From Storage to DeFi: Filecoin Unleashes the Power of Smart Contracts

Blockchain-based data storage platform, Filecoin, announced this week that it has enabled Ethereum-style smart contracts, making it a direct competitor to traditional cloud computing and data storage platforms such as Amazon Web Services.

This upgrade, known as the Filecoin Virtual Machine (FVM), is compatible with Ethereum Virtual Machine (EVM). This allows for the large pool of developers building on Ethereum to deploy decentralized applications on the FVM without significant code modifications. Many popular Ethereum applications, Ankr, Axelar, Brave, Celer, Ocean, Sushi, Tellor are in the process of being deployed on Filecoin.

The Axelar-Filecoin integration is one of the first use-cases of interoperability that enables composition of chains with different properties. For instance, DeFi across blockchains will be composable with decentralized storage, regardless of where they choose to build.

Sergey Gorbunov, co-founder of Axelar

Filecoin was designed to match anyone with excess storage space, from data centers to individuals with spare hard drive gigabytes, with those who require cloud storage. These storage providers function like miners on the Bitcoin network, reaching a consensus on information stored on the network and receiving compensation in the form of FIL tokens.

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Filecoin’s integration of smart contracts will also allow for the development of DeFi applications. Previously, storage providers needed to post collateral, which they did not always have access to, forcing them to turn to centralized third-party lenders. However, now they can lend and borrow trustlessly on-chain, increasing the revenue generated by the platform. In short, Filecoin’s integration of smart contracts creates a more economically sustainable network that enables users to stake their FIL tokens and generate yield by lending them to storage providers.

With the integration of smart contracts, Filecoin will be in a position to disrupt traditional cloud computing and data storage platforms, paving the way for a new generation of decentralized applications and storage solutions.