Background

The Filecoin network has reached a critical moment in the blockchain industry. In order to rekindle the enthusiasm of network participants and unite the consensus of community members, the community needs greater financial and operational transparency of Protocol Laboratory (PL) and Filecoin Foundation (FF).

At present, the number of tokens belonging to PL and FF has greatly exceeded the total amount of tokens mined by the Filecoin storage provider (SP) community. With the increase of FIL, the community also needs transparent financial planning to bring the confidence of priority and the expectations of token holders. Involving community members in governance, operational priorities, financial planning and financial auditing will help to enhance the correct use of network resources, enhance community confidence and build consensus.

Proposal

1. Clarify the roles and responsibilities of PL and FF: the principle of Filecoin Foundation as a blockchain project foundation. Protocol lab is the core developer of Filecoin network. Even if the foundation is registered as a commercial entity in the United States, it should act like a non-profit organization or a software foundation and define its status. Its main responsibility is to guarantee the future funds of the network, help the community manage the network changes (not letting the core members control this process) and the ecological prosperity of the Filecoin network. The long-term goal of the foundation is to take the established FIL tokens and independently support the work of any team developed on the Filecoin network. The protocol lab needs to use its existing FIL tokens to continue to promote the core development of the Filecoin protocol, make it more secure and high-performance, and provide funds for the development of Web3.0 related protocols. In the long run, foundations and laboratories should not be the only contributors and leaders of Filecoin, but should be part of the entire ecosystem of Filecoin.

2. Clarify the liquidation process of PL and FF: PL and FF shall publicly disclose the liquidation process of acquired tokens on which their daily operations depend. Excess tokens or assets should be locked or restricted until the financial plan for the next fiscal year is approved by the community and a new liquidation quota is granted.

3. Transparent financial and operational planning: PL and FF foundations should make financial plans for each fiscal year and submit them to the community for discussion and voting approval. Publish financial statements every six to twelve months and be audited by the community or the third party. Audit reports should be disclosed regularly.

4. Disclosure of current currency holdings: fully disclose all addresses and quantities of currency holdings. Future liquidation plans need to be in line with finance and planning. A planned liquidation amount (annual and monthly) and a detailed ownership balance management plan (disclosure of ownership address and quantity) are required. After obtaining the approval from the community, liquidation plan appoints a financial manager to report the number of liquidated tokens, the number of tokens to be liquidated and the amount of liquidation every month;

5. We strongly appeal to Protocol Labs and Filecoin Foundation to work together, share the transparency of their respective FIL tokens, establish a clear liquidation process, and allow the community to participate/approve the plan and be audited. As one of the largest single holders of FIL tokens, Protocol Labs should shoulder its own responsibilities, demonstrate its long-term planning for the Filecoin network and its long-term commitment to the Filecoin community, and jointly promote the sustainable development of the web3 storage network.

Impact and expected effect on the ecology and price of Filecoin

With the continuous development of blockchain technology, as a representative of decentralized storage network, Filecoin is gradually becoming the focus of the industry. However, in order to realize the long-term prosperity and sustainable development of Filecoin network, some key issues need to be solved, the most important of which is the financial and operational transparency of Protocol Laboratory (PL) and Filecoin Foundation (FF). Recently, the community’s transparency proposal for PL and FF has aroused widespread concern, which will have a profound impact on the ecology and price of Filecoin.

First of all, the improvement of financial and operational transparency will greatly enhance the confidence of the Filecoin community. At present, PL and FF hold a large number of FIL tokens, and their use and management are directly related to the interests of the whole network. By clarifying the roles and responsibilities of PL and FF, as well as publicly disclosing the liquidation process and currency holdings, community members will have a clearer understanding of the operation of these institutions, thus more trusting and supporting the Filecoin network. This improvement of trust will help to unite community consensus, promote more storage providers (SP) to participate in the network, and then expand the storage capacity and market share of Filecoin.

Secondly, transparent financial and operational planning will promote the healthy development of Filecoin network. By making a financial plan for each fiscal year and submitting it to the community for discussion and voting approval, PL and FF will pay more attention to the long-term benefits of the network rather than the short-term benefits. This will help to ensure the rational use and distribution of FIL tokens and avoid excessive issuance or abuse of tokens. At the same time, regular financial statements and audits will also improve the transparency and credibility of the network and attract more investors and partners.

In addition, the improvement of financial and operational transparency will also have a positive impact on the price of Filecoin. With the enhancement of community confidence and the healthy development of the network, investors’ attention and interest in Filecoin will continue to increase. This will increase the demand for FIL tokens, which in turn will increase the price. At the same time, transparent clearing process and currency holding will also reduce the uncertainty and worry in the market and help stabilize the price fluctuation of FIL tokens.

However, it should be pointed out that the improvement of financial and operational transparency is not an overnight process. PL and FF need to make efforts to formulate and implement relevant policies and processes, and they also need to face some challenges and difficulties. For example, how to ensure the fairness and rationality of the liquidation process, how to protect the interests of currency holders, how to prevent the abuse of tokens and other issues need to be seriously considered and solved.

To sum up, improving the financial and operational transparency of the protocol laboratory and the Filecoin Foundation will have a positive impact on the ecology and price of Filecoin. By enhancing community confidence, promoting the healthy development of the network and stabilizing price fluctuations, this will help promote the sustainable development of the Filecoin network and create more value for investors and partners. We expect PL and FF to actively respond to the voice of the community and work together to achieve this goal.