Is the Filecoin mining machine overwhelming, or is the mortgage mechanism unreasonable?
Original title: “FIL loan interest rate hits 100%, who created this business? 》
Written by: Huang Xuejiao
When the currency market was booming, the players who entered Filecoin mining were worried. The problem is not that the price of the currency has not risen, but that “the computing power has not run, and the shadow of the currency has not been seen.”
Earlier, there was a widespread rumors in the industry that “miners were on strike and the computing power of Filecoin was almost stagnant after the launch of Filecoin.”
The prerequisite for mining Filecoin is that 0.2 FIL must be pledged before each sector is encapsulated, and it will not be unlocked until the sector’s working period expires (that is, at least half a year later). After the block is successfully mined, the block reward needs to be post pledged. As a result, miners face the problem of insufficient pledged coins and “smart women can’t cook without rice.”
Insufficient pledged coins does not mean that FIL’s circulation is insufficient. Otherwise, we would have seen FIL’s “one stone through the cloud”. The lack of pledged coins is more a problem of “resource allocation”, early investors, secondary market investment Coin holders such as those who “hold it but don’t use it”, miners who need to pledge tokens and endorse their own credit cannot afford to buy coins and hold coins. Therefore, the Filecoin currency loan market emerged.
At Shanghai Wanxiang Zhou conferences, large and small, there are constantly miners/miners who come from afar to “assiduously seek coins”, demanding tens of thousands of dollars at every turn, and it lasts for several months.
Moments is also a channel
Under the huge gap, on Binance, FIL’s deposit interest rate has risen from 12% when it was first launched to 156%, a full 13 times increase. CoinList, which once personally raised Filecoin, also issued solicitation orders to coin holders.
So, how much FIL pledge currency is lacking, can it be bridged by “market allocation”? Is the essence of the mining machine overpowering, or is the Filecoin mortgage mechanism unreasonable? Odaily Planet Daily interviewed several practitioners to discuss these issues with everyone.
It is difficult for miners to find one currency, the exchange issued a loan collection order, and the financial interest rate can reach 156%
On various occasions of Shanghai Blockchain Week, as long as you pay attention to it, you can see Filecoin players. When you listen closely, you often don’t leave the theme of “Pledged Coins in Urgent”.
On October 30th, Liu Bo (pseudonym), who had stayed in Shanghai for several days, had to go back. As the person in charge of a Filecoin mining manufacturer in Shenzhen, Liu Bo’s mission to go north this time is to borrow coins.
In the past few days, he rushed to meetings with various themes and met with big names, institutions and exchanges he knew, but he still couldn’t fill the gap.
Although slightly frustrated, Liu Bo deeply realized that this is the crux of the entire industry. Players on the field are always worried, and it is useless to worry.
Many people did not expect that Filecoin was finally launched after 3 years of preparations. I thought it was “a huge stone finally landed”, but another huge stone followed.
In order to form effective constraints on the miners responsible for data storage, the Filecoin official (protocol laboratory) has formulated a strict economic mechanism, which includes pre-mortgage and block reward mortgage (also called post-mortgage).
Block reward mortgage means that only 25% of the block rewards obtained by miners can be unlocked at that time, and the remaining 75% will be unlocked linearly within 180 days. Pre-mortgage means that the miner needs to deposit 0.2FIL/32GB sectors before encapsulating the sectors, and they must not be unlocked during the sector’s working cycle.
what is this concept? We might as well settle an account.
According Filfox flying fox browser data, as of November 9 Day 7: 00, Filecoin whole network operators force reached 822.8PiB, on-line since October 15 date, the whole network operators force at an average rate 9.6PiB / day of growth, thus It can be calculated that the pre-collateralized coins required per day are 65,000.
Many people in the circle of friends are forced to become mathematicians
Let’s look at supply again. The current tokens that can be used for pre-mortgage are mainly composed of two parts: block rewards generated by the existing computing power on the main network, and reward tokens generated by the incentive test network “space race”.
Let’s first look at the block rewards. According to the data of the Filfox browser, the output of the entire network in the past 24 hours was 166,480, of which 25% (41,62) can be unlocked the next day. There are approximately 4.1 million reward coins distributed to miners by the incentive test network, and 22,700 coins can be unlocked per day according to the 180-antenna release. The sum of the two can reach 64,000, which seems to cover the expenditure of mortgage coins.
