Key Insights
• As of the end of Q1 2025, over 5,000 unique contracts have been deployed on the Filecoin Virtual Machine (FVM), supporting over 3.2 million transactions.
• Filecoin is set to launch Proof of Data Retention (PDP) and prepare for the Filecoin rapid determinacy (F3) upgrade to accelerate transaction settlements.
• The ecosystem has expanded partnerships between AI and blockchain networks, with projects like Aethir, KiteAI, and Cardano (Blockfrost) adopting Filecoin for decentralized, verifiable data storage.
• In March 2025, the Filecoin community launched FIL ProPGF, an on-chain funding initiative for public goods. Applications are now open, with the first batch of grants expected to be distributed in May.
• USDFC is a FIL-collateralized stablecoin developed by Secured Finance, introducing a native dollar-pegged asset to the Filecoin ecosystem. It allows users to borrow against FIL without liquidating their held assets, facilitating stable payments and DeFi participation. In this quarter, USDFC offered up to 6% annual interest on terms of 9.45 months, attracting users seeking stability amid FIL price fluctuations. Early use cases include media archiving, AI workloads, and Web2 data platforms. As the Filecoin ecosystem evolves, USDFC could play a larger role in achieving predictable pricing and expanding the adoption of decentralized storage services.
Primer
Filecoin (FIL) is building a data service marketplace, with the first service being archival storage on the InterPlanetary File System (IPFS). Filecoin uses a market-driven model, allowing users to negotiate storage transactions with providers at variable pricing. Storage transactions function like service agreements, where users pay providers to store data for a specified duration.
Filecoin utilizes an incentive model based on cryptographic proofs, Proof of Replication (PoRep), and Proof of Spacetime (PoSt) to verify whether storage providers are reliably storing client data over time. Providers earn FIL (the network's native token) as rewards for participating in storage transactions. If a storage provider fails to maintain reliable uptime or acts maliciously toward the network, they face penalties.
To retrieve data, Filecoin users pay retrieval providers for data access. Unlike storage transactions involving on-chain transactions, retrieval transactions settle payments off-chain using payment channels for faster retrieval. In addition to storage and retrieval, Filecoin aims to provide an open market for computational power to be contracted for running data, offering a more efficient alternative to traditional centralized systems. Key protocol upgrades enabling data computation services include smart contracts (Filecoin Virtual Machine - FVM) and scaling (InterPlanetary Consensus - IPC).
Key Metrics
Performance Analysis
Network Overview
Filecoin is primarily used for decentralized storage of data through two parties:
• Demand side, consisting of storage users needing data storage.
• Supply side, consisting of storage providers with excess storage capacity.
The volume of data stored in proactive storage transactions between users and storage providers measures the demand for Filecoin storage.
Storage Discounts
In the first quarter of 2025, approximately 1,300 PB (PiB) of data was stored on Filecoin through active storage transactions, down 13% from 1,500 PiB in Q4 2024. The number of active storage transactions also declined by 13%, from 43 million to 38 million. This reduction aligns with a broader strategic pivot from maximizing raw storage capacity to emphasizing high-value, enterprise-focused storage solutions.
In Q1 2025, daily new storage transactions on Filecoin decreased by 12%, from 3.1 PiB to 2.8 PiB. Total active transactions fell by 13%, from 43 million to 38 million.
This decline reflects a strategic shift this quarter toward more selective long-term storage use cases. Filecoin has partnered with institutions like the Smithsonian Institution, Internet Archive, and MIT to focus on preserving valuable cultural and academic data. These transactions tend to be larger in scale and duration, resulting in fewer overall transactions but higher storage value.
Meanwhile, projects like Aethir, KiteAI, and Storacha continue to adopt Filecoin for reliable, verifiable storage, focusing on quality and long-term integrity rather than raw transaction volume.
Utilization vs. Capacity
In the first quarter of 2025, Filecoin's storage utilization dropped from 32% in Q4 2024 to 30%. This was primarily due to an 8% decline in raw byte capacity, falling from 4.2 EB (EiB) to 3.8 EiB, as many storage providers exited the network.
