Decentralized file-sharing projectÂ FilecoinÂ launched last week after years of development and a jawdropping $200 million ICO. But critics and miners are calling it a failed launch.
Its fees are turning out a pain pointâ€”data shows miner prices to use Filecoin network cost over $40,000 (with hosting and maintenance), in contrast to centralized alternatives like Amazon Web Services which charge a fraction of the amount.
Miners using Filecoinâ€™s â€œspace raceâ€ testnet, essentially a bounty-like offering for miners to provide hashpower to the network (using their own expensive hardware) for testing also turned out a disappointing affair at launch, as some pointed out:
For the uninitiated, Filecoin was announced and founded by Protocol Labs in 2017 as a file-sharing and content distribution service. The product allows any individual to rent out unused storage on their computers or hard drives, creating a (theoretically) cheaper and faster means of storing data.
Its FIL token launched last week (under a vested schedule) and zoomed to aÂ valuation of over $900 million within hours, making it the fastest such project to do so. FIL saw an initial pump, but traders soon took to shorting the token en masse, driving prices down as much as 40% on the first day of trading.
Price falls were not all for FIL holders. Despite the projectâ€™s fully working product, the anonymous Twitter profile â€œNico Devaâ€ pointed out Filecoin miners were no longer participating in the network due to high upfront costsÂ andÂ the requirement for them to purchase even more tokens.
They further raised the issue of some of Filecoinâ€™s supposedly vested tokens finding their way to crypto exchangesâ€”a sentiment which Tron founder Justin Sun shared:
â€œBreaking the vesting rules has serious legal and compliance consequences. Do you really think dumping like this is ok?,â€ said Sun, even as Tronâ€™s own token ecosystem has attracted widespread criticism from crypto industry observers.
Meanwhile, Mechanism Capital partner Andrew Kang stated the Filecoin team either needed better token advisors for its distribution plan or was a â€œPonzi at 1000x scale.â€Â