Introducing the $FIL-Powered USDFC Stablecoin

Introduction

On November 11th, 2024, DeFi 2.0 fixed rate lending & borrowing protocol Secured Finance announced its plan to launch USDFC (USD for Filecoin Community) – an over-collateralized, FIL-backed stablecoin. This report examines the economic implications of a native stablecoin on the Filecoin economy.

Filecoin Basics

Filecoin is a decentralized file storage network that facilitates an open data storage and retrieval market. Built on the IPFS protocol to eschew reliance on specific cloud providers or devices, Filecoin supports various data types, including audio and video. Filecoin distinguishes itself from Amazon, Google, etc., through decentralization and economic incentivization to ensure data integrity and uptime. The latter is achieved through proof of replication (PoR) and proof of spacetime (PoSt), collectively known as proof of storage (PoStr). Filecoin supports a market for data storage and retrieval.

A storage provider (SP) stores data for customers on the network, while a retrieval provider (RP) provides timely access to data. An SP often doubles as an RP, though standalone RPs are permitted. In all cases, services are provided through deals outlining terms for data size, pricing, length of storage, and collateral. As of March 2023, deals had to last at least 180 days and no more than 540 days, during which SPs must continuously prove the availability and integrity of their stored data. Every sector of 32/64GiB has to submit a zk-SNARK proof every 30 minutes, and failure to do so results in collateral being slashed.

Please find the report below.