James Lovett is a talented crypto enthusiast who finds pleasure in sharing more knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. He likes to keep himself furnished and updated with the latest innovation in the crypto industry, blockchain technology, Internet of Things (IoT) and other technologies. As a result, he tries to furnish ardent crypto supporters with the latest news on blockchain and distributed-ledger technologies. Indeed, Blockchain and Cryptocurrency is changing the world as we know “one block at a time”. As a hobby, he also trades in small amounts of cryptos every now and then. An author with experience writing for tech, digital, and cryptocurrency blogs!
The latest Lotus 1.1.0 network software upgrade enables Filecoin miners to access 25% of mining rewards immediately with no vesting.
As reported by The Block, Filecoin‘s network lead Molly posted on Wednesday a downloadable Lotus 1.1.0 software upgrade in the project’s Slack channel. Participants who want to continue operating in the decentralized storage network would have to comply since this is a mandatory upgrade.
She posted the following in the channel:
“You must upgrade before epoch 170,000 (Thursday Oct 22 at ~22:40 UTC), or you will lose sync with the chain”.
On Thursday evening EST, the network reportedly reached the block height of 170,000.
FIP-004 Upgrade Enables Miners to Receive 25% Immediately
At block height 170,000, Filecoin activated the FIP-004 change, which it emphasizes its miners to update. As per the post, 25% of block rewards received immediately without vesting will help miners to improve their ability in reinvesting in FIL (the network’s native cryptocurrency).
Over the last 24 hours, Filecoin miners produced around 150K FIL. If that rate is applicable under the new system, miners will receive daily block rewards amounting to over 40,000 FIL. While that is good, the challenge that the company would face is how much out of the immediately released FIL are miners willing not to sale on the markets but re-pledge so that they can enhance their computing power.
Upgrade Solves Miner Liquidity Issue
Earlier this week, a couple of major Filecoin miners halted their mining growth plans from the time the network’s mainnet officially went live. The miners wanted Filecoin’s economic model revised since the amount needed to begin mining was hefty. So, they collectively hesitated to add more of the coins to the decentralized storage network to overall slow down the network’s growth rate.
For sealing 32 gibibytes (GiB) of data into effective storage mining power, miners require to pledge 0.1901 FIL as collateral under Filecoin’s current design as per Filecoin’s blockchain explorer.
Before the implementation of FIP-004, block rewards were not released to miners immediately but vested linearly over a period of 180 days. Now, the rewarding process is more motivating as miners are entitled to receive 25% immediately and wait for the rest 75% that will still be vested in a period of six months.
Miners Are Now Motivated to Pledge
The revision is a response to the organization behind Filecoin Protocol Labs put forward to address miners’ liquidity issues complaints raised against the current economic model. As a result of the software revision, circulation will be adequate and price more steady since miners are now more motivated to pledge their FIL for mining future rewards making the process to reach equilibrium faster. With over 13 million FIL that miners have so far pledged as initial collateral, there are currently around 19.3 million FIL in circulation as per data from CoinGecko.
Filecoin is a peer-to-peer network built on the InterPlanetary File System (IPFS) distributed file system that enables users to use Filecoin tokens (FIL) to store and share data. Protocol Labs, an open-source research and development firm, developed both of these projects.