But there are two very important points. First of all, are the 41,62 million miners willing to use them for collateral for a long time? According to Odaily Planet Daily, most miners have promised when selling their mining machines/computing power that they will assume pre-staking expenses for users. The second point is that 4.1 million reward coins are distributed to the top 100 miners, and the greater the computing power, the more they will be distributed. Then for some reason, it must be that the test network is not incentivized to perform at the true level and obtain the same computing power scale. Miners with matching reward coins, how should these miners fill the gap in pledge coins?
In this context, buying FIL or borrowing FIL has become the two paths before miners/miners.
The amount of funds used to buy FIL is undoubtedly huge, and long-term pledges also face a huge downside risk of currency prices. It may be “grainless” on the basis of the legal currency standard. Therefore, borrowing currency is also one of the “lower strategies”. The best policy.
After the requirements were clarified, a group of FIL lending solution providers quickly gathered from on-site to off-site. The market is dominated by centralized exchanges, and off-market lending has their magical powers.
According to Odaily Planet Daily, almost all exchanges with currency deposits are targeted by miners.
FIL rich list sent by a miner
First look at the three major exchanges. At present, OKEx’s withdrawal is stagnant, and the amount of coins on Huobi and Binance are both at the million level, but most of them are users’ tokens. Of course, once there is demand in the market, these exchanges can quickly raise coins from users.
Regarding the FIL lending business, the staff of the relevant business lines of Huobi said that at present, customers can borrow through warehouse-by-warehouse leverage and warehouse-wide leverage (part of it can be withdrawn after lending), and those with larger volumes can directly connect with sales colleagues.
Odaily Planet Daily tried to use leveraged lending on Huobi. Huobi’s advantage is that the interest rate is lower, with an annualized rate of only 35.77%, but there are also times when the inventory is in a hurry.
Huobi Margin Product Page
Binance has a high annualized interest rate of up to 73%. According to previous knowledge, the pledge rate needs to be lower than 66% (Pledge rate = loan value / mortgage value). If the user’s level on the platform is low, there is a loan limit (If the level is 0, the maximum can only borrow 200FIL).
Binance Margin Page
Interestingly, if you have FIL, you can also lend it on Binance.
The “Binance treasure” product page shows that since the launch of FIL (October 15), Binance has to launch 3 FIL fixed-term wealth management products. The 14th fixed-term wealth management and 10th period starting from October 19 and October 22 Regular financial management on the 7th starting on the 27th. With the FIL shortage problem unsolvable, market demand continued to increase. The interest rates of these three FIL financial products also soared, from the initial 12% to 88% and then to October 156% on the 27th, a full 13-fold increase.
Regular Binance Product Page
Attracted by high interest rates, the amount of Binance wealth management products raised from less than 3,000 FILs to 35,000 in the later period, and so far has raised more than 73,000 FILs.
Gate.io is a C2C transaction. The number of borrower’s pending orders and the annualized interest rate vary, but the annualized interest rate for large-scale pending orders is usually higher, the lowest is around 50%, and the highest can reach 109%-365%. On the whole, Gate.io currently has a small amount of lending available, less than 15,000 FIL.
Gate.io loan page
Under high interest rates, Odaily Planet Daily learned that a second-tier exchange even regards FIL lending as a key business for expansion. According to the person in charge of the business, the FIL loan interest rate on the platform can reach 100%, even if it is in short supply.
In addition to the active response of major exchanges, the “semi-official” platform CoinList, which was invested by Protocol Labs, also urgently responded.
On October 20th, an email of “FIL Loan Plan” sent by CoinList to users circulated in the community. According to the email, CoinList launched a FIL loan program with a minimum loan amount of 250FIL and a loan period of 3 months; after the loan expires, participating users will receive the principal and 40% of the annualized interest (tokens).
Regarding FIL lending, CoinList’s advantage is that it helped Filecoin to conduct public offerings in 2017, and it has accumulated many investors. It is also a compliant platform. The amount of coins that can be raised is also considerable; for miners, it’s borrowing. Interest rates are low and equally attractive.
In addition, Juan saw this problem at the beginning of the mainnet launch and said, “The team has cooperated with TBA to provide small loans to miners. This will not be used for profit, and it is a small amount, which will not help miners get all the money. Undertaking the demand for pledges (oversold machines), only miners are allowed to borrow for pledges, and there will be a daily limit for borrowing .” However, the specific interest and amount of borrowing have not yet been disclosed.
In order to solve the problem of currency shortage, 95% of the Hash Power Alliance had negotiated with Juan
There is no money to worry about, and after borrowing money, miners cannot relax for a moment. Borrowing not only greatly occupies the cash flow of miners, but also has risks at all times.
