How it works

The Infinity Pool is the first pool built on the GLIF Pools protocol - it’s an autonomous leasing pool for Filecoin with standard rules for every SP on the network. The #1 priority of the Infinity Pool is the safety of stakers - the pool aims to avoid any loss of funds at the cost of potentially lower rewards.

All Storage Providers on the network are treated the same by the Infinity Pool - as long as they pass the risk criteria checks, they can borrow from the Pool. The GLIF team does not manually conduct diligence off-chain - instead, it uses conservative economic policies to mathematically minize the Pool's risk-of-loss.

Risk averse borrowing limits

The Infinity Pool intends to create simple criteria that are easy for everyone to understand:

1. Over-collateralized - A Storage Provider can borrow up to the amount of FIL they bring to the protocol. See the Storage Provider Equity section for more details.

2. Sustainable - A Storage Provider must be able to afford its weekly fee payments with its block rewards. A Storage Provider who is not earning enough to meet its payments will not be able to borrow - see Storage Provider earnings section for more details.

If you're a Storage Provider that meets these two criteria, you can borrow from the Pool.

Perpetual borrowing

The Infinity Pool does not enforce a due date on the FIL it deploys to Storage Providers in the system. Storage Providers are free to borrow as long as they need the FIL. The reason behind this design choice is that perpetual staking provides the most productive and efficient for the network as a whole. Storage Providers do not need to worry about having enough FIL to renew and extend their sectors, which keeps power online and the network growing at a faster speed.

Unique exit mechanisms tailored to the Filecoin ecosystem that work with this perpetual leasing model are described in the Exits section.

Liquidations

Any risk mitigating DeFi protocol that issues crypto assets to a borrower requires a process to recoup funds in the event of negligence or malicious rule breaking. The Infinity Pool protects stakers by enforcing two strict rules on borrowers:

1. Storage Providers must not miss 3 consecutive weeks of payments

2. Storage Providers must not incur 3 consecutive days of faulty sectors (that incur slashing)

If either of these two rules are broken, the Storage Provider is subject to a liquidation - where GLIF will aim to recoup as much FIL as it possibly can be terminating the sectors of the Storage Providers miners. This is a destructive actions for both the Storage Provider - who will likely lose all of their FIL - and the network as a whole, which incurs data loss as a result of sector terminations. However, this is a necessary enforcement mechanism to ensure the safety of stakers and maintain a theoretical 0 risk of loss.