In the first quarter of 2023 (Q1), the Filecoin [FIL] storage network saw several significant advances. The most notable of them was the March release of the Filecoin Virtual Machine (FVM), which prepared the path for the creation and implementation of Ethereum [ETH]-style smart contracts.
FIL has retracted by more than 8% since its inception, although a big portion of this was due to heightened FUD in the broader market, which was worsened by macroeconomic causes.
As conditions improved, the cryptocurrency recovered and registered weekly gains of roughly 12% until press time, according to CoinMarketCap statistics.
Messari, a blockchain analytics business, released a report on Filecoin’s network performance in Q1. One of the most important takeaways was the 5% increase in protocol revenue from quarter to quarter (QoQ). In USD terms, revenue increased by 21% to $6.9 million. The protocol income, or total fees produced on the chain, was the sum of the base, batch, overestimation, and penalty fees.
On the other hand, supply-side income, or fees paid to storage miners, fell 7% from Q4 22. Messari emphasized that a rise in new storage transactions was driving growth in protocol revenue. A storage agreement is similar to a contract in which consumers in need of data storage pay storage providers’ costs to store data for a certain period of time. Furthermore, the Filecoin Plus (Fil+) program, which paid storage providers benefits for engaging in the transaction, had a significant role in the 14% increase in daily new deals in Q1 23.
Furthermore, the research emphasized how the advent of FVM increased trading activity on the network. As of March 31, approximately 440 distinct contracts had been implemented, resulting in almost 44,000 transactions. According to DeFiLlama statistics, the total value of assets locked (TVL) on Filecoin more than quadrupled in Q1. On February 21, the TVL achieved an all-time high of $3.15 million. However, market uncertainties slowed its progress in March.
According to Coinglass, FIL’s Open Interest (OI) increased by roughly 6% in the previous 24 hours in the futures market. Weekly, the OI increased by 25% to $170 million. A price increase followed by an increase in OI is often regarded as a positive indication that confirms the uptrend.