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pFIL: Parasail Filecoin Incentive Pool

Parasail Filecoin is a set of smart contracts implemented on the Filecoin Virtual Machine. It is an Incentive Pool for miners on Filecoin to opt in and for stakers to delegate their Filecoin to. It removes idiosyncratic risks across different Filecoin miners and lowers the complexity for Filecoin stakers to earn a share of the protocol rewards.

As the first ever Incentive Pool on Parasail, Parasail Filecoin includes a safety mechanism, called Safe Pledge. Safe Pledge is the portion of locked Filecoin that is free from slashing and thus fungible. In the context of Incentive Pool, the service providers are putting up their own locked Filecoin (amount exceeding Safe Pledge) for any slashing by the Filecoin protocol in the event of any service failure.

As such, the reward policy for staking in Parasail Filecoin is to earn a share of the Filecoin protocol block rewards. The service level guarantee is provided by Safe Pledge which is that the stakers’ Filecoin is only slashed when the miner’s share of the collateral is fully penalized.

By restaking their miner nodes, miners can mint pFIL up to the safePledge amount. There is always one Filecoin locked behind every pFIL. Storage providers can withdraw FIL by unstaking their minted pFIL to obtain liquidity from a DEX, and token holders can stake their FIL to acquire pFIL tokens and reap FIL mining returns. pFIL tokens can also be used in additional use cases such as restaking to secure new networks on Filecoin.

When locked FIL used to mint pFIL is unlocked, it will be put up in an auction for pFIL. The pFIL that is acquired from the auction will be burnt to reduce the supply of pFIL and the outstanding pFIL amount of the corresponding miner actor will be reduced accordingly. Based on the current pFIL/FIL ratio, new pFIL will be passively minted and distributed to pFIL holders as rewards.

Thus, pFIL is the tokenized representation of pledged FIL that’s considered safe. 1 pFIL is backed by 1 FIL that’s locked with the Filecoin blockchain at all time. Outstanding pFIL is backed by more pledged asset at work, generating larger and faster liquid FIL inflows. Hence, the protocol can recover liquid FIL faster than mining. pFIL is therefore supported by strong demand pressure, making the protocol more resilient and robust.

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Minting pFIL:​

  1. SPs repledge Miner Actors by delegating ownership to the protocol.
  2. Protocol evaluates safePledge based on asset structure and risk of MinerActors.
  3. Protocol allows SPs to mint pFIL 1:1 to pledged FIL up to the safePledge amount.
  4. After the protocol has recovered liquid FIL from the MinerActor, it will put the FIL up for Auction
  5. The amount of pFIL acquired from the auction will be used to reduce the outstanding pFIL amount of the MinerActor.
  6. SPs can also expedite the process by manually topping up pFIL or FIL to reduce their outstanding pFIL amount.
  7. After the outstanding pFIL amount is reduced to zero, SPs can claim back their MinerActors.

Acquiring pFIL:​

  1. SPs can unstake their pFIL into FIL or use pFIL for additional utilities.
  2. Token holders can acquire pFIL by staking FIL to gain exposure to FIL mining and reap pFIL rewards.
  3. pFIL can be restaked to secure new networks or can act as a building block for other strategies.

pFIL Auction:​

  1. Each batch of liquid FIL obtained from each MinerActor will be put up in an auction for pFIL based on the pFIL/FIL ratio.
  2. The pFIL that is acquired from an auction will be burnt to reduce the supply of pFIL and the outstanding pFIL amount of the corresponding MinerActor will be reduced accordingly.
  3. Based on the current pFIL/FIL ratio, new pFIL will be passively minted and distributed to pFIL holders as rewards.