The loan products mentioned above all have an indicator called “pledge rate”, which represents the ratio of loan value/collateral value. For example, the pledge rate for borrowing FIL on Gate.io is no more than 70%, that is, you can lend up to 70 USDT equivalent of FIL if you pledge 100 USDT.
After that, if the FIL price rises, that is, the value of the FIL you lent out rises. If the FIL price rises by 25%, the lender’s loan value rises to 105 USDT, which exceeds the mortgage value, which means that the borrower and the platform cannot To recover the principal and interest, in order to avoid such losses, the borrower often sets a pledge rate upper limit (usually 85%). When the proportion of loan value rises to this ratio, if the lender does not increase the mortgage in time, The borrower confiscates the collateral and empties the debt. This means that at this time, if the miner/miner fails to replenish the position in time, it will default to buying the borrowed FIL at this higher price (the price when the pledge rate reaches 85%), and thus Take the risk of FIL falling by yourself.
If this happens, it will undoubtedly be a serious blow to the miners.
According to a miner, the major miners he knows currently have a monthly net expenditure of 2 million yuan. Some miners have calculated that they have even lost tens of millions of dollars. The problem is that the money collected from the sale of mining machines is not enough for the expenditures of “mining machine costs, operation and maintenance costs, and mortgage token costs.” The businessmen are “under great pressure.”
On November 3, Starland, one of Filecoin’s major miners, issued a product suspension announcement. He said, “There is redundancy in market products. To further enhance the value of the project and achieve long-term development, it is necessary to slow down and expand the application. For investors, they have missed the initial bonus and continue to invest, not only without additional test rewards nor The accumulated computing power is too risky. In order to better cope with the challenges of market changes and project development, Starland has temporarily stopped selling all products from October 30, 2020.”
Indeed, without collateralized coins, how to increase computing power and receive new customers?
“This situation may last for half a year,” said Will, the founder of Interstellar Vision.
After half a year, it is indeed a major node. At that time, the incentive testnet tokens, mining reward tokens, most of the pledged tokens of the entire network, and some early investor tokens will be unlocked (completed) at this time. It greatly complements the endogenous closed loop of the tokens required by miners.
So, who is to blame for the fact that most of the current miners/miners are in a half-powered state?
In this regard, the official and the miners can be said to “stick to the same word.”
Let’s start with the current suffering miners/miners. Many Filecoin miners support the mortgage mechanism. However, many people also said that the official hesitation in determining the mortgage parameters did not give the miners a clear answer and sufficient Preparation time.
In July of this year, before the start of the incentive testnet, Odaily Planet Daily interviewed the person in charge of a major miner. He said, “He is not worried about collateralized tokens, because in the early days everyone did not have coins, so early blocks do not need to be collateralized; and , The tokens distributed by the incentive testnet can also be used for pre-collateralization.”
But when the mainnet went live in October, the boots were settled. We saw that the final mortgage mechanism was not satisfactory. But this was indeed the information received by many miners at that time.
After the incentive testnet went live (August 25), the lingering mortgage parameters also gave miners more or less “lucky psychology”. Zeng remembered that at the beginning of the incentive test network in early September, the pre-staking rate of the network reached 0.6 FIL/Sector, and the staking period was not the current 180+ days, but 20 days.
At this time, some major miners estimated, “If you add 10PB of computing power per day, you will need 310,000 FIL mortgages a day, and if the FIL unit price is 20 US dollars, it will be more than 6 million US dollars. If it lasts for 20 days, Miners across the network have to pledge more than one billion U.S. dollars in coins, and miners won’t have so much money.
The miner then affirmed, “So I think the economic model will definitely be revised. Looking at the latest documents, the official plan to allow post-mortgage block rewards to be added to pre-mortgage. This is a positive sign.”
Unexpectedly, the pre-pledge rate has dropped, but the pledge cycle has been extended.
Such “temporary decisions” brought great uncertainty and caught the miners by surprise. Only then will the major miner Shikongyun publicly “accuse” the protocol laboratory after the mainnet launch.
Miners are not simply asking for the cancellation or reduction of pre-staking for short-term benefits. What they need is an open and friendly game rule.
The official does not seem to see this layer. Hu An, the founder of Protocol Lab, once referred to miners that were not turned on by miners due to a shortage of tokens as “oversold machines.” It can be seen that the official does not intend to be responsible for what he considers to be the “business conduct of miners.”
