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Codefi

ConsenSys Codefi to Launch a Filecoin DeFi Bridge and Storage Market

by James Beck, Mally AndersonOctober 1, 2020
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The Filecoin decentralized storage ecosystem will launch mainnet this month with a Codefi Activate-powered marketplace application and Ethereum-linked lending protocol

Decentralized storage is a critical part of the Web 3.0 architecture. One of the most promising and ambitious projects to challenge the economic and storage paradigm of data is Filecoin. This peer-to-peer network allows for faster and cheaper storage of data, reduces reliance on centralized servers, and even enables access to the web while offline. Inherent in Filecoin’s design is a marketplace for decentralized storage.

From lending and borrowing platforms to stablecoins and tokenized BTC, the burgeoning Ethereum Decentralized Finance (DeFi) ecosystem has launched an expansive network of integrated protocols and financial instruments representing over $11B in value. ConsenSys Codefi, which provides tokenization, trading, and compliance products for the DeFi sector, has added support for Filecoin and will use its Activate platform to catalyze the launch of the Filecoin network.

Today we are excited to provide the first glimpse of how Codefi Activate will help to accelerate adoption of the Filecoin network. First, Filecoin Storage will enable users with hosting needs to find the best storage prices from the most reputable miners. Second, the Filecoin DeFi Bridge will enable liquid markets for lending and borrowing Filecoin on Ethereum’s robust DeFi markets to ensure an adequate and liquid supply of Filecoin is available for use on the Filecoin network.

How Filecoin Works

On the Filecoin network, users pay storage miners to store their files. (Note that Filecoin is a complementary protocol to IPFS; the difference is that Filecoin incentivizes storage and therefore offers stronger persistence guarantees.) Storage miners on Filecoin run software and hardware to store files for clients and get compensated for doing so in the native cryptocurrency (FIL). Filecoin’s blockchain records transactions to send and receive FIL, along with proofs from storage miners that they are storing their files correctly. Typical file types include archival data — so it’s persistent forever — and decentralized web applications.

The Filecoin mainnet will officially launch at epoch 148,888, which is expected to occur around October 15th, 2020. Codefi Activate will offer two products to bring essential usability to the early market dynamics of the Filecoin mainnet. Filecoin Storage, a robust Filecoin miner marketplace, will help data miners to provide the best prices and customers to browse the best prices from data providers. Critical to the early economic incentives of the network will be the Filecoin DeFi Bridge between Filecoin’s FIL cryptocurrency and Ethereum, which will enable Filecoin holders to tokenize their FIL in Ethereum-based DeFi protocols. These tools will be accessible for everyone through intuitive Codefi interfaces that combine insights into Filecoin’s network stats and data with a seamless flow into lending/borrowing FIL or making storage deals.

Filecoin Storage

Along with the DeFi Bridge, Codefi Activate is launching Filecoin Storage to provide the best view of the Filecoin storage market, accessible through a web app as well as an API. The goal is to make price discovery for storage on the Filecoin network simple and transparent.

The Filecoin Storage app will consist of a simple, searchable marketplace that lets ecosystem participants get a full picture of the Filecoin storage market and allows clients to filter, sort, and find the best miners for their needs. Filecoin miners, who offer data storage services, can use the app to announce their pricing and availability to a marketplace browsed by clients, who engage with miners to store and retrieve data through storage deals.

Both apps will be available through Codefi Activate, a platform that facilitates the launch of decentralized networks and accelerates network user participation. Its mission is to remove the complexities of participating in decentralized networks by facilitating interactions between network users, enablers, and creators. The Activate dashboard provides users with a macro-economic overview of the particular network. This dashboard distinguishes and presents live network information so a user can understand what next action to take with their tokens.


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DeFi Bridge

The Filecoin DeFi Bridge connects Filecoin to the thriving DeFi financial system on the Ethereum Mainnet. It enables conversion of the Filecoin FIL cryptocurrency to ERC-20 tokenized FIL using a token bridge powered by Ren Protocol. Once on Ethereum, FIL holders and miners can deposit their tokenized FIL as collateral in a DeFi lending market to earn interest or borrow more FIL to stake on storage mining operations.

When the Filecoin mainnet launches, the circulating supply of FIL will at first be low. Since network users need to stake FIL in order to run storage miners, ensuring a liquid supply of FIL through these lending markets is a critical element of building out the storage market and driving network utilization. By introducing the ability for FIL holders to lend and borrow their FIL via the ERC-20 bridge, the vast pool of liquidity and economic activity in Ethereum DeFi will become available to the Filecoin ecosystem. Ethereum-native DeFi users interested in trading wrapped Filecoin and accelerating the network’s development can use the Codefi-built platform to deposit ETH-based assets as collateral, borrow wrapped FIL, and convert it to native FIL to store data or engage with the Filecoin network.


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Going to Market with Filecoin Mainnet

The Codefi team is excited to support Filecoin’s much-anticipated Mainnet launch in mid-October with these two new offerings. Filecoin Storage will go live with Mainnet so miners and users can gain visibility into the storage market right away, and Filecoin DeFi Bridge will be available soon thereafter. Stay tuned for updates on both products in the coming weeks and get ready for Filecoin Liftoff!

Sign up for Codefi updates to be notified when Filecoin Storage and Filecoin DeFi Bridge are ready to use.