ICHI, a protocol for creating decentralized networks, has announced oneFIL, a stablecoin for the Filecoin community.

Filecoin, a decentralized network that provides users with storage space, is partnering with ConsenSys to expand its digital marketplace on the Ethereum network. ConsenSys previously announced plans to work with Protocol Labs, the team behind the Filecoin network, to integrate Filecoin with Ethereum in search of better interoperability.

The next step in the plan appears to be oneFIL; its purpose is to provide a stablecoin for the transactions needed to support application development on the network. It also aims to provide better discounts and incentives for buyers and providers of Filecoin storage.

A stablecoin is a cryptocurrency that is usually pegged to (and many of which claim to be backed by) a fiat currency, and therefore less volatile than traditional cryptocurrencies like bitcoin.

A stablecoin is essentially a cryptocurrency with an "anchor" attribute, and its goal is to anchor a certain off-chain asset and maintain the same value as it. In order to maintain price stability, stablecoins can be mortgaged by off-chain assets (that is, mortgage stablecoins), or use an algorithm to adjust the supply and demand relationship at a certain point in time (that is, algorithmic stablecoins).

oneFIL is not much different from a typical stablecoin such as Tether's USDT or Circle's USDC, as it is itself backed by other stablecoins. The oneFIL stablecoin will be "over-collateralized" by a combination of USDC and Filecoin (FIL).

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What is the significance of oneFIL?

The goal of the cooperation between ICHI and oneFIL, perhaps even bolder, is to become what Bitcoin has always promised - a "peer-to-peer electronic cash system".

Whether Bitcoin fulfills Satoshi Nakamoto's own lofty goals for cryptocurrencies is debatable. In fact, last week, the Bank for International Settlements slammed Bitcoin for having “little redeemable public interest attributes,” calling it (and other cryptocurrencies) “a speculative asset” rather than a real currency.

Stablecoins like Tether try to provide a solution to the volatility of the crypto market, and oneFIL is the first attempt to provide Filecoin users with stablecoins for transactions.

According to people familiar with the matter, the oneFIL stablecoin may even have an impact on DeFi on Filecoin. DeFi, short for decentralized finance, refers to a range of financial products (usually running on the Ethereum network) that eliminates the need for third-party intermediaries.

The team behind oneFIL believes that stablecoins can help the growth of the Filecoin network itself. The spokesperson said: “oneFIL can now be used to pay for hardware fees and storage fees, as well as earn income in DeFi and more.

Corbin Page, product director of ConsenSys Codefi, said, "oneFIL can serve as a stable medium of exchange for the Filecoin community."

What is the mode of operation of oneFIL?

Filecoin is a peer-to-peer network that provides users with massive cloud storage space.

On the Filecoin network, users pay to store their files on computers designed to keep them safe. The price of this storage is determined by the open market, not by any traditional storage service company.

Those who store information on behalf of others can generate FIL, the native cryptocurrency of the Filecoin network. But like many other cryptocurrencies, the price of FIL is also prone to volatility. oneFIL enables Filecoin users to rely on a reliable unit of transaction and unit of account. Of course, this statement was also released at a time when the price of FIL was sluggish. The cryptocurrency fell 28% in the last month.

Previously, users needed to sell their FIL before buying other stablecoins. However, with oneFIL, this problem is solved. To generate oneFIL, users must purchase FIL.

The team behind oneFIL stated that there are also "political" and "growth" considerations behind the launch of the stablecoin. Other stablecoins are managed by other projects. This means they are less likely to lock value into Filecoin's priorities. In turn, this also means that the Filecoin community can channel the value of the stablecoin into aspects such as adoption incentives.

Filecoin's business model has impressed people in the past. The general manager of Wedbush Securities, a Wall Street investment bank, previously revealed that the price of Filecoin may double in the next 12-18 months because the network represents the most promising innovative model in the encryption field.