Building Web3: Filecoin + Ethereum Better Together

Summary of a talk given by Protocol Labs Founder Juan Benet at EthCC 2021 — see the full talk here.

The Filecoin network is ecosystem oriented, aligning with Protocol Labs’ tendency to build modular solutions. Designed to be used by others, Filecoin has found a natural fit with other stacks, applications, and ecosystems within Web3. Since its launch in October 2020, Filecoin has grown to over 8 exbibytes of available storage with 400+ new projects entering the space. One ecosystem that continues to prove collaborative and mutually beneficial is Ethereum.

Filecoin + Ethereum

Filecoin & the EVM

The Filecoin ecosystem is aware of the benefits of having smart contracting capabilities on the network. Initially, the developer community believed bridges between Ethereum and Filecoin would suffice to enable smart contracts on Filecoin. However, using smart contracts over bridges is clunky, and pales in comparison to the functionality and composability of smart contracts directly in Filecoin. The proposal now is to add the EVM into Filecoin, enabling smart contracts on the storage layer and greater opportunities to combine the two ecosystems.

Developer Tooling & Resources

Fleek allows users to host websites, store and deliver files, and develop dapps for the decentralized web. Fleek speeds the adoption of the decentralized web by making it easier for everyone from dedicated developers to everyday internet users to create apps and store files in a decentralized manner. Fleek enables automatic archiving on Filecoin, and leverages the Ethereum ecosystem through applications like ENS.

Web3.Storage is a simple interface for developers to store and retrieve data from Filecoin’s decentralized storage network. Web3.Storage gives developers — including Ethereum dapp developers — an easy avenue to build applications with redundant, decentralized storage and secure, content addressed data.

PowerLoom aggregates on-chain and off-chain data to generate snapshots with cryptographic proofs in a decentralized manner. It aims to build trust and offer meaningful insights on demand through a rich ecosystem of peers and stakeholders that are incentivized to participate in the protocol. PowerLoom is particularly applicable to ecosystems like Ethereum DeFi, which is complex and requires trust based on verification.

DeFi Applications

Secured Finance is a platform for the conclusion of smart contract-based peer-to-peer fixed-rate loans, collateral management services, cross-currency swaps, and other types of interest-rate products. Secured Finance’s protocol is the decentralized P2P financial protocol that provides the functionality of middle and back-office banking operations on top of blockchain by leveraging Ethereum smart contracts. Secured Finance has been able to address needs within the Filecoin network by providing a solution for Filecoin miners’ strong demand for FIL loans.

Data Marketplaces

Ocean Protocol is a data marketplace on top of Filecoin. Ocean’s data tokens are Ethereum ERC-20 tokens that make it easy to publish and consume data services. If you have 1.0 datatoken, you can access a particular data service. Ocean market — a DEX specialized for data — uses a forked Balancer AMM to reduce gas costs. In the marketplace, users can publish, buy, sell, consume, and stake on data.

With Filecoin, users can leverage Ocean to launch their own Filecoin data market, or create a Filecoin dataDAO or index fund. With Ocean Protocol’s tools and Filecoin’s decentralized storage database, the birth of an open data economy is happening.

Video Applications

LivePeer is a decentralized live-video streaming infrastructure, secured by the Ethereum blockchain. When combined with Filecoin and IPFS for storage and content delivery, decentralized video applications now become possible.

Voodfy is building decentralized tools for private video hosting. It’s an all-in-one secure streaming solution that gives users complete control of their content – including who can access it and how it’s monetized. It leverages Livepeer, Ethereum, Textile Powergate, and Filecoin.

VideoCoin is building a solution to reliably create, store, and trade video-based NFTs that circumvents the inherent complexity and expense of storing actual data on Ethereum. VideoCoin is integrating its decentralized video processing network with Filecoin to build the first platform specifically designed for creating and trading Video NFTs, a highly compelling segment of the emerging global marketplace for digital collectibles.

NFTs is a service backed by Protocol Labs and Pinata specifically for storing NFT data. NFT.Storage allows developers to protect their NFT assets and associated metadata through content addressing and decentralized storage – ensuring that all NFTs follow best practices to stay accessible long-term.

Use Cases for the Future

As the Filecoin and Ethereum ecosystems grow and overlap more, emerging use cases and opportunities for developers will continue to emerge. Some of the use cases ripe for innovation are:

Composable DeFIL

Bringing the worlds of storage and DeFi together yield opportunities. One could take market orders like asks, bids, and deals, and leverage a DEX to see how the market really values those orders. With this sort of ability, the ecosystem can begin imagining hardware futures, spacetime futures, and more.

Data-rich NFTs

NFTs will continue to grow more and more complex, and the Web3 community needs a way to adopt data-rich NFTs. VideoCoin has already connected their video processing engine with Filecoin to leverage both the NFT-readiness of Ethereum with the storage strength of Filecoin. Tooling like VideoCoin’s can be used to create a new class of NFTs like short movies, video clips, and full-length features.

In action, data-rich NFTs enable Vine-like short video clips. A user on this theoretical platform would mint an NFT on Ethereum, store the video and the metadata on, and store the dapp data (like comments, likes, engagements) on IPFS and Filecoin.

Pay-per View Media

With information stored on Filecoin, the token-access capabilities of Ethereum can be leveraged to create token-protected pages and media (articles, movies, music, and more). The ‘pay per view’ models of Web2 can be replicated, without needing to replicate the data and advertising models.

And that’s just the beginning! The Filecoin and Ethereum ecosystems have a long history of collaboration and opportunity, with much more to come. Watch the entirety of Juan Benet’s talk here.

Filecoin is an open-source cloud storage marketplace, protocol, and cryptocurrency.