Storage is Just the Start: Three Focus Areas for the Filecoin Network in 2024

Data storage and retrieval are core to how the Internet works. Today’s data infrastructure is dominated by Big Tech. But technologies like the InterPlanetary File System (IPFS) and Filecoin re-architecture that centralized framework to store humanity’s information on a decentralized network of storage providers.

Filecoin is the largest decentralized storage network in the world. Since the mainnet launch in 2020, the network has grown to nearly 3,000 storage providers (SPs), collectively storing 1.5 exbibytes of data. This information ranges from experimental physics data from the most prestigious research institutions in the world to historical and cultural archives of entire island nations. As the amount of data we generate grows exponentially and the internet of tools building on it needs to scale accordingly, decentralized storage is emerging as the foundational layer of a new distributed web.

The Filecoin network’s design, with a wealth of high-value hardware resources at the ready and a core protocol augmented by new scaling primitives, is poised to revolutionize the way we approach data on the internet –– unlocking decentralized data storage and processing.

Mid-way through 2024 and looking ahead to 2025, three major focus areas emerge for the Filecoin network to unlock the true potential of humanity’s data.

1. Filecoin L2s: Powering Compute Over Data, DePIN, and AI

In the Filecoin universe, storage units aren’t stand-alone boxes: they are composable building blocks for other use cases and business models. Many customizable data on-ramps are built on that foundation to optimize Filecoin’s offering for different use cases.

The Filecoin Virtual Machine (FVM), which enables smart contracts and programmable storage on the network, enhances Filecoin's utility for both DePIN and AI applications, allowing for more sophisticated data handling and processing directly on the storage layer. Complementing FVM, the hyper-tunable InterPlanetary Consensus (IPC) framework facilitates highly scalable subnets. These innovations together empower specialized Layer 2 solutions with customized consensus mechanisms, supporting the launch of new DePIN networks building on Filecoin’s security and infrastructure in 2024, like Fluence's compute L2 and Basin's data L2.

This infrastructure is fit for emerging AI use cases. The network's ability to provide seamless data access across different platforms and handle large datasets required for AI training and inference makes it an ideal host for decentralized AI model storage and distribution. L2 solutions like Akave are building specifically for AI data with innovative on-chain data lakes. And Filecoin storage providers have the technological resources to get in on AI advancement, with Bagel’s decentralized compute network aggregator that enables AI developers to train and store their models using the compute and storage power of the Filecoin network.

A Layer 1 that provides real utility to Layer 2s can augment the entire Web3 stack –– from storage onboarding platforms to compute marketplaces to AI model infra.

2. The Hot, Fast Storage Layer for Web3

What if a storage unit could keep your belongings safe, but you didn’t have to drive to a warehouse, unlock a padlock, and haul them away in a truck anytime you wanted to use them?

As a complement to the many cooler storage opportunities on the network, Filecoin is now unlocking hot, fast storage offerings –– and the Web3 ecosystem is ready to take advantage. Storage aggregator L2s are facilitating rapid access to Web3 chain state and smart contracts. New hot storage primitives like the upcoming Proof of Data Possession (PDP) are unlocking fast, cache-level storage of temporary data with highly efficient SPs and rising storage onboarding L2s, like Storacha.

This transformation positions Filecoin as the backbone of Web3 data storage, and top ecosystems are already recognizing its utility. Solana is storing its entire, indexed block history on the network thanks to the Triton One and DCENT teams. By leveraging Filecoin's decentralized storage infrastructure, Solana enhances data resilience and also makes its historical data more accessible and usable to explorers and researchers.

Filecoin is not only powering L1s but also the next generation of DePIN. Textile’s Basin is integrating data from WeatherXM, a community-powered weather network. Nodle is building a DePIN of smartphone nodes to capture and authenticate digital media, and the platform is integrating Filecoin to decentralize data storage on its Click camera app.

Hot storage will onboard a wave of Web3 projects to unlock the full potential of their data –– and provide the proof-of-concept for other web3 sectors needing fast storage and retrieval, like gaming and IoT, to integrate Filecoin into their data architectures.

3. Scaling the Filecoin Economy

As the network grows more sophisticated, the economy has evolved to scale with its expanding possibilities, focusing on reducing network-wide operating expenses and enhancing the efficiency of storage providers. The introduction of Distributed Deal Offering in the NV22 upgrade marked a significant milestone, substantially lowering SP deal-making costs. And Direct Data Onboarding enables builders to create smart contracts and new market actors to define the terms of storage agreements, making it easier than ever to close and execute deals.

Ongoing efforts to optimize SP costs are coupled with a strengthening pipeline of paying users. Early signals, like FilStor’s recent closure of the first 1 PiB enterprise paid storage deal on the network –– indicate a transition toward a more sustainable economic model alongside increased mainstream adoption for the protocol.

The emergence of decentralized exchanges and F3, a finality component designed to bring fast finality to Filecoin, pave the way for new economic opportunities on the network defined by cross-chain interoperability. This unlocks better UX using Filecoin in conjunction with other networks like Ethereum and is critical for the growth of the Filecoin L2 ecosystem.

And the wealth of data on Filecoin can also give rise to secondary markets on top of storage. The network is primed for marketplaces for storage clients to monetize their data for enterprise, research, and AI-training use cases. Already, Nuklai, a collaborative data marketplace and infrastructure provider for data ecosystems, has integrated Filecoin via Lighthouse to make the platform’s metadata publicly accessible.

Looking Above and Beyond

Storage is the bedrock of data’s lifespan on the web, and atop that bedrock, the world can build so much more.

The Filecoin ecosystem is laser-focused on tuning the core protocol to optimize scalability, efficiency, and interoperability, giving builders in compute, AI, DePIN, and other data-intensive sectors the breadth of resources to keep their data secure –– while unlocking its full value. With a thriving ecosystem of developers, storage providers, and partners, the network is well-equipped to drive widespread adoption. As we close out 2024 and train our sights on 2025 and beyond, Filecoin is poised to become indispensable for the future of data.