Background on Filecoin

Filecoin is a decentralized marketplace for data storage services. Storage providers lock up Filecoin (FIL) as collateral to meet the network’s Service Level Agreement (SLA) requirements. If a provider fails these requirements, the protocol can slash a portion of the locked collateral.

Beyond cold storage, Filecoin can potentially support services such as hot storage, retrieval, and compute, though these areas are not yet fully covered by Filecoin’s native SLA. Parasail adds programmable and enforceable SLA features, enabling more advanced use cases while ensuring on-chain accountability.

Storage providers often seek additional collateral to scale their operations, expand revenue, and meet growing data demands. Meanwhile, token holders who do not operate hardware infrastructures look for ways to delegate their tokens and share in the network’s growth, creating a complementary dynamic between providers needing capital and delegators looking for returns.