Miners complained about Filecoin’s mining economic model even before the mainnet was launched. Despite the fact that the normal functioning of the network hasn’t affected, the existing economic model for the miners have triggered a dispute in the Filecoin community.
According to the latest reports, five prominent miners have switched off their machines to protest the project’s economic model which they claim to be “unfair” since it requires a massive amount of FIL tokens to start mining operations.
Conflicting Economic Model
Filecoin network was essentially built to be a next-generation marketplace for the purpose of data storage and retrieval, a space that has been mostly dominated by industry behemoths such as Amazon, Microsoft, and Google. An edge that Filecoin has, in this case, is that it provides its users with data storage and transmission services in a decentralized mechanism through various servers offered by its miners with commodity hardware.
Here’s the catch. Filecoin miners need to stake a large amount of its native FIL tokens as ‘Initial Pledge Collateral to initiate their mining operations. Despite the fact that the platform utilizes the collateral as leverage, as it turns out the miners do not have the required tokens in the first place.
And none of the other ways to get more FIL tokens are viable. On a similar note, Julien Bouteloup, the Founder of the DeFi investment firm Stake Capital, said it appears impossible for the Filecoin miners to economically participate in the ecosystem at the current valuation.
Nico Deva, a Twitter user, claimed,
“Miners provided huge support to the Filecoin team during the dev years, and now are rekt. The much anticipated Filecoin launch has turned to a shit show and disappointment. Mood is gloomy around here.”
FIL’s Price Fluctuation
FIL token had a tough rise as well. The coin jumped to saw an increase if over 250% even before the mainnet went live. This could be attributed to the leading cryptocurrency exchanges such as Binance, Kraken, Gemini among others flocking in to list the token of the popular platform.
However, shortly after the launch, FIL fell from more than $110 to the press time price of $32.27 slashing over 70% in a span of just three days.