Wrapped Token’s Bridge of Filecoin with Ethereum’s DeFi A Boom for Miners
Chinese miners’ influence on the Filecoin ecosystem is set to get bigger with the Wrapped Filecoin (wFIL) launch of its mainnet to bridge Filecoin’s decentralized storage network with Ethereum.
The wFIL mainnet will enable Filecoin (FIL) miners to “borrow+convert renFIL to native FIL to run more storage miners”, the decentralized storage network states, as the open-source wrapping protocol seeks the bridge to bootstrap the adoption and development of Filecoin within the Ethereum and decentralized finance (DeFi) ecosystems.
With about 90% of Filecoin nodes reportedly concentrated in China even as there are renewed claims that large scale Chinese miners have taken over the network, the miners’ chances of using FIL as the collateral to engage in the Filecoin ecosystem in proportion to the storage space they provide would be increased.
The mainnet launch will also enable FIL holders to earn a return on their holdings by converting to renFIL and depositing into a lending protocol such as MakerDAO or Aave; on Compound for accruing interest; or to provide to liquidity pools like Uniswap, Balancer, or Curve, Filecoin adds. pointing at the move’s potential to unleash the next generation of storage and financial applications.
Using the bridge, FIL miners can borrow+convert renFIL to native FIL to run more Storage Miners. FIL holders can earn a return on their holdings by converting to renFIL and depositing into a lending protocol like @AaveAave.
— Filecoin (@Filecoin) December 2, 2020
Bridging Filecoin with Ethereum timely
2020 has been a milestone year for both Filecoin and Ethereum. Filecoin launched the largest decentralized storage network to transition to Eth 2.0, a bridge between the two key ecosystems couldn’t have come at a better time. With over $2 billion worth of Bitcoin tokenized on Ethereum already, the bridge will allow FIL holders to get exposure to the growing DeFi financial system on the second largest cryptocurrency Ethereum.
The ERC20 wrapper token will provide storage miners and Filecoin holders with access to liquidity on DeFi as it opens up new emerging services such as enabling new dApps at the intersection of Web3 storage and DeFi on Ethereum.
“Building a decentralized data and transaction infrastructure for the future of the internet depends upon interoperation between decentralized protocols like Ethereum and Filecoin,” says the Ecosystem Lead at Filecoin, Colin Evran. “This is an opportunity to build a new technological infrastructure that can change the nature of trust and power for the next generation of the web, one that will put data autonomy, decentralized verification, and tamper-proof data systems front and center for web and app development.”
The mainnet launch is particularly timely as Filecoin continues its global market expansion drive to challenge traditional cloud-storage giants such as AWS, Google Cloud, and Dropbox as it recently announced that its capacity has surpassed one exbibyte – or over one billion gigabytes – courtes of its over 670 active miners (majority of whom are reportedly in China).
Filecoin will be one of the major crypto projects that will gain from the decision by financial data provider, S&P Global Inc, to launch cryptocurrency indices in 2021 which is expected to make it easier for investors to access the new asset class, and reduce some of the risks of the very volatile and speculative market, according to Reuters. It adds that the move by one of the world’s most well-known index providers, which will use data from New York-based virtual currency company Lukka on more than 550 of the top traded coins, could help cryptocurrencies become more mainstream investments.