The vision behind NFT.Storage's endowment model

NFT.Storage aims for sustainable, trustless NFT preservation via Filecoin and innovative funding
Elizabeth Griffiths
April 5, 2024

In the dynamic landscape of NFTs, NFT.Storage is dedicated to sustainable, long-term preservation for all NFT data. Our goal is to safeguard NFTs for future generations, aiming to ensure they remain a vibrant part of our digital legacy. We're advancing towards this future with our innovative endowment model, which we plan to transition onto the Filecoin Network, specifically the Filecoin Ethereum Virtual Machine (FEVM), reinforcing our commitment to decentralization. This approach is foundational to creating a future where NFTs are not just preserved but are accessible and verifiable in a system that's trustless and transparent.

Aiming for sustainable NFT preservation

In line with our commitment to being a public good, we've implemented a minimal one-time fee model for data storage to ensure our services remain accessible to everyone. This approach underpins our strategy for a sustainable NFT preservation solution. The fee contributes to an on-chain endowment, which is intended to cover future storage provider costs on the Filecoin network. As we progress toward realizing this model, we strive for the possibility of long-term storage, maintaining transparency about our journey towards a fully trustless system.

Trustless ecosystem through FEVM and advanced storage mechanics

The Filecoin Ethereum Virtual Machine (FEVM) is central to our strategy, which opens the door to deploy smart contracts not only for endowment management and payment automation but also for comprehensive data management. This step towards a trustless operation reduces the reliance on intermediaries and boosts transparency. With the implementation of RaaS (Replication, Renewal, and Automatic Repair) already live, our system is setting the stage for further automating the processes of storage, renewal, and repair of NFT data via smart contracts.

Replication, Renewal, and Automatic Repair (RaaS)

Currently operational, RaaS aims to ensure the persistence of NFT data by replicating it across multiple providers within the Filecoin network, automatically renewing storage contracts, and swiftly repairing any data loss. This infrastructure is vital for maintaining the robustness of our decentralized storage solution, ensuring the integrity and durability of stored NFT data.

Proofs of Spacetime Integrity (PoSt)

PoSt plays a critical role by verifying that storage providers meet their obligations, providing an ongoing audit of storage fidelity. This continuous validation process assures the safety and integrity of NFT data stored on the Filecoin network, maintaining trust in our storage solutions.

Decentralizing the payment and maintenance cycle

Our vision is to evolve the payment and maintenance cycle to become fully trustless, leveraging the FEVM for tasks such as contract renewals and endowment management. While today's operations involve conventional, trusted payment methods, our future aims to  accept ERC20 tokens and move towards entirely trustless payments, further decentralizing and enhancing the resilience of our NFT storage ecosystem.

The Mathematics of Sustainability

As part of our commitment to sustainable NFT preservation, we've instituted a disciplined financial strategy aimed at ensuring the durability of our endowment. Each month, we evaluate the volume of data entrusted to our care and seek to allocate sufficient funds to cover 20 years of storage provider fees, based on current rates. This proactive approach establishes a foundation for financial stability, allowing us to adjust our fee structure in response to long term storage needs, Filecoin storage costs, and the value of FIL, the Filecoin network ERC-20 token. Such adjustments are made with the overarching goal of maintaining the endowment's growth trajectory, closely aligning with our operational needs.

Our investment philosophy for the endowment is conservative yet strategic, initially modeled on a return of 5.33%, equal to the US Fed Rate as of the publishing of this article. Over time, we plan to diversify our investment of the endowment, incorporating a blend of stablecoins, select ERC-20 tokens, and a strategy to mitigate risk and capitalize on growth opportunities.

While the current cadence for funding the endowment is monthly, we anticipate increasing this frequency to better reflect real-time storage needs and market conditions. The transition of the endowment management to a fully on-chain system is a pivotal step towards NFT longevity. This evolution underscores our dedication to transparency, accountability, and the leveraging of blockchain technology to secure the future of digital art and assets.

Moving Forward Together

Embracing the challenges of sustainable NFT preservation, NFT.Storage is devoted to innovation and fostering a community-driven approach. As we advance towards a more decentralized storage ecosystem, we invite the NFT community to join us. Together, we're working towards a future where every NFT is preserved as a timeless asset.