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      Filecoin Set to Reduce Token Issuance by 75% as Vesting Schedule Ends

      Filecoin is approaching a significant change in its token supply dynamics as the six-year vesting schedule for Protocol Labs and the Filecoin Foundation is set to conclude on October 15, 2026. This event will result in a reduction of new FIL token issuance by approximately 75%, dropping annual supply from around 89 million FIL to between 21 and 22 million FIL, primarily sourced from block rewards.

      When Filecoin launched in October 2020, it allocated 400 million FIL to insiders, with Protocol Labs receiving 300 million FIL and the Filecoin Foundation receiving 100 million FIL. The vesting schedule allowed for a gradual release of these tokens, but with its end, the only new FIL entering circulation will come from block rewards under the network's dual minting model. This model includes a fixed decay schedule and a component linked to network storage growth targets.

      As the supply of FIL decreases, the net supply could potentially flatten or even contract. Filecoin has mechanisms in place that remove tokens from circulation, such as burning fees and requiring storage providers to lock FIL as collateral. Simulations suggest that net FIL growth could decline significantly by the end of 2027, potentially leading to a situation where more FIL is removed from circulation than is created through block rewards.

      In anticipation of the supply cut, FIL prices have already seen an increase of 10% to 24%. The demand for Filecoin's services is also expected to grow, with new products like Filecoin Onchain Cloud projected to significantly increase annualized payments. The upcoming changes present a critical test for Filecoin and other cryptocurrencies with similar vesting structures, as market participants will closely monitor usage, collateral locking, and fee burns in the coming years.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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