Analyze the application of SFT on FIL after FVM upgrade

In a recent announcement, Filecoin stated that the FVM virtual machine (Filecoin Virtual Machine) would be launched at 15:14:00 UTC on March 14. All node operators (including storage providers) must upgrade to the latest version by that time.

FVM — what is it?

The Filecoin Virtual Machine (FVM) is a runtime environment for smart contracts (also called actors) on the Filecoin network. FVM brings user programmability to Filecoin, unleashing the enormous potential of an open data economy.

There are currently three issues with FIL

1. The liquidity of FIL held by ordinary users is low, and most of them can only be stored in exchanges, but the inflation rate of FIL is high.
2. FIL chain users have a small transaction volume, and most of their transactions are storage copy proofs or space-time proofs.
3. FIL miners have high costs and low flexibility. FIL miners urgently need products that can stake FIL.

Advantages after FVM upgrade

By implementing FIL’s FVM, developers will be able to create and deploy smart contracts, execute complex distributed applications, and realize the scalability of distributed ledgers and cryptocurrencies.

1. For miners: The stake assets of storage miners and future mining income will be protected by smart contracts, which will allow miners to use these loans to obtain users’ funds while reducing their costs.
2. For users: The user’s FIL can also be used safely for mining revenue; the circulation of the user’s FIL will also be reduced; and there are many eco-types of FVM, such as domain name, swap, loan, data DAO, etc., all of which will be strengthened by consumption.
3. For FIL: The burning of FIL tokens itself will also increase significantly. Furthermore, it facilitates the rapid expansion of FIL’s infrastructure in other directions, such as the search market (CDN service), and data computing (Bacalhau). The FIL stake amount and computing power will increase significantly as a result of this virtuous circle.

Business Ecology of The SFT Protocol and Filecoin Public Chain

The SFT Protocol is a decentralized protocol that provides liquidity for staked assets and builds high-performance public chain cloud nodes. In addition to providing privacy computing and distributed storage capabilities, it is also a platform provider.

The SFT protocol will first be applied to Filecoin (it will be applied to more public chains later), and the following methods will be used to solve the problems of the long stake time of FIL and weak token liquidity.

1. Smart contract management, open and transparent data.
2. Staking and redemption, Free entry and exit.
3. Earn: Compound perpetual; Regular income; Current income; Leverage; Farm staking; PancakeSwap-LP staking; Income lending.
4. Matching: FIL or USDT holders participate in lending and interest rate transactions through smart contracts and multi-signatures.

In addition, the SFT protocol will further build financial derivatives solutions in the Filecoin ecosystem: such as computing power lending, liquidity mining, options trading, pledge, lending, Swap transactions, cross-chain transactions, etc.

Summarize

Based on the data-based FVM ecosystem, more complex products can be developed: data DAOs; retrievable oracles; access to data without oracles; permanent storage contracts; under-collateralized lending markets for storage providers, etc.

From the perspective of the track, DeFi Dapps and NFT Dapps in the FVM ecosystem may attract more attention. One endow Filecoin with ecological financial attributes, like SFT Protocol, to solve liquidity of assets; one endows Filecoin with digital attributes for ecological assets. Filecoin will be able to mint NFT directly after FVM arrives.

The high scalability, openness, and financial attributes of the SFT protocol will further support the development of the FIL ecosystem, make full use of FVM, and support hardware service provider computer room networks and mining pool protocols. The SFT protocol promotes multiple participation modes of hardware service providers, packaging, revenue distribution, unlocking management and verification nodes, etc., to verify and monitor contract data. As a way to share liquidity, applications based on FVM are deployed to other chains (such as Ethereum, BSC, Solana, etc.).

Filecoin’s continuous improvement may lead to new and exciting use cases for the network and token in the future. On Filecoin’s storage public chain, Dapps can be built, and the storage layer communicates with FVM’s contract layer. By using Filecoin’s storage, we will conduct differentiated competition of the public chain, and we will actively promote the participation of token holders, ensuring rapid growth of the ecosystem.

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