Risk

What happens if a Storage Provider fails to meet their obligations?

If a Storage Provider (SP) starts getting slashed on the Filecoin network and begins to decrease in its liquidation value, GLIF may have to liquidate the SP to recoup the FIL. The GLIF protocol ensures that an SP cannot borrow more FIL than 75% of their liquidation value. You can read more about the rules here.

What are the borrowing eligibility criteria for Storage Providers?

To be eligible for borrowing, SP must have sufficient FIL to provide as collateral on one or more Filecoin Miner Actors. You can get an estimate, or read more about the rules here.

How does collateralization work in GLIF?

GLIF constantly monitors the liquidation value of every SP in the network. If the SP’s borrowed FIL reaches 75% of their liquidation value, the Storage Providers get cut off from borrowing more FIL. At 85%, the Storage Provider is at risk of liquidation. You can read more about the rules here.

Is my FIL safe in the event of market fluctuations?

Yes - market fluctuations do not impact your FIL on GLIF.

Market fluctuations generally refer to price volatility within capital markets - for instance, if the price of FIL suddenly jumps in USD terms. GLIF earns FIL-on-FIL rewards for LPs, so the price of FIL relative to other crypto assets is irrelevant in the context of GLIF.