64% Surge in Active Deals and New Usage Cases Unleashed by Filecoin Virtual Machine

• Filecoin experienced a 64% QoQ increase in active deals in Q2’23 despite the severe effects of the SEC litigation against Coinbase and Binance. 
• Fileccoin storage capacity has remained stable, fluctuating between 5.05 PiB (pebibytes) and 6.14 Pib during the last quarter. 

Filecoin, a decentralised data service platform based on the Interplanetary File System (IPFS), has recorded a 64%  QoQ increase in active deals in Q2’23. Despite the coin facing severe effects from the SEC vs Coibase and Biance litigation, the QoQ record is impressive. 

1/ Curious about @Filecoin‘s Q2 2023 performance?

Filecoin’s performance in Q2’23 witnessed a 64% QoQ increase in active deals. Additionally, the Filecoin Virtual Machine enabled new usage cases.@tech_metrics and @JenniferOvat dive into highlights below. 🧵 pic.twitter.com/AgmQKDtmEH

— Messari (@MessariCrypto) July 13, 2023

The coin’s storage utilisation increased from 4% in Q1’23 to nearly 8% in Q2’23, causing storage capacity to decrease by 12% QoQ. The fees’ revenue has grown by 67% in USD to 91% and is heavily influenced by the 60% increase in large dataset clients and the 64% QoQ increase in active storage deals.

Although the FIL base fees increased by approximately three times QoQ, the coin’s penalty fee decreased by 17% QoQ and by 29% compared to the peak of $0.7 million in Q4’22. The high penalty fees in the past were caused by various factors, including the termination of basic storage units by storage providers before the agreed storage period. The  FIL/USD price

Dislocations lowered the profitability of the storage providers hence the discrepancy. 

Filecoin registered a decrease in supply-side revenue by 7% to 17.6 million FIL in Q2’23, down 16% in USD terms. Block rewards comprised more than 99.9% of FIL supply-side revenue, while tips accounted for the remaining negligible percentage. 

The minting mechanism of new FIL tokens relies on both baseline and exponential decay models. The baseline model accounts for 30% of the total tokens minted, and the block rewards are the highest to motivate participation and decline steadily with time. The baseline model accounts for 70% of the new tokens, and block rewards are allocated relative to storage capacity growth.  

Combining the baseline and exponential decay models helps Filecoin maintain block reward distribution participation in the early stages of the network. 

How Does Filecoin Work?

Filecoin uses the Filecoin Virtual Machine (FVM), which brought Ethereum-style intelligent contracts to the network, enabling new use cases, including perpetual storage, liquid staking and decentralised computation. The virtual machine has helped address the setbacks of relying on centralised data storage. 

Being a decentralised data service platform, Filecon serves both the supply and demand of the storage market. FIL, the native token, enables users and applications to access data-related services.

The Filecoin storage network is a peer-to-peer version of Amazon S3 built on the InterPlanetary File System (IPFS). The IPFS system is ‘the Filecoin network’s distributed data storage and sharing layer’.

Filecoin has recorded reliability growth in storage service. In the second half of April, the network increased daily failures. Still, it improved tremendously in the following months towards the end of Q2, recording fewer and fewer network failures. 

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