DARMA Capital Launches $100M Filecoin Use Swap to Grow the Decentralized Data Storage Ecosystem

February 14, 2022 — DARMA Capital, LLC (“DARMA”) today announced the launch of its Filecoin Asset Use Swap (“FAUS”) product, an institutional offering created to diversify and grow the Filecoin Network and the availability of decentralized data storage. The proliferation of technologies such as AI, automation, IoT and cloud computing results in quintillions of data bytes that are created daily and an accelerating demand for storing that data. The Filecoin Network revolutionizes data storage and retrieval by providing a less expensive, more secure and decentralized alternative to existing cloud data storage providers and content delivery networks through the unique participation of Storage Providers (“SPs”) on its network.

Juan Benet, Founder and CEO of Protocol Labs said “The Filecoin Network is growing at a tremendous pace — massive amounts of storage are being added daily. One of the key problems facing Storage Providers globally is access to FIL at cost-effective rates, and with low collateral requirements. DARMA’s brilliant financial innovations can meet the needs of SPs by supporting their rapid growth. By greatly minimizing capital costs, DARMA can fuel expansion for Filecoin SPs, and build a much more robust storage market for Filecoin Clients world-wide. A big thank you to DARMA for driving innovation to help onboard and safeguard Exabytes of valuable data with Filecoin.”

FAUS enables eligible SPs to access the “use” of FIL without the capital expenditure of purchasing FIL or posting significant amounts of collateral. Typical asset lending transactions require 80–120% of the notional amount as collateral whereas the FAUS structure is more capital-efficient for the SP as it simply requires collateral for slashing risk. SPs use the FIL for their pledge requirements, allowing them to generate more block rewards by providing additional data storage capacity to the Filecoin Network.

James Slazas, Founder and CEO of DARMA Capital said “DARMA has a long history of supporting Filecoin which is why we are pleased to enable more Storage Providers to participate in the network by removing a material CapEx hurdle. Beyond meeting SP demand for Filecoin, we expect to add meaningful diversified growth by also providing existing FIL holders the same investment opportunity as DARMA by enabling them to earn FIL rewards on their holdings while knowing exactly where their assets are being used.”

The genesis cohort of FAUS participants add a total of 600 Pebibytes in storage capacity from North America, Europe, Asia and Australia, all storing live client data and paving the way for mainstream adoption of Web3.0 technologies. To participate in a FAUS, Storage Providers must be able to accept and maintain client data using Filecoin+. DARMA assesses potential Storage Providers based on their expertise, current storage provisioning capacity and growth projections. All Storage Providers must be Eligible Contract Participants (ECPs)* and will require full KYC/AML verification prior to entering into a Use Swap with DARMA Capital.

“We are excited to contribute to innovation in this space by launching the first crypto-native financial instrument that integrates the Filecoin protocol with derivative contracts in order to provide participants with access to low cost capital. While building the FAUS, our team dove deep into the mechanics of the Filecoin Network to understand how to best support Storage Providers. We focused on a robust technical setup that utilizes a secure DARMA Owner Wallet structure and allows for both the streamlined distribution and withdrawal of FIL, in addition to active monitoring of SP Actor Addresses. We look forward to partnering with more Storage Providers through FAUS and continuing to build the critical blockchain infrastructure that is decentralized and secure data storage on Filecoin” said Hyunsu Jung, Filecoin Product Lead at DARMA Capital.

DARMA is extending this swap globally to new and existing Storage Providers — for more information please contact Hyunsu Jung via email at hjung@darma.capital.

About

Digital Asset Risk Management Advisors (DARMA Capital) is an investment fund registered with the Commodity Futures Trading Commission (CFTC) as a Commodity Pool Operator (CPO), Commodity Trading Advisor (CTA) and swap firm focusing on the blockchain asset class.

Filecoin is a blockchain-based decentralized digital storage network (DSN) that incentives cooperative storage via a public ERC-20 token (FIL) and digital payment system. With the Filecoin Network, users have access to a variety of Storage Providers who compete for storage and retrieval contracts.

Footnotes

*An entity that is classified by the Commodity Exchange Act (CEA) based on its regulated status or amount of assets. The definition of “Eligible Contract Participant” (ECP) is found in Section 1a(18) of the CEA (7 U.S.C. § 1a(18)). ECP classification permits these persons to engage in transactions (such as trading on a derivatives transaction execution facility) not generally available to non-eligible contract participants such as retail customers.

Disclosure

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Press Contact

Hyunsu Jung

hjung@darma.capital