Gemini Expands Support For Wrapped Filecoin With Chainlink Proof of Reserves
Wrapped Filecoin’s path to a DeFi-grade commodity gets closer with Gemini offering Chainlink’s Proof of Reserve support for EFIL.
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key takeaways
- Filecoin is a decentralized data storage marketplace, which wants to provide a censorship-resistant data storage alternative to existing cloud services
- Wrapped Filecoin is a way to represent Filecoin’s $FIL token on the Ethereum blockchain, allowing it to be included in Ethereum DeFi.
Last year, Gemini launched wrapped Filecoin, allowing traders to commoditize the utility of the decentralized blockchain-based alternative to cloud storage on the Ethereum blockchain. Imagine getting exposure to storage as a commodity and being able to insert it into smart contracts, or otherwise utilize it within DeFi platforms, and you have wrapped Filecoin (traded as $EFIL). Filecoin lives on its own blockchain, and this is a way to bridge the gap and allow it to be used on Ethereum.
Now, Gemini has taken the next step into transforming $EFIL into a DeFi-grade commodity by integrating it within Chainlink’s Proof of Reserve (PoR). Via Chainlink, an oracle, DeFi platforms will be able to audit the reserves of the Filecoin tokens Gemini has wrapped and held in custody. The PoR data feed uses a Chainlink-powered oracle network to check the balances of Gemini’s custody wallet for FIL and push out an on-chain update if there’s a deviation in Gemini-held FIL balances that goes beyond a certain threshold.
Chainlink Proof of Reserve provides smart contracts proof regarding the amount of $EFIL in Gemini’s custody; Source: blog.chain.link
“Tokenization enables cross-chain representation. It allows for the value inherent in this segmented utility to be represented in various markets where trading occurs, including DeFi. Interoperability will be of growing importance and will be satisfied by solutions like wrapped assets,” Matthew Werner, a Gemini Product Manager, told Blockworks. “As we see more of these types of base chains that provide native utility, there will be a broader spread of segregated assets.”
Gemini says that the intended goal is for $EFIL being a more reliable form of collateral and payment throughout DeFi and other smart contract verticals on Ethereum needing storage solutions.
Aside from DeFi traders, investor interest in Filecoin as an asset continues to grow. In March, Grayscale announced the launch of a Filecoin closed-end fund. Currently, the fund has approximately $580 in assets under management, and is up nearly 30% since its inception.
According to publicly available stats, Filecoin has stored 27.9 Petabytes (1 million Gigabytes) of data. Some of this data would be NFTs, but as most NFTs are image files that are a few megabytes at most, it is not clear what else is in Filecoin miners’ virtual coffers. What is clear is that many of the miners are based in China, which would call into question how ‘censorship resistant’ the storage network really is.
Filecoin’s native token $FIL was trading at $72.35, at the time of publication, up 3% in the past 24 hours according to CoinGecko.
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