Introducing USDFC, a FIL-backed stablecoin specifically for the Filecoin ecosystem!
introduce
We are excited to launch USDFC (USD for the Filecoin community), a FIL-backed stablecoin built specifically for the Filecoin ecosystem. USDFC (also known as “USDF Coin”) is more than just another stablecoin. It is designed to be the backbone of financial stability and growth within the Filecoin network, providing Filecoin users with the flexibility and financial infrastructure they have been waiting for.
“Just as DAI revolutionized DeFi by introducing stability to Ethereum, USDFC is poised to bring the same level of stability to the Filecoin ecosystem.” — Masa, Founder and CEO of Secured Finance AG.
Rising to the challenge
Secured Finance's journey began with creating a fixed-rate lending market, but we quickly realized that maintaining liquidity with fixed rates and redemption dates was a challenge. This liquidity mismatch is a well-known problem in traditional finance, especially in emerging markets. Borrowing from traditional market solutions, we realized we needed a unique approach to meet the specific needs of the Filecoin community.
Lessons from traditional financial markets
In traditional finance, capital requirements often favor lower floating rates, while investors seek higher fixed returns. Financial institutions manage this gap through derivatives such as interest rate swaps. However, these instruments are complex and not easily translated to decentralized finance. To address this, we need a solution tailored to the crypto ecosystem - one that supports liquidity while meeting the different needs of borrowers and lenders.
Turning to the solution: USDFC
Our answer is USDFC — a CDP-based stablecoin backed by FIL. By pledging FIL, users can gain access to stablecoin liquidity without having to sell their holdings. USDFC provides stability, predictable lending, and greater liquidity, directly addressing the needs of borrowers and lenders in the Filecoin ecosystem. This approach mirrors solutions in commodity markets, which aim to maintain liquidity while supporting access to capital.
Contributing to the Filecoin ecosystem
Our main focus is issuing USDFC, a FIL-collateralized stablecoin specifically for the Filecoin ecosystem. The Filecoin network currently lacks stablecoin options like USDC or USDT, which creates high volatility and limits value storage options — a challenge that Ethereum initially faced before DAI stabilized its DeFi ecosystem.
For example, DAI brings significant stability to DeFi and has a market cap of over $5 billion, allowing the ecosystem on Ethereum to thrive. USDFC aims to bring the same level of stability to Filecoin, boosting trading and investment potential within the ecosystem.
Meeting stable demand
The lack of a stablecoin in Filecoin has resulted in an ecosystem that suffers from high volatility and limited value storage options — issues similar to those faced by Ethereum before the launch of DAI. By providing a stable, FIL-backed currency, USDFC fills a critical gap in the Filecoin ecosystem, allowing more FIL to be used to store data. This stability is critical to encouraging broader adoption and promoting sustainable growth.
Solving the challenges faced by Filecoin holders and storage providers
Filecoin holders and storage providers often face a fundamental problem: their operating costs (such as hardware, electricity, and maintenance) are usually paid in U.S. dollars. If these ecosystem members must sell FIL to pay for costs, then these FIL cannot be used to provide data storage utility and support the network.
By enabling the issuance of USDFC backed by FIL, storage providers can obtain USD funding while holding their FIL for use on the network, thereby maintaining asset value and market stability. This approach has a similar effect to asset-backed loans in traditional finance, allowing users to raise funds while retaining assets.
How to use USDFC on the testnet
Mint stablecoins: Deposit Filecoin (FIL) and mint USDFC through our stablecoin app (https://usdfc.secured.finance).
Instant Payments: As an ERC-20 token, USDFC can be quickly used to make payments from popular wallets such as mobile blockchain wallets, MetaMask, or hardware wallets.
Receive Funds: Merchants who accept USDFC can easily receive payments by sharing their wallet address via QR code or text.
Quick conversion: Convert USDFC to other tokens using SushiSwap or a cross-chain bridge, then transfer to an exchange in your jurisdiction to get local fiat currency.
Earn yield: Deposit USDFC into Secured Finance’s fixed-income lending app to earn a stable return. (On the app, select Filecoin Mainnet after connecting your wallet.)
Through these simple steps, USDFC provides users with a seamless payment, income generation and currency exchange experience.
Future expansion of USDFC utility
Our plans for USDFC go beyond its current functionality; we are actively expanding its role both within and beyond Filecoin:
Cross-chain transactions: Enable the exchange of USDFC with other major cryptocurrencies such as FIL, ETH, USDC, and USDT.
Ecosystem Partnerships: Build partnerships to make USDFC a recognized payment method across the Filecoin ecosystem.
Real World Payment Integration: Integrate with major payment gateways so that users can use USDFC as USD in real world transactions.
Earn Functionality: Launching the “Earn” feature, users can lock USDFC to generate yield through a delta-neutral strategy while providing storage on the Filecoin network.
These expansions position USDFC as a versatile financial tool for Filecoin and the broader crypto space.
Why we focus on FIL single collateral for stablecoins
Our initial focus is on FIL as collateral for USDFC. A single asset approach maintains market stability and liquidity. That being said, we recognize the importance of ecosystem partners such as GLIF's iFIL and other liquidity collateral tokens. While these tokens are not included in the stablecoin system, they are welcomed in our lending market, allowing users to borrow USDFC with them.
Building trust through historical precedent
Historically, single-asset-backed financial instruments have stabilized markets and helped commodities and currencies mature. From gold-backed loans to oil financing, these instruments enable participants to raise funds while retaining ownership of their assets. USDFC seeks to follow this model, providing liquidity and stability in the Filecoin ecosystem and establishing a security framework for users.
Risk Management
We recognize the risks of single-asset collateral. To address these risks, USDFC uses overcollateralization and stability pools for advanced liquidity hedging, drawing on proven techniques from traditional finance and successful stablecoin projects. By ensuring sufficient collateral support, we aim to provide reliable and secure stablecoins that minimize risks for users across the ecosystem. We will continue to upgrade the system after TestNet.
in conclusion
At Secured Finance, USDFC represents more than just a stablecoin, it is a powerful tool for financial flexibility and ecosystem growth. USDFC aims to enhance liquidity, unlock new opportunities for Filecoin, and create a reliable capital flow system to empower users. With a roadmap that includes cross-chain swaps, real-world payment integration, yield generation, and collateral trading, USDFC will become an important asset in the DeFi space. Now is the time to launch a stablecoin backed by Filecoin. Join us to shape a new era of financial possibilities for Filecoin and beyond.
