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Filecoin has launched its own stablecoin for payments on its network

Filecoin, a decentralized network providing storage space for users is currently working with ConsenSys to expand its digital marketplace on the widespread Ethereum network. ICHI, a protocol known for creating decentralized networks, has announced oneFIL, a stablecoin for the abovementioned network’s community.

oneFIL’s primary purpose is to offer a stablecoin for transactions that are required to support application development on the network. The stablecoin also aims to enable better discounts and incentives for Filecoin storage buyers and providers.

What is a stablecoin?

It is a type of cryptocurrency that is typically pegged to a fiat currency and is generally less volatile than traditional cryptocurrencies like Bitcoin. However, oneFIL differs from traditional stablecoins too. It’s because this stablecoin is backed by other stablecoins and ‘over collateralized’ by a mix of USDC and Filecoin (FIL).

What is Filecoin?

Filecoin provides mass cloud storage for users through a peer-to-peer network. On their network, users pay to store files on computers designed with the mind of keeping them safe and secure. The price of the storage is determined through open markets rather than a traditional storage company.

Diagram showing a four-step process for storing files with Filecoin. First step: User who wants to store a file pays miner to store their file. Second step: Miner commits publicly via Filecoin’s blockchain to storing the file. Third step: The network constantly verifies that miners are storing files correctly. Fourth step: User pays miner to retrieve their file.
Infographic explaining the process of storing and verification of data on Filecoin

Here users pay to store files on storage miners. These are systems that store files and prove that they have actually allocated resources for that over time. Users who want to store files or incentivize through sharing their storage space can join Filecoin. A major advantage to the platform is that since it’s decentralized, there is no single authority dictating the price of storage over any machine. Moreover, it facilitates open markets for storing and retrieving files that anyone can participate in.

How will oneFIL work?

Filecoin includes a blockchain and native cryptocurrency called FIL. Miners who store files earn units of FIL. Filecoin’s blockchain records transactions to send/receive FIL, along with proofs from storage miners that they are storing their files correctly.

However, an issue with FIL is prone to volatility like other cryptocurrencies. oneFIL enables Filecoin users to opt in for a reliable unit of exchange and reliable unit of account.

Previously, users had to sell their FIL in order to buy any other stablecoin. However, with oneFIL, this is not an issue anymore.

Each oneFIL can be minted with $1 of value in two parts: renFIL + USDC. Users can also deposit oneFIL to earn ICHI. Through this, with the collaboration of ICHI with Protocol Labs, ConsenSys, and Ren Protocol, an ecosystem of decentralized storage offerings can be built leveraging renFIL on the Ethereum mainnet.

Moreover, oneFIL provides a stable way for providers and consumers to exchange web3 storage services while opening up a new yield generation for FIL and renFIL holders. Overall, oneFIL provides a good opportunity for storage miners to secure their network’s native cryptocurrency FIL through a stablecoin which is far less volatile and therefore more secure than traditional cryptocurrencies.

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