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Liquid staking aims to enhance the efficiency, security, and accessibility of the staking process. This can bolster staking participation, thereby fortifying the network's overall security and stability.
For Filecoin Storage Providers often struggling with capital access for pledges, liquid staking proves beneficial. Liquid staking reduces initial capital requirements and enhances capital efficiency for FIL pledges, potentially drawing more miners and expanding the Filecoin storage network.
For Stakers the Collectif protocol offers a native yield-bearing asset. Staking FIL mints Collectif Filecoins LST tokens (clFIL). This primary storage mining derivative token's price is determined by total accumulated mining fees.
Stakers can maximize returns as the Collectif DAO optimizes SPs' mining rewards by up to 40%. The clFIL token also serves as a hedge against high FIL circulating supply inflation.
Additionally, the Collectif liquid staking protocol mitigates staking risks, such as potential losses from network slashing due to SP misconduct. SPs are required to maintain collateral to cover possible slashing losses, ensuring FIL stakers are compensated for any SP misconduct.

Problem Statement

Filecoin Storage Providers (SPs) have to post collateral (in FIL) to onboard storage capacity to the network and to accept storage deals. While important for security, the need to pledge collateral creates friction and an immediate barrier that limits SP participation.
Liquid staking assists SPs in meeting these pledge capital requirements. Previously, many SPs used under-collateralized loans from centralized entities, which required ownership of their primary miner accounts, presenting potential risks. Liquid staking offers a more decentralized, secure alternative.

Implications for the Filecoin network

Currently, regional centralization resulting in uneven storage capacity distribution risks Filecoin's censorship resistance. Liquid staking can democratize mining, motivating Storage Providers in less represented regions to boost their network capacity. This leads to balanced storage capacity growth, enhancing the network's resilience.
Once the Collectif DAO's governance is fully decentralized, it aligns with Filecoin's decentralization mission. In the future, the DAO could guide sector allocations and deal-making for Storage Providers, promoting ethical behavior and network growth.

Liquid Staking Components

  • Liquid Staking Pool, which is the main contract that allows stakers to easily deposit their FIL and get yield out of the network storage mining, and Storage Providers to access this FIL for their sector pledges.
  • A Storage Providers Registry is a database that maintains a record of all the Storage Providers on the network. This registry allows Liquid Staking Pool to interact with Storage Providers, and determine their risk profile and FIL allocation.
  • A Miner Collateral Module is a system that allows Storage Providers to pledge collateral in order to participate in the staking process. The Miner collateral module can help to reduce the risks associated with staking, such as the risk of being penalized (or "slashed") for misbehaving on the network.
  • A clFIL/FIL AMM pool, which is a system that allows users to easily exchange clFIL (the token used for staking on the Filecoin network) and FIL (the native token of the Filecoin network). This AMM (automated market maker) pool can help to ensure that there is sufficient liquidity for clFIL, which can make it easier for users to participate in the staking process.