These shifts reflect Filecoin's continued transition from incentivizing idle capacity to supporting high-value, long-term storage. Since peaking at 17 EiB in Q3 2022, total storage capacity has steadily declined as block rewards decrease and incentives are restructured to support verified data, persistent transaction execution, and retrieval performance. The Network v25 upgrade in March 2025 improves participation standards by streamlining transaction efficiency and preparing for rapid determinacy, which will reduce settlement times and require faster responding infrastructure.
Clients
According to Messari's guide on decentralized storage networks, Filecoin aims to provide cold storage solutions for enterprises and developers (e.g., archiving and recovery). Low storage prices make it an attractive option for businesses looking to store large amounts of data affordably. However, with the launch of Proof of Data Retention (PDP), Filecoin has begun to expand beyond cold storage. PDP supports lightweight, continuous verification of stored data, making the network more suitable for use cases requiring more frequent access and reliability. This also lays the groundwork for natively supporting more dynamic, S3-like storage solutions within the network.
DeStor is a service provider on Filecoin that connects clients to storage providers; it collaborates with Qamcom's Decentralized Data Security (DDS) to support a range of storage use cases. This includes data clients such as the Web3 gaming studio YayPal, which has over 500,000 users, and AI marketing analytics platform Fieldstream. Recent examples of onboarding clients cover both archiving (cold) and hot storage use cases:
• GhostDrive: Prioritizing privacy and security through encryption, decentralization, and advanced storage optimization techniques.
• Seal: Providing storage access for large clients such as the University of California, Berkeley, Starling Labs, Atlas Experiment, and Casper Network.
• CIDGravity: Focused on enterprise integration with open-source platforms like Nextcloud.
• Heurist and 375ai (via Akave): Utilizing Filecoin for AI and DePIN data storage.
• Humanode and Gaianet (via Storacha): Utilizing Filecoin for identity systems and AI data infrastructure.
• FanTV (via Lighthouse): Utilizing decentralized video storage and delivery.
• Intuizi: A Web2 SaaS company applying Filecoin to improve marketing data pipelines.
• The Defiant: A Web3 media outlet archiving investigative journalism and reports.
In addition to these examples, other storage solutions (including Lighthouse, RIBS, Retrieve, and Flamenco) are driving the adoption of both traditional and emerging storage workloads.
As of the end of the first quarter of 2025, Filecoin hosted 2,340 active datasets, a 3% increase from 2,263 datasets in Q4 2024. Among them, 804 clients joined large datasets exceeding 1,000 TiB, indicating a sustained interest in decentralized storage for large-scale, long-term use cases.
FIP-0092 was introduced during the Waffle upgrade in Q3 2024, implementing non-interactive Proof of Replication (NI-PoRep) to reduce proof complexity and entry costs. Additionally, in Q1 2025, the ecosystem’s strategic shift towards high-value, persistent storage use cases gained momentum, with major archival initiatives (Smithsonian Institution, Internet Archive, MIT Open Learning) and AI-focused projects (Aethir, KiteAI, Akave) joining significant datasets.
As Filecoin increasingly positions itself as an infrastructure for cultural preservation, AI data lakes, and multi-chain blockchain data archiving, the network's preparations for the launch of Proof of Data Retention (PDP) have also incentivized the onboarding of verifiable long-term storage clients.
FVM Traction
As part of its broader transition from a pure storage network to a programmable data infrastructure layer for AI and Web3 applications, Filecoin launched the Filecoin Virtual Machine (FVM) in March 2023. The FVM enables Ethereum-style smart contracts to run directly atop Filecoin’s storage layer, allowing developers to build applications that automate data loading, pricing, retrieval, and computational coordination. Adoption has steadily grown since its launch; as of March 31, 2025, over 5,000 unique contracts have been deployed on FVM, facilitating over 3.2 million transactions.
In contrast, native token activity measured in FIL shows continued growth. Inflows increased to 23 million FIL (+11% month-over-month), while outflows grew to 18 million FIL (+17% month-over-month). Despite a 44% drop in FIL price this quarter, activity priced in FIL still saw growth, indicating an expanding utilization of Filecoin's native services. The divergence between token transaction volume growth and declining USD value suggests increased engagement with Layer-2 solutions and decentralized storage use cases, including AI-related datasets.
