In Brief
- A consortium of miners and VCs in China, led by the MIX Group, is threatening to fork FIlecoin weeks ahead of its mainnet launch.
- It's about money: the miners are mostly angry about the reward structure.
- The proposed fork is supposed to start testing tomorrow, though it's unclear whether this is simply a bargaining tactic.
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Though the launch of Filecoin’s mainnet is still some weeks away, MIX Group, a Filecoin mining company, plans to fork the hotly anticipated blockchain, Weiping Han, MIX’s chairman said during a press conference in Xiamen earlier today. Han added that he had the support of many Filecoin miners and influential VCs such as Jun Du, co-founder of Huobi and founder of Node Capital.
It’s not clear whether the planned fork is real, or simply a threat and a way to negotiate terms that are more favorable to miners.
Filecoin, which raised $205 million during its ICO three years ago, is often compared to a “decentralized Dropbox” in which miners can earn tokens—known as FIL—for leasing out unused storage space on their computers to users. The stored data is secured via encryption, and distributed across the network in otherwise unintelligible chunks. While virtually anyone can rent out storage space on their computers, a number of big mining operations in China, with massive amounts of server storage at their disposal, have been jockeying for position.
A spokesperson for Filecoin was not immediately available for comment on the proposed fork.
The miners’ lament
Filecoin miners, a majority of whom are based in China, have been grousing that Filecoin’s mainnet launch has been delayed. (The blockchain was originally slated for a March start.) The miners have further complained that Filecoin has been unresponsive to community concerns, and is seemingly centralized in its governance.
More specifically, Han listed a number of miners’ technical grievances ranging from hardware restrictions to cryptography and transactional bandwidth. But the most important factor, perhaps, was what he labeled Filecoin’s “harsh” reward system to miners.
According to Han, a research paper published by Protocol Labs on August 27, Filecoin’s economic model could wash out as many as 80% miners after the mainnet launch.
That’s because miners must now provide an “Initial Pledge Collateral,” equivalent to 20 days worth of block reward and 30% FIL circulating supply target. These are capital and opportunity costs that many miners cannot afford, which irks the miners.
Second, the protocol will only allocate 30% of its storage mining allocation in “simple minting,” and the remainder in “baseline minting,” meaning miners can only harvest the initial 30% of their reward while waiting for the rest to be released linearly in the next 180 days. For miners who borrow to mine Filecoin, such a slow return mechanism could bankrupt them, Han said.
Lastly, Filecoin will implement a severe penalty for miners who commit technical errors or fail to follow processes such as submitting the certification of their storage commitment.
To fork or not
Han claimed that the new fork would start being tested as soon as tomorrow; he said he was aiming for a mainnet launch in October.
Han is not the first one to propose a Filecoin fork. An anonymous Filecoin fork project entitled Filecoin Vision was released on Github earlier in China today. Its proposed “new rules” are basically the reversal of Protocol Labs’ research paper.
Needless to say, publishing a research paper is not the same as mustering the hash power, let alone the expertise, to fork a technically challenging project. Filecoin’s delay is itself evidence that the protocol requires careful design and development.
Likewise, a substantial number of miners continue to back the project.
For Han and his fellow miners who want to advocate their rights, it might be easier to pressure the original Filecoin to budge than to establish a new chain.