Filecoin [FIL] makes a stunning comeback in 2023, is this the reason?

At the time of writing, FIL jumped 25% over the previous day.
Filecoin’s daily cumulative revenue over the last 180 days was second only to Ethereum.

After facing considerable stress for most parts of 2022, Filecoin’s [FIL] bullish rally made impressive gains since the beginning of 2023. The coin surged 25% over the previous day at press time, data from CoinMarketCap showed.

Filecoin announced that it will launch smart contracts in Mar’23, making it a fully-fledged L1. FIL rose by 23% in 24 hours. There are currently 3,785 active miners on the Filecoin network, storing 18.767 EiB of information, and staking 134,023,969 FIL.

— Wu Blockchain (@WuBlockchain) February 17, 2023

How much are 1,10,100 FILs worth today?

A possible reason for the continued increase could be the excitement behind the soon-to-be launched smart contracts on the network, as pointed out by Wu Blockchain above. Moreover, the introduction of smart contracts could drive mainstream adoption for the Filecoin network, which specializes in data storage.

Big upgrade beckons Filecoin community

The launch of Filecoin Virtual Machine [FVM] on the mainnet is expected to bring smart contracts and user programmability to the Filecoin blockchain. Prior to the release, FIL would organize a one-day event called The Countdown to FVM, which will feature exclusive FVM content and a builders showcase.

However, the buzz has not permeated through other network parameters. The transaction fees dipped sharply over the last week, which could discourage new validators from entering the network, Token Terminal pointed out.

On the other hand, revenue for FIL holders plummeted by 67% after hitting a monthly high on 7 February. The network traffic also left a lot to be desired.

Source: Token Terminal

Despite the drop over the past few days, Filecoin’s daily cumulative revenue over the last six months stood at $11.9 million, second only to Ethereum [ETH].

Source: Token Terminal

Investors’ sentiment turns favorable

Filecoin recorded excellent growth on its DeFi front as well, with the total value locked (TVL) skyrocketing to its all-time high on 15 February, per data from DeFiLlama. This growth was powered by decentralized mining platform Filet.

Source: DeFiLlama

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

According to Santiment, FIL seemed to have got a thumbs-up from investors, as evidenced by the positive weighted sentiment for the token. The Binance Funding Rate was positive, indicating that there was a significant demand in the derivatives market, which could push the price further.

However, the slight drop in development activity might be a cause of worry as the Filecoin community eagerly awaited releases of proposed enhancements.