Financial Overview
Filecoin's revenue model shares similarities with Ethereum, as its gas system is inspired by EIP-1559, which burns a portion of network fees to regulate congestion. However, unlike Ethereum, Filecoin’s economy is storage-driven, where storage users pay fees, and storage providers earn revenue while managing collateral and penalties.
Network Fees
According to Messari's revenue analysis, Filecoin's fees include:
• Basic fees: Determined by block space congestion and required by any storage proof.
• Batch Fees: Used to bundle storage proofs to optimize costs.
• Overestimated Fees: Fees required to optimize gas usage.
• Penalties: Charged for storage provider failures.
In Q1 2025, Filecoin's total network fees dropped to $457,000, down 65% from $1.3 million in Q4 2024, reflecting a 12% decline in daily storage transactions leading to reduced activity.
Basic fees decreased by 89% to $59,000, contrasting with the temporary peak in Q4 2024, indicating a relief in network congestion.
Overestimated fees decreased by 93% to $2,500, indicating improvements in gas estimation and reduced transaction volatility.
Covering Precommit and Provecommit batch fees, which decreased by 32% to $130,000, consistent with slower storage onboarding speeds and a reduced number of new storage transactions.
Penalties decreased by 49% to $270,000, continuing a multi-quarter trend of decline as the network consolidates around more reliable, enterprise-focused providers.
Market Cap
In the first quarter of 2025, the circulating market cap of FIL (in USD) decreased by 41% to $1.8 billion, down from $3 billion in Q4 2024. The decline was due to a 44% drop in FIL token price, falling from $4.94 to $2.78, while circulating supply increased by 4.7% to 646.2 million FIL, consistent with previous issuance rates.
DeFi Ecosystem
Liquid staking TVL fell to $136 million, down 42% from last quarter's $233 million, due to falling FIL prices and slowed staking inflows. The qualifying staking rate also dropped from 21% to 19%, reflecting a more cautious attitude from token holders amid market volatility.
TVL Trends
Filecoin's DeFi TVL saw steady growth at the end of 2024 but slowed in Q1 2025. TVL decreased by 49%, from $73 million in Q4 2024 to $37 million in Q1 2025. In contrast, TVL (FIL) decreased by only 10%, from $15 million to $13 million. This discrepancy is primarily due to a 44% drop in FIL price this quarter.
Qualitative Analysis
Major Developments
Network v25 Upgrade (“Teep”): The Network v25 upgrade (“Teep”), deployed on March 26, 2025, introduced protocol improvements to optimize storage operations and prepare for rapid determinacy (F3). Key changes include:
• Simplified the calculation of termination fees for storage providers.
• Added ephemeral storage support in the Filecoin EVM (FEVM) to enhance Ethereum compatibility.
• Implemented consensus updates required for F3 activation.
This upgrade improves network efficiency, expands smart contract functionality, and lays the groundwork for shortening transaction finality times.
Filecoin Rapid Determinacy (F3): The Rapid Determinacy (F3) upgrade aims to reduce transaction determinacy time on the Filecoin network from approximately 7.5 hours (900 epochs) to a few minutes (4 epochs), representing a 100-fold improvement. F3 was announced in Q3 2024, underwent passive testing at the end of Q4 2024, and was improved through Q1 2025. While the Bootstrap phase was successfully executed, challenges in the Steady State phase (including inconsistent progress and bandwidth issues) led to adjustments in the deployment timeline. Mainnet activation is now planned to coincide with the Network v25 (“Teep”) upgrade in Q2 2025, which will introduce additional consensus optimizations.
F3 enhances transaction throughput, smart contract execution, and cross-chain functionality. It implements MCOPY opcode (EIP-5656 support) to optimize Solidity contract performance and introduces historical random number retrieval to improve the security of decentralized applications.
For storage providers, F3 aims to simplify onboarding and transaction execution by significantly shortening finality times, enabling faster transaction settlements and more reliable service level agreements (SLAs) without requiring additional hardware upgrades. This upgrade also enhances node efficiency, making it easier for new network participants to access lightweight clients and improve resource efficiency.
