Within a short timespan in 2017, Filecoin raised $52 million in an advisor pre-sale followed by a $153 million public offering through token sale platform CoinList. It raised these funds using a relatively new method known as a Simple Agreement for Future Tokens (SAFT). The SAFT is a legal agreement inspired by the Simple Agreement for Future Equity (SAFE), pioneered by Y Combinator. It gives accredited investors an allocation of tokens once the network is live in return for an upfront investment.

Of the $205 million raised, $52 million was sold to advisors at a rate of $0.75 per FIL token, with an additional discount of between 0% and 30%. Vesting for advisors ranged from one to three years. The remaining $153 million was raised from investors with FIL tokens priced based on a linearly increasing function. The starting price for the sale was $1.00 per FIL and increased up to $5.00 per FIL using the formula (price = $ amount raised / 40 million), with a hard cap of 200 million FIL sold. Investor tokens, from the advisor and token sale rounds, will vest on variable periods with a six-month minimum.

FIL has a max supply of two billion, of which 600 million were pre-allocated at genesis according to the following allocations (percentages based on max supply):

• 10.5% was allocated to Protocol Labs with a 6-year linear vesting
• 4.5% was allocated to Protocol Labs team member and contributors with a 6-year linear vesting
• 7.5% was allocated to 2017 SAFT investors with a 6-month to 3-year linear vesting
• 2.5% was allocated to future fundraising or ecosystem development
• 5% was allocated to the Filecoin Foundation with a 6-year linear vesting

The remaining 70% of the total supply is allocated to Filecoin miners and will be released over time to reward providing data storage service, maintaining the blockchain, distributing data, and running applications.

Filecoin is looking to provide an alternative to traditional online storage providers and protocols. Its technology acts as an incentive layer for the peer-to-peer file transfer system IPFS (InterPlanetary File System), which uses hash-addressed content structures to store data instead of centralized servers and IP addresses. This is intended to reduce redundancy, increase permanence, and improve efficiency.

Filecoin incentivizes IPFS by rewarding storage providers and retrievers for contributing resources to the system. The network also comes with built-in Ethereum integration allowing developers to access data on Ethereum’s blockchain and interact with its smart contracts.

Filecoin is being developed by Protocol Labs, a development firm founded in 2014 by Juan Benet. Benet and crew constructed Filecoin and IPFS in tandem, raising a few Seed equity rounds to fund the process. In 2017, the team hosted a token sale to secure funds for Filecoin's development, which raised around $205 million in one of the largest token offerings at the time.

Protocol Labs seeks to build a fundamental layer for data infrastructure that can be used by both blockchain and traditional providers, like Amazon Web Services (AWS) and Microsoft Azure. The project plans to achieve this goal by creating a marketplace in which any user who has storage capacity can connect to the network, creating a supply of unused storage both in consumer hardware as well as data centers of existing businesses. The Filecoin team believes this will reduce the price of storage in a way similar to how sharing economy companies like Airbnb reduced the price of short-term rentals in marketplaces traditionally dominated by large players with large capital requirements.