Introduction to Collectif DAO: A Non-Custodial Liquid Staking Protocol on Filecoin
Introduction
Collectif DAO is a non-custodial liquid staking protocol on Filecoin.
What does it mean?
For example, suppose you want to become a Storage Provider on the Filecoin network, accept storage deals, and earn rewards. You have all the necessary hardware or sufficient capital to buy or rent it. However, you don’t have enough FIL for the initial pledge collateral, which the network requires to onboard new storage capacity. The good news is that liquid staking pools allow you to borrow FIL from them.
Alternatively, if you are a FIL holder and want to put it up as collateral on behalf of a Storage Provider to earn a portion of its rewards, you can deposit it in the pool. In exchange, you will receive interest-bearing tokens which you can swap back to FIL anytime. Additionally, you’ll be able to use these tokens in the future Filecoin DeFi ecosystem.
Importance for Filecoin Network
Liquid staking is important for the Filecoin network because it can help improve the security and stability of the network. Currently, the pledge requirements are a major limitation to the growth of Filecoin’s storage capacity. By making it easier for Storage Providers to meet these requirements, the network could experience faster growth in network power.
Additionally, the centralization of certain regions, which leads to a disproportionate distribution of storage capacity on the network, poses a risk to the censorship resistance of the Filecoin network. Liquid staking can help democratize Filecoin mining and provide incentives for Storage Providers in underrepresented regions to increase their network capacity. By ensuring balanced growth in storage capacity, the Filecoin network can remain as resilient as possible.
Once the governance behind the Collective DAO is fully decentralized, it is expected to help the Filecoin network remain as decentralized as possible, aligning with its overall mission. In the future, the DAO could make decisions on sector allocations and deals for Storage Providers, which could help incentivize correct behavior and support the growth of the network.
Why Collectif DAO?
The team behind Collectif DAO has been a part of the Filecoin ecosystem since its mainnet launch in 2020 and has an extensive experience in financial engineering across a variety of products like lending, derivatives, and interoperability. The team has been a part of the early builders program on FVM.
While designing Collectif DAO liquid staking protocol we found ourselves presented frequently with difficult design decisions. Achieving the maximum economic efficiency for our users led us to explore lower-level network rules on the initial pledge requirements. By further embedding the native sealing rules we’ve achieved an on-demand delivery of the capital, without increasing overall financial pressure for Storage Providers.
What we’ve built so far
We have created a user interface for staking and unstaking, which you can test on the Hyperspace testnet. To use it, you will need to enable Hyperspace network in your Metamask (you can do it here) and obtain some tFIL tokens from the faucet here.
We have also created a CLI for Storage Providers that enables them to register in the protocol and start leasing FIL from our liquid staking pool to add new sectors to the network. This CLI allows them to use the same wallet that is used by a Storage Provider in Lotus. If you are a Storage Provider on Filecoin and want to try it out, follow the instructions at the end of this post.
What happens next?
We have several tasks on the horizon, including testing the hyperspace and calibration networks with storage providers and the Filecoin community, conducting security audits, and launching on the mainnet. These steps will help to ensure the success and security of the project as it moves forward and will help to establish Collectif DAO as a reliable and valuable part of the Filecoin ecosystem.
We invite you to try our app on Hyperspace testnet at https://app.collectif.finance/
We’d love to hear your feedback in our on Twitter, join the early community in Discord
If you are Storage Provider and want to help us build Collectif DAO, you can email sp@collectif.finance or fill out the form on our landing page https://collectif.finance/