Proof of Data Retention (PDP): The Proof of Data Retention (PDP) mainnet is set to launch at the end of Q1 2025, following final contract optimizations, external audits, and integration testing with early adopters such as Storacha and Akave.
PDP is a verification system designed to regularly check whether storage providers continue to hold client data without requiring complete retrieval or decoding of files. It complements Proof of Replication (PoRep), which adds a continuous lightweight method to verify that data was initially stored correctly, ensuring long-term storage integrity throughout the transaction period.
Layer 2 Scaling and Cross-Chain Storage: Launched at FIL Bangkok in November 2024, Filecoin's new Layer 2 solutions Basin, Akave, and Storacha continued development in Q1 2025 to enhance scalability for decentralized storage, AI adoption, and multi-chain interoperability.
• Basin expands early use cases through applications like WeatherXM and Recall Network, integrating hot and cold storage with S3 compatibility.
• Akave advanced its Yucca testnet, building an AI-optimized data lake supported by ZK proofs to ensure data integrity and reduce export costs.
• Storacha continues to operate in closed Alpha, focusing on verifiable data ownership and fragmented file management for large AI datasets.
These developments are expected to further benefit from the rollout of the Proof of Data Retention (PDP), enabling more efficient hot storage solutions throughout Filecoin.
Partnerships and Ecosystem Expansion
• Filecoin x Cardano and Solana: Cardano's Blockfrost and Solana's Old Faithful initiative are expanding the adoption of decentralized storage by archiving blockchain data on Filecoin. Blockfrost is a key API service supporting Cardano developers, integrating Filecoin to back up IPFS node clusters and providing more resilient decentralized data storage for Cardano applications. Similarly, Old Faithful uses Filecoin to preserve Solana's complete historical ledger, reducing reliance on centralized storage.
Decentralized AI Data Storage: Several projects expanded their use of Filecoin in Q1 2025 to store AI-related datasets in a decentralized, verifiable manner.
• Aethir: A decentralized cloud platform optimizing GPU resources for AI workloads.
• KiteAI: Developing infrastructure for AI agents based on verifiable decentralized data sources.
• Nuklai: Focused on building decentralized knowledge graphs and data marketplaces.
• SingularityNET: Integrating Filecoin for secure management of metadata storage and decentralized AI services.
Decentralized AI Agent Infrastructure: Several projects leverage Filecoin to support decentralized AI agents through verifiable coordination, reputation, and execution proofs.
• Recall Rate: Building a decentralized reputation system for AI agents using immutable data proofs.
• Theoriq: Facilitating coordination between AI agents by providing open, verifiable access to decentralized datasets.
• Ungate AI: Developing decentralized identity systems and execution proof mechanisms for AI agent interactions.
Developer Programs and Community Development:
• FIL ProPGF Launch: In March 2025, the Filecoin Foundation launched FIL ProPGF, a proactive on-chain funding mechanism aimed at supporting the development of public goods across the Filecoin ecosystem. Applications are now open, with early funding decisions expected before May 2025. The initiative prioritizes projects in tooling, research, governance, user experience (UX) improvements, and customer success programs, aiming to create sustainable, community-driven innovation.
• FILFrame Toolkit: The Filecoin Foundation released the FILFrame toolkit in early 2025 to simplify front-end development of Filecoin-based applications. It provides ready-to-use React components and TypeScript utilities that help developers more easily integrate storage functionality, smart contract interactions, and network tools into decentralized applications (dApps) built on Filecoin.
• Portrait Public Beta: The decentralized website builder Portrait launched its public beta on the Ethereum Layer 2 testnet Base Sepolia in early 2025. It enables users to create and publish peer-to-peer websites by storing content on IPFS and using Filecoin to support it for permanent decentralized hosting. The platform aims to make decentralized web publishing more accessible by eliminating the need for centralized servers.
• Drips x FIL-RetroPGF-2: Encouraging FIL-RetroPGF-2 grant recipients to adopt the Drips toolkit for allocating funds to essential upstream dependencies, fostering a sustainable funding ecosystem.
Recognition and Events:
• Filecoin AI Blueprint Hackathon: A four-week hackathon organized in collaboration with the Encode Club, focusing on building decentralized AI infrastructure, emphasizing data sourcing, storage, and integrity.
