• FIP0056 is a proposal aiming to address some of the broader challenges facing the Filecoin network. 
• At press time, Filecoin’s network performance seemed fine and FIL’s price action remained bullish. 

Filecoin [FIL] is about to make another major network upgrade if the proposal gets a ‘yes’ from the community. As per the announcement, Filecoin’s latest FIP0056 was in its last call until 24 March. 

FIP0056, a proposal aiming to better incentivize the long-term storage of network data, is in last call through Friday 03/24.

What this means 🧵https://t.co/wDovrM77iS

— Filecoin Foundation (@FilFoundation) March 22, 2023

Read Filecoin’s [FIL] Price Prediction 2023-24

To begin with, FIP0056 is a proposal aiming to address some of the broader challenges facing the Filecoin network. In addition to increasing the minimum and maximum sector durations from six months to one year and 1.5 years to 5 years, this proposal would also introduce a sector duration multiplier. 

With the launch of FVM, @fil_gov is looking ahead.

We're piloting a process of hybrid soft consensus that will ask Filecoin Core Devs to assess community feedback and drive consensus around FIP0056, the Sector Duration Multiplier proposal.https://t.co/mQLL9fAWMB

— Filecoin Foundation (@FilFoundation) March 23, 2023

Filecoin’s framework would be altered by FIP0056, which would add a 2x independent sector duration multiplier that would be multiplicative of the 10x quality multiplier incentive.

Additionally, the Filecoin community has also been testing a hybrid soft consensus approach to foster consensus as FIP0056 enters its final call phase.

A similar effort to make such changes was made earlier in 2021, but it did not translate into reality as the community rejected the proposal.

If FIP0056 is accepted, it is expected to be implemented in the v19 network upgrade, while if rejected, FIP will not be eligible for inclusion in any future network upgrades. 

While the developers worked on the proposal, FIL’s network health also remained in check. Token Terminal’s data revealed that Filecoin’s fees and revenue gained upward momentum since February, reflecting increased usage of the network.

The same growth was also seen in the network’s token, as its price increased, thanks to the current bullish market condition.

As per CoinMarketCap, FIL’s price was up by over 4.8% in the last 24 hours, and at the time of writing, it was trading at $5.96 with a market capitalization of $2.4 billion. 

Realistic or not, here’s FIL market cap in BTC‘s terms

Though the recent price action coincided with investor interest, a few metrics suggested that FIL may be in trouble. For instance, the token’s trading volume witnessed a decline despite a price hike, which was a negative signal.

FIL’s development activity also declined sharply. Nonetheless, FIL demand in the derivatives market increased, which was evident from its DyDx funding rate. Investors’ sentiment around the token also seemed to have improved.