Market Actor

The Market Actor is a core network component that manages the storage and retrieval deals between clients (service gateways) and storage providers (miners). It is responsible for handling the economic aspects of these deals, including payments and collateral, and ensuring that both parties fulfill their obligations according to the terms of the agreements.

It is an abstracted entity, a pure software component implemented in Lotus client (or equivalent).

Key Functions of the Market Actor in Filecoin

Key Functions	Description
Facilitates Storage Deals	The Market Actor allows clients to propose storage deals by specifying the data size, storage duration, price, collateral requirements, and other terms. Storage providers can accept these deals if they agree with the terms. Once a deal is accepted, the Market Actor locks the necessary Filecoin tokens from the client (for payment) and the storage provider (as collateral) to secure the deal.
Manages Retrieval Deals	The Market Actor handles storage deals and retrieval deals. These deals specify the terms for retrieving stored data, including pricing and payment methods. Clients pay storage providers to retrieve the data they store, and the Market Actor facilitates these payments.
Ensures Deal Fulfillment	The Market Actor tracks the progress of each deal, ensuring that storage providers submit the required PoRep and PoSt to prove that they are indeed storing the data as agreed. If the storage provider fails to provide the necessary proofs, the Market Actor can penalize the provider by slashing their collateral, thus incentivizing storage providers to fulfill their commitments.
Handles Deal Payments and Collateral	When a deal is initiated, the Market Actor locks the client's funds and gradually releases payments to the storage provider based on the deal's progress. For retrieval deals, payments are typically made using a payment channel model. The Market Actor requires storage providers to stake collateral for each deal. The market Actor holds this collateral to incentivize proper behavior. The collateral is partially or fully forfeited if the provider fails to meet the terms.
Acts as an Arbitration Layer	In cases where there is a dispute between a client and a storage provider (such as if the data is unavailable or not stored correctly), the Market Actor can act as an arbitration layer to enforce penalties or rewards based on the evidence (proofs) submitted.
Supports Automated Deal Matching	The Market Actor allows for automated deal matching between clients and storage providers using the ask-and-bid model. Storage providers publish their "ask" prices (prices they are willing to accept), while clients submit "bids" (prices they are willing to pay). The Market Actor helps match these asks and bids, streamlining the process.
Maintains On-Chain Records of Deals	The Market Actor keeps an on-chain record of all storage and retrieval deals, including their terms, status, associated payments, and collateral. This provides transparency and accountability within the Filecoin network, ensuring that all parties have access to a verifiable record of agreements.
Facilitates Renewals and Extensions	The Market Actor can also handle deal renewals and extensions. When a deal nears its expiration, the client or storage provider can initiate a renewal or extension, subject to new terms or continued agreements.

Technical Overview

• Part of Filecoin’s Built-in Actors: The Market Actor is one of the built-in actors in Filecoin's protocol, defined within the Filecoin Specification and implemented in the Lotus client software (the primary implementation of the Filecoin protocol).

• Smart Contract-Like Functionality: While not a traditional smart contract, the Market Actor behaves like one, managing state and enforcing rules for deal management on the Filecoin blockchain.

• Interaction with Other Actors: The Market Actor interacts with other actors, such as the Storage Miner Actor (responsible for managing storage and mining operations), Power Actor (managing the storage power consensus) and Account Actors (representing users and their balances) to coordinate the proper flow of funds, collateral, and deal statuses.