overview
STFIL is the first community-owned, decentralized, trustless liquid staking protocol launched on FEVM. Provide an open platform for all Filecoin community users to better connect FIL holders and storage providers. With the ultimate goal of increasing storage computing power and improving the service quality of distributed storage networks, all participants can share network rewards while obtaining liquidity.
What is the status quo?
Due to the inherent mechanism limitations of Filecoin. In the traditional mining mode, there are many challenges:
1. More professional hardware equipment and a more professional operation and maintenance team also require a large amount of early pledge;
2. The joint mining model in the market has risks such as authority management and opaque income distribution. Doing evil by holding the Owner wallet often happens;
3. Sector pledge rules limit the liquidity of funds, and the behavior of users terminating sectors in order to obtain liquidity will also seriously affect the quality of distributed storage networks and users' confidence in Filecoin;
4. There are more than 16w small wallet addresses holding more than 10FIL in the Filecoin network. This is obviously a big market, but it is difficult for these retail investors to participate in mining or lose information on storage providers.
5. The demand deposit interest rate of the centralized exchange is very low, about 2%.
How does STFIL work?
The STFIL protocol can solve these problems well. First of all, STFIL is open to all currency holders and storage providers (SP). In the STFIL protocol, the decentralized smart contract is completely responsible for receiving node commissions and managing fund transfers. All parties can only work within the scope of the agreement, which ensures that funds are not manipulated by any party. The contract code is completely open source, and multiple rounds of audit reports have been completed (the audit report of the cerkit team has been completed). A bug bounty program will also be launched to encourage users to find and fix potential vulnerabilities. These efforts are all to protect the safety of users' funds.
STFIL will be managed by the decentralized autonomous organization DAO, which is responsible for conducting due diligence on storage providers, operating and governing the community. All STFIL ecosystem participants have the right to vote on proposals to promote a diverse and self-sustaining ecosystem.
FIL Holders
1. No lock-up period
Users can pledge their FIL to the agreement at any time to obtain stFIL to obtain loan income; the STFIL protocol encourages storage providers to repay and new users to participate in the pledge through an interest rate model dominated by supply and demand.
2. Real-time income
stFIL is an interest-bearing token (ib-token). The stFIL held by the user will be calculated in units of seconds, which will be directly reflected on the balance of stFIL.
3. Lower risk
Compared with other current forms of participation, it is less risky; because STFIL pools all penalties and losses that occur within the entire protocol, thereby minimizing the impact on any single user. In addition, out of responsibility for user funds, storage providers should first bear the losses caused by poor maintenance, followed by risk reserves, and finally all stFIl holders in the pool. Based on a huge user base, a small amount of loss of individual nodes is imperceptible to users.
4. More stable income
High-quality storage providers, stable node operation and revenue are the basis for maximizing user benefits. Therefore, STFIL will use DAO to screen out better storage providers and provide them with higher loan amounts. And it will contact the storage provider as soon as a node has a problem, and negotiate the best solution to the problem.
5. Low threshold
The rules of the pledge cycle and storage computing power in the Filecoin network are transparent to users. What users care about is not how much storage computing power they have purchased, nor do they need to care about which storage provider they pledge FIL to. Users only need to know whether the current interest rate meets their expectations. Moreover, users can use almost any wallet to participate in the protocol as long as they have 1FIL, users can participate in the pledge.
6. More playability
At any time, the STFIL protocol will constantly mint (destroy) the same amount of stFIL as the pledged (unpledged) FIL, which represents the right to claim the pledged FIL. So stFIL and FIL have equal value! While users hold stFIL to obtain income, they can also be used for transfer, sale, and even as collateral for other DeFi ecology. This is unprecedented!
How to achieve liquidity?
The STFIL protocol has designed a completely decentralized interest rate model dominated by market supply and demand. The loan interest rate of SP will change with the utilization rate of the fund pool. The protocol is expected to reach the optimal state when the capital utilization rate = 80%. At this time, protocol users can get a good annualized income (80% of the income generated by the funds is distributed to 100% of the users), and 20% of the funds are used as working capital. When the capital utilization rate exceeds 80%, the loan interest rate will rise rapidly, which will encourage SP repayment and stimulate new users to participate in pledge!
Because the smart contract guarantees the 1:1 exchange of stFIL and FIL at any time. Therefore, in extreme cases, the liquidity depletion caused by the run is only temporary. Because the user knows that his FIL assets will not be lost, they can always exchange stFIL for the same amount of FIL at some point in the future, and they will also get very considerable interest!
At the same time, the agreement also plans to establish an LP pool of stFIL and FIL in the secondary market. He will make up for the lack of liquidity in the primary market in extreme cases (users can choose to exchange 1 stFIL for less FIL here). SP can also get more stFIL with less FIL in the secondary market (because they know stFIL is FIL) to hedge against high debt interest
Storage Providers
When the storage provider has already run a node, it can delegate the authority of the already running node to the smart contract to start "leverage mining". The smart contract will automatically set the initial maximum loan leverage for the storage provider according to the selected entrustment method (Beneficiary/Owner) and the assets on the node. It only needs to pay a very low cost to add computing power to the existing nodes. Therefore, SP can maximize its own income through borrowing!
STFIL hopes that more high-quality storage providers will join in the construction of the network, improve the service quality of the entire network, and jointly create a robust, stable, and user-friendly distributed storage network. Therefore, we are willing to provide more loan support for high-quality storage providers who have submitted KYC. The agreement will conduct due diligence on storage providers through DAO (the purpose is to understand the team's capabilities and contact you at the first time.)
It is worth noting that the loan obtained by SP can only be used as sector collateral to increase the storage computing power of the node. STFIL will introduce a safety buffer index to limit loan withdrawals. When the node's assets are lower than the index, withdrawals will be restricted. At any other time, SP can withdraw cash freely.
Finally, SPs are free to choose their repayment strategy, and they are free to leave as long as all debts are paid off, and the agreement will not restrict their freedom.
set operator
SP can set up a node operator to be responsible for daily operations on the platform, such as borrowing, repayment, and cash withdrawal (the FIL withdrawn by the node will only be transferred to the Owner's address before joining the job).
Two Debt Strategies
SP can choose the debt of the following two interest rate strategies according to the needs after joining the company
1. Variable rate debt: At any time, the interest rate of variable-rate debt will change in real time as the utilization rate of funds in the protocol pool changes, which can provide a fairer and more transparent market pricing mechanism.
2. Stabilized rate debt: The interest rate on stable-rate debt remains constant for a fixed borrowing period, which is usually suitable for SPs that want predictable returns over a specific period of time.
Among them, the maximum loan interest rate in the STFIL interest rate model is calculated based on the current annualized income of the Filecoin network, which ensures that SP will not have negative income at any time.
About liquidation
The storage provider also has the responsibility and obligation to ensure the stable operation of the node, so the storage provider should give priority to the losses caused by poor maintenance; when the node is continuously punished due to special circumstances, and the punishment borne by the storage provider exceeds the maximum After the value, at this time anyone can become a liquidator to liquidate the node and get rewards from it. However, after each liquidation, the ratio of node assets to debts will always be constant, which means that at any time, the storage provider has its own assets on the node. STFIL hopes to improve the storage provider’s Willingness to restore the node.
STFIL expects every Filecoin ecological user to join and build a powerful Filecoin network together. If you want to learn more, you can start from www.stfil.io, or you can scan the QR code below.
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