Filecoin DeFi Bridge to Bring Liquidity to Storage Marketplace

By Alexander Behrens

With the Filecoin mainnet launch on the horizon, the decentralized file-hosting protocol will be getting a DeFi boost with help from Ren and Codefi.

ConsenSys Codefi released details today for the Filecoin DeFi Bridge and Storage Market, tools designed to bring liquidity to the Filecoin storage ecosystem and give users a complete view of pricing across the market. The services are scheduled to launch alongside the Filecoin mainnet release, pegged for October 15. 

The DeFi integration shows how important the burgeoning sector has become for the crypto space, impacting even projects like Filecoin that were in the works long before DeFi took off.

Filecoin stores data for customers on a decentralized network of hard drives and other physical storage. Storage providers set their own prices in a competitive marketplace, as customers look for affordable and reliable space to rent. According to the announcement, the financial incentive will make the storage more stable and secure for customers, compared to competing decentralized storage protocols like IPFS.

DeFi or decentralized finance protocols built on the Ethereum blockchain allow users to make financial transactions, such as borrow assets or swap tokens, without a centralized entity coordinating the activity. They instead rely on code known as smart contracts. Consensys Codefi provides a set of tools and services designed to help users access the DeFi ecosystem. (Consensys provides funding for an editorially independent Decrypt.)

Filecoin patrons use the protocol's token, FIL, to buy and sell storage space on the network. The Filecoin DeFi Bridge will allow FIL to be transferred to the Ethereum blockchain, where it can be used for DeFi operations like funding loans and earning interest using a token bridge developed by Ren Protocol. The DeFi compatibility is expected to bring liquidity to the Filecoin market that would have otherwise taken much longer to organically flow in.

Codefi will also release Filecoin Storage Market on October 15, a simple application for reading through pricing and storage provider information. Both Filecoin Storage and the Filecoin DeFi Bridge will be available via decentralized network accelerator Codefi Activate.

Filecoin raised more than $200 million in a 2017 Initial Coin Offering (ICO), and has delayed the launch of its storage network several times. With takeoff imminent, DeFi enthusiasm could be just what Filecoin needs to make a grand entrance when it finally arrives.

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