After the mainnet went live, miners, large and small, and dissidents in the community (typically such as the forked project Filecash) continued to denounce. Some miners told Odaily Planet Daily that these big miners had organized a 95% computing power alliance to negotiate with Juan. But the result is still in vain.
“Discussing technical issues is very welcome, but when it comes to economic mechanisms, he will never give in.” The miner shook his head helplessly.
Ecological team, to tide over the difficulties together
Different miners face different token shortages due to their different market strategies and strategies for participating in the incentive test network.
According to the analysis of a miner, whether the miner is short of coins depends on several aspects:
The first is whether it participates in the space race, leads test coins, gains computing power, and competes for rankings. This will ultimately affect the test coins and reward coins it obtains. If the miner does not participate in the space race, it will be better on the starting line. The participating vendors struggled a lot. There is also a situation in which some manufacturers are actively participating, but they do not know in advance that the test currency will become a real currency. Therefore, they are first to debug the equipment and fully trial and error. As a result, they are fined and confiscated a lot of computing power and tokens. It’s a pity.
The second point depends on whether each family has sufficient awe and preparation for the pre-staking. Although the pre-staking parameters have not been finalized when the incentive test network is carried out, the official Filecoin’s strict style of the economic mechanism has made miners aware of the five or six points. Generally speaking, miners will calculate the required pledge currency scale based on the amount of computing power they have sold, and try to raise tokens through off-exchange, investor and exchange cooperation as much as possible. If you have the mentality of a significant reduction in the pre-staking and you are not fully prepared, you will be passive after the mainnet goes online.
Another point is to look at the market strategy of miners. If there are more retail customers, and users cannot increase their computing power and withdraw coins normally after going online, they will be more emotional, which will undoubtedly cause great pressure on miners; on the contrary, if they are targeted at institutional customers and large customers, they may be I am more able to face the prolonged payback period and the rhythm of “take it slowly.” In addition, if this miner adopts a multi-level distribution mechanism when selling, its profit may be relatively low. At this time, it will have to bear the pledge currency, and its cash flow cannot be said to be worse.
Even if the storm is rough, but for the miners and more participants who are already on board, only by facing the difficulties and supporting each other can we tide over the difficulties together.
At this point where he can’t breathe, Will can clearly feel that the ecological participants are undergoing subtle changes.
“Before the mainnet went live, each manufacturer was almost in a separate state. Sometimes in the industry, there were sometimes discrediting competitions. But when the mainnet went live, everyone was in the same boat and the burden was relatively heavy. For the situation of other friends It is more empathetic. I hope everyone can solve the problem and get through the difficulties.”
In addition to borrowing, we have also seen some miners launch other “self-help” plans.
For example, Diancun Technology issued an announcement on the eve of the mainnet launch stating that customers need to solve the pledged currency issue by themselves.
“Customers who deposit points can use SR1 reward coins as pledges. However, due to the limitation of the number of pledge coins, we cannot advance all pledge coins for customers. Customers need to settle part of the pledge coins by borrowing or purchasing.
As the first manufacturer to openly let users withdraw money, Diancun said that the company also considers that the market and customers may be dissatisfied, but this is indeed a method of doing what it can according to the platform and keeping customers transparent.
In addition, 1475 and other manufacturers cooperate with investors. One party produces FIL and the other produces resources such as mining machines. The mining income first guarantees the priority of FIL investors and then divides it according to the contribution of 28%. Among them, 20% of investors Deducted from the 1475 technical service fee. Aiden believes that for investors who are optimistic about Filecoin for a long time, “in general, the annualized input-output ratio is still acceptable.”
There are also pomegranate mining pools, through the establishment of a new ecology (Filestar Wenquxing), the implementation of the “one machine double mining” mechanism, digesting the mining machines that cannot be started on Filecoin immediately, and increasing the income of miners.
The next six months will be difficult, and the miners will be squeezed into predicament, each relying on haste to find a living space. The status quo that officials and miners, borrowers, and lenders are not equal is not only the result of imperfect reconciliation of technology and commerce, but also part of the responsibility for the delayed setting of the Filecoin mechanism. What will happen when the lending rate exceeds the market equilibrium level? Odaily Planet Daily will keep an eye on it and follow-up reports.
Reference materials:
“Filecoin miner, trapped in pledge”, Beep News;
“Filecoin miners need to solve the pledge currency problem by themselves? It’s not what you think”, click save technology.
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