investment, financial, legal, or other advice. This information is not an endorsement, offer, or recommendation to use any particular service, product, or application.
At the latest Filecoin Developer Summit (FDS), Nicola Greco(of FilOz) introduced a vision to evolve Filecoin’s decentralized cloud services: Filecoin Web Services (FWS). FWS aims to provide a framework for deploying composable cloud services – allowing new protocols to bootstrap into a shared marketplace of offerings, all composable with each other.
Expanding Beyond Proof of Replication: Expanding the functionality of Filecoin
To understand FWS, it’s useful to first recap how the existing service offerings exist inside the Filecoin network.
The core storage offering, Proof of Replication (PoRep), allows storage providers to use proofs over uniquely encoded data to show that they are still in possession of specific pieces of data. Filecoin uses PoRep both for storage and for consensus – this requires higher security parameters, and therefore makes Filecoin’s base storage offering akin to cold storage. This makes Filecoin’s base offering ideal for datasets that might have a need for strong guarantees around uniqueness and existence but can accept slower access times.
Furthermore, because Filecoin launched prior to the FVM, much of the onchain tooling (e.g. to set up and maintain storage deals, to enable payments) exist as “system actors” or non-programmable functions on the network. This means many of those functions were built to support the original storage functions on the network – but for any evolution would require a full network upgrade in order to modify or support new functionality.
However, as more storage on-ramp’s pushed into building storage solutions for customers, it became clear that there was a need for more storage offerings over and above the base offering from Filecoin. As a result, new types of proofs (such as proof of data possession) have been proposed to run on the Filecoin network – allowing for more use cases to be natively supported.
In designing these new offerings to sit on top of Filecoin, it became clear that many of these new proof offerings would need generalized versions of the onchain tooling that exists as “system actors” – such as payment rails. Rather than having many systems independently evolve their own architecture (and risk losing composability), a new proposal was put forward to focus on building modular, composable systems via FWS.
Introducing Filecoin Web Services: A Modular Approach to Cloud Services
At the core of Greco’s vision is the concepts of modularity and reuse. If each new service were to build their entire protocol from scratch, they’d need to develop work ranging from deal management to escrow and SLA enforcement – which would lead to a high barrier to entry for new services. FWS proposes a unified protocol that standardizes these components, allowing developers to focus on building specific services rather than recreating the entire stack.
FWS would serve as a thin, opinionated layer that manages payments, collateral, deal structuring, and SLA enforcement across various services. This standardization would enable seamless integration of new services, whether they are storage-related like PDP and retrieval services or entirely new offerings like markets for zk-SNARK proofs or AI-based computations. By providing a common framework, FWS would reduce complexity, lower development costs, and increase the rate of development for building within the Filecoin ecosystem.
The Power of a Unified Marketplace: Enhancing Efficiency and Accessibility
One of the key benefits of FWS is its potential to streamline the user experience. Without FWS, users would need to lock tokens in multiple smart contracts to access different services, leading to inefficiencies in collateral management and prepayment and increase users’ cost. FWS envisions a single entry point where users can determine how they’d like to pay – prepaid or pay-as-you-go – with the same rails being usable by multiple services. This model mirrors the convenience of traditional cloud services, where users simply provide a payment method and are periodically billed.
Moreover, by consolidating financial management into a single contract, FWS would improve collateral efficiency and reduce the overhead associated with managing multiple service contracts. This would also allow utilization of one service to enable credit in other services – allowing a credit history to be built up across disparate protocols. This approach not only simplifies the user experience but also enhances the overall liquidity and flexibility of the Filecoin ecosystem.
A Vision for the Future: FWS as a Distribution Layer for Decentralized Services
Looking ahead, Greco envisions FWS not just as a tool for enhancing Filecoin’s storage capabilities but as a broader distribution layer for decentralized services. As the ecosystem grows, FWS could facilitate the integration of multiple networks and protocols, creating a cohesive marketplace for storage, compute, bandwidth, and other services. This would position Filecoin at the center of a vibrant, interconnected ecosystem, driving innovation and adoption across the decentralized web. By offering a marketplace for diverse services such as zero-knowledge proof generation, decentralized compute, FWS could position Filecoin as a leading platform in the decentralized web, supporting a wide array of applications beyond storage.
To understand more about FWS, watch the full keynote by Nicola Greco on Youtube
Many thanks to Jonathan Victor for reviewing and providing valuable insights to this piece.
Disclaimer: This information is for informational purposes only and is not intended to constitute investment, financial, legal, or other advice. This information is not an endorsement, offer, or recommendation to use any particular service, product, or application.
