Desperation Among Filecoin Miners Creating a Big Market for FIL Borrowing
Miners for the decentralized storage project Filecoin are facing such a dire lack of liquidity to participate in the network they are willing to pay high interest rates of up to 40% average per year (APY) to investors holding large amounts of filecoin (FIL), the network’s native token. The lack of liquidity in filecoin required to mine on the proof-of-stake storage network is forcing desperate miners to borrow FIL rather than going into the open market to purchase tokens.
Filecoin miners have very specialized equipment and they require the FIL token for collateral as a trust mechanism in order to complete “deals” to provide storage for users. In return, miners are paid in filecoin but ironically, some of the biggest potential participants are getting a raw deal since they don’t own enough FIL to stake.