• FIL Developer Summit 6: Scheduled for May 12-13, 2025, in Toronto, with a virtual kickoff meeting from April 23-30 to support builders focused on storage, retrieval, and governance tools.
• Cultural Preservation of Storage: In the first quarter of 2025, as part of a large-scale preservation initiative, over 500,000 digital artifacts of significant cultural importance were archived on Filecoin. Institutions such as the Smithsonian Institution, Flickr Foundation, Internet Archive, MIT Open Learning, and Starling Lab collaborated with the Filecoin Foundation to safeguard historical records, photographs, educational content, and governmental web archives.
These efforts focus on ensuring long-term data resilience, reducing reliance on centralized servers, and preserving vital cultural heritage for public, academic, and historical institutions. Examples include the Smithsonian's early audio archives, photography collections from Flickr Commons, the Internet Archive's End of Term Web Archive, and MIT's OpenCourseWare repository.
• Media and Research Expansion: Several news, research, and academic organizations expanded their use of Filecoin in Q1 2025 to safeguard contemporary information assets. Web3 media outlet The Defiant began archiving its investigative journalism on Filecoin to address risks like link rot and content censorship. Rolling Stone expanded its decentralized media program by preserving parts of its digital archives. MIT Open Learning and the University of California, Berkeley enhanced their decentralized storage strategies to protect educational course materials, open research data, and institutional records.
• Security Program Expansion: The Filecoin Foundation expanded its decentralized incident response network, broadening the scope of chaos testing and fuzz testing, continuing to evolve its bug bounty program (which has awarded over $650,000 to date), and launching a vetted auditor network to streamline security audits.
Key Governance Dynamics
• FilPoll V2 Launch: In February 2025, the Filecoin Foundation launched FilPoll V2, a governance tool that combines tracking of Filecoin Improvement Proposals (FIPs), sentiment surveys, and community proposal reviews. This upgrade aims to enhance transparency, provide broader community feedback, and support more inclusive decision-making in Filecoin governance.
• Governance Milestone: To date, over 100 community-reviewed FIPs reflect a growing engagement with the protocol.
• FIDL Reporting Initiative: The Filecoin Incentive Design Lab (FIDL) launched a new reporting dashboard for clients, storage providers, and allocators, enhancing visibility of metrics and retrievability tracking across the network.
• Stablecoin Development (USDFC): In Q1 2025, as interest in USDFC grew, Filecoin's financial tools expanded with USDFC, a FIL-collateralized stablecoin developed by Secured Finance. USDFC allows users to transact with a dollar-pegged asset without liquidating FIL, supporting new use cases for DeFi, long-term trade execution, and storage payments. In this quarter, USDFC provided up to 6% annual interest on terms of 9.45 months, attracting interest from users seeking stability amid FIL price volatility. Early use cases range from media archiving to AI workloads and Web2 data platforms. As the Filecoin ecosystem develops, USDFC may play a greater role in achieving predictable pricing and expanding the adoption of decentralized storage services.
Conclusion
In Q1 2025, Filecoin continued its strategic transformation from emphasizing raw storage volume to prioritizing high-value enterprise users and storage providers. While proactive storage transactions and network utilization have declined, these shifts reflect an intentional pivot toward long-term archiving, AI-optimized datasets, and Web2/Web3 enterprise integration.
Major advancements this quarter included the nearing finalization of the data ownership proof (PDP) for continuous data validation, ongoing Layer 2 scaling initiatives (Basin, Akave, Storacha), and preparations for the rapid determinacy (F3) upgrade to improve transaction settlement speed. Despite a 41% drop in FIL's market cap and a 49% decline in DeFi TVL (in USD), activity priced in FIL remains resilient, supported by new customer onboarding and growth in the retrieval market.
The ecosystem expanded through collaborations with major networks (Cardano, Solana) and AI infrastructure projects (Aethir, KiteAI, Nuklai). New community initiatives like FIL ProPGF and governance upgrades like FilPoll V2 strengthened decentralized participation. Significant cultural preservation efforts, media collaborations, and recognition of initiatives like Impact Base further demonstrate Filecoin's real-world impact.
