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Rewards & iFIL
When Storage Providers borrow FIL, they are required to make a weekly payment back to the pool. These weekly payments are accounted as earnings for FIL Stakers. Stakers earn rewards by holding the iFIL liquid staking token.
iFIL is GLIF's liquid staking token. When you stake FIL, you get back iFIL.
iFIL can be thought of like a redemption voucher for FIL from GLIF. It’s like when you leave your car off with a valet service — the valet service gives you a receipt of your drop-off, which you then turn back into receive your car. iFIL works similarly in the sense that the amount of iFIL you receive for your FIL stake into GLIF can later be used as a redemption ticket for the underlying staked FIL.
However, the amount of FIL that 1 iFIL is worth is not fixed — as Storage Providers pay their weekly fees, the total amount of FIL held by the Infinity Pool then increases, which in turn increases the amount of FIL you can redeem with a single iFIL token.
Weekly payments increase the price of iFIL
What does this mean for stakers? There are 3 important takeaways:
- 1.The amount of iFIL you should expect to receive for each FIL you deposit should decrease over time. This is due to the fact that 1 iFIL can be redeemed for more FIL tokens as time goes on (and payments are made), so it becomes more expensive to mint 1 iFIL.
- 2.The amount of FIL you should expect to receive for your iFIL should increase over time. This is due to the same fact that the Pool is constantly earning rewards!
- 3.If the Pool were ever to lose money, the Pool’s underlying FIL would decrease, meaning the amount of FIL you can redeem for 1 iFIL token decreases.