Filecoin, a decentralized storage network, is experiencing a significant increase in storage utilization, according to a report by Messari. The protocol currently averages 954.2 pebibytes (1.07 billion gigabytes) worth of storage deals, compared to its raw storage capacity of 12.2 exbibytes (14.1 billion gigabytes).
Until recently, Filecoin had struggled to gain traction due to high storage costs in comparison to centralized alternatives like Amazon Web Services. However, in the most recent quarter, the protocol generated revenue equivalent to $11.5 million, representing a decline of 40.7% compared to the same period last year. This decline can be attributed to the significant drop in the price of Filecoin tokens caused by the cryptocurrency bear market of 2022. Despite this decline, there has been a sharp increase in active storage deals, partially offsetting the revenue loss.
The drop in Filecoin’s token price has also affected supply-side revenue, which includes money earned from block rewards, anchored storage deals, and transaction tips. Supply-side revenue witnessed a substantial decline of 66.9% year-over-year, amounting to $85.7 million in the second quarter of 2023.
To drive adoption, many storage providers have been charging near-zero fee storage, incentivizing users to utilize the Filecoin network. The majority of stored data on Filecoin comes from the information technology sector (41%), followed by natural resources (31.3%), healthcare (16.7%), and social services (9.2%). Currently, a total of 1,750 clients have onboarded data onto Filecoin.
In an effort to cater to storage retrieval needs, Filecoin is developing a content delivery network (CDN) called Project Saturn. This CDN, built for Filecoin and IPFS (InterPlanetary File System), aims to provide fast and low-cost content delivery to Filecoin’s retrieval market.
In March, Filecoin released the Filecoin Virtual Machine (FVM), which brought Ethereum-style smart contracts to the network. Since then, over 2,300 smart contracts have been deployed on FVM, consuming 7% of the blockchain’s gas fees in the second quarter of 2023.
The growing adoption of Filecoin is an encouraging development for the decentralized storage industry. As the network continues to address storage costs and enhance its offerings, it is expected to attract more users and solidify its position in the market.