Question 1

What is FIL?

Accepted Answer

FIL is the native unit of account of the Filecoin network. It is used for users, storage providers, and on-chain participants to settle value for activities such as storage, retrieval, and on-chain messages; Filecoin is the network and protocol, while FIL is the monetary unit used by that network. FIL should not be regarded as IPFS's token merely because “IPFS” appears in its name. IPFS is a protocol related to content addressing and transfer; Filecoin organizes verifiable storage services and FIL settlement on its network. The two are related, but they are not the same thing.

Question 2

What is FIL used for?

Accepted Answer

FIL can be used to pay for storage deals, retrieval deals, and on-chain message fees. In a storage deal, a client and storage provider agree to preserve data for a specified term; in a retrieval deal, a retrieval provider sends a specified file to a client and charges FIL. On-chain message fees relate to the Gas consumed to include a message in a block, and the fee paid by the sender depends on the resources required by the message. Storage- or retrieval-service quotes are therefore not the same cost as on-chain message fees: the former correspond to service deals, while the latter correspond to resources consumed by a message entering a block.

Question 3

How do storage providers obtain FIL?

Accepted Answer

Storage providers have more than one source of income: clients pay FIL for storage services; if a provider is selected in an epoch and successfully produces a block, it may also receive newly minted FIL block rewards and message fees in that block. Retrieval providers charge retrieval fees for sending files to clients, and do not receive block-production rights merely by providing retrieval services. To obtain and maintain the storage role, providers must post FIL collateral for storage commitments and prove that they have stored and continue to store the committed data. Storage capacity broadly determines the probability of being selected to produce a block, but this is not a fixed rate of return; client deals, actual storage capacity, successful proof submission, and successful block production all affect the outcome.

Question 4

How does Filecoin verify storage commitments?

Accepted Answer

Filecoin first uses Proof of Replication (PoRep) to have a storage provider prove that it has stored a unique copy of data for the network, then uses Proof of Spacetime (PoSt) to prove that the data continues to exist. The proof concerns specific committed data or sectors, not merely a claim that the provider has disk space. Ongoing audits are mainly performed by WindowPoSt: a provider's committed sectors are divided into different time windows, and proofs must be submitted in the corresponding window; documentation states that every committed sector is audited at least once every 24 hours. Failure to submit a required proof for a sector is recorded as a fault and may incur a penalty from its collateral, giving storage commitments verifiable continuity.

Question 5

What is the relationship between Filecoin and IPFS?

Accepted Answer

IPFS is a protocol system for referencing and transferring data by content rather than location; the content identifier (CID) is a core concept in it. Filecoin is a network operating around verifiable storage commitments, deals, and blockchain settlement, and FIL is its monetary unit. The two can be used together: content addressing helps identify data, while Filecoin's proof and deal mechanisms address who commits to storing data, how that commitment is continuously verified, and how settlement occurs. Using IPFS does not automatically generate FIL, and IPFS cannot be directly described as FIL's token network.

Question 6

What is FIL's maximum supply?

Accepted Answer

The Filecoin specification sets FIL's maximum issuance cap at 2 billion tokens. The cap is the protocol-defined upper boundary of issuance; it is not the circulating supply at a given time, the quantity tradable on exchanges, or the balance available to any address. To understand supply, it is also necessary to distinguish genesis allocations, the minting and vesting of network rewards, locked balances, and burns. Even if tokens are included in the total issuance framework, they are not equivalent to FIL that can be freely transferred immediately if they remain subject to lockup or vesting rules.

Question 7

How is FIL allocated?

Accepted Answer

Among the allocations listed in the Filecoin specification, 70% is allocated to miner rewards. In the Filecoin context, “miners” primarily refers to providers that supply services and storage capacity to the network and may participate in block production; this percentage is not a promise of returns to an individual provider. The remaining portions belong to different uses and participants within the genesis-allocation framework. Allocation percentages describe intended destinations for supply in the protocol design; how much FIL an individual actually receives still depends on that person's role, storage capacity, deals, proof performance, and reward rules, and cannot be inferred solely from the 70%.

Question 8

Why is some FIL locked?

Accepted Answer

Some FIL is locked because the network releases part of block rewards gradually according to vesting rules rather than making all of them immediately available when a block is produced. Official built-in actor documentation explains that the RewardActor handles the associated locked vesting when awarding rewards to storage providers. The purpose of lockup is to connect reward receipt to a subsequent time dimension; therefore, a reward having been recorded, an account's total balance having increased, and tokens being freely transferable are different states. To determine the available balance, examine the specific address's on-chain lockup and vesting status, rather than treating nominal rewards or total issuance directly as circulating supply.

Question 9

What is the difference between FIL reward lockup and burning?

Accepted Answer

Supply changes in Filecoin involve at least three distinct processes: network rewards minted according to rules, token vesting or unlocking under genesis allocations, and FIL that is burned. They respectively affect the total issuance framework, when a particular holder can use tokens, and whether tokens permanently leave usable supply. The specification lists certain fees and penalties as burn mechanisms; this differs from reward lockup. Locked FIL still vests to a particular entity according to rules, but cannot yet be freely used; burned FIL is no longer controlled by that entity. The two should not both be broadly described as “reducing circulating supply” while ignoring their different causes and states.

Filecoin(IPFS) (FIL) Price