Flare Tokenomics Update, Early Supporters Extend Vesting Period

Recently, the native Token FLR of the Layer1 blockchain Flare has seen a significant price increase, with a rise of over 100% in the past month. On February 23, Flare announced an updated tokenomics plan and revealed new agreements with some early supporters, including Kenetic and Aves Lair. These supporters voluntarily extended their vesting period from 2024 to the first quarter of 2026 and agreed to limit the amount of Tokens sold to 0.5% of the average daily trading volume over 30 days.

To promote the sustainable development of the ecosystem and provide more incentives for developers, these early supporters also committed to reinvesting at least 50% of the token sale proceeds back into Flare ecosystem projects over the next two years. At the current market valuation, this could bring up to $47 million in potential reinvestment to the Flare ecosystem. This initiative is expected to reduce the excess liquidity of FLR, increase capital inflow into Flare DeFi protocols, and inject new funds into ecosystem projects.

The Evolution of Flare Tokenomics

The Flare project initially completed an airdrop snapshot for Ripple holders in December 2020. As the project expanded, Flare gradually transformed into a decentralized data acquisition optimized smart contract platform aimed at meeting the data application needs of most blockchains. In November 2022, Flare launched a new tokenomics proposal and FIP.01 (Flare Improvement Proposal), and established the token distribution date.

The FIP.01 proposal aims to reduce the token inflation rate and increase incentives for network contributors. According to the proposal, the public issuance of 28,524,921,372 FLR is divided into two parts: 15% is distributed immediately to airdrop recipients, and the remaining 85% is distributed in the form of FlareDrop over 36 months.

The latest tokenomics update includes the following key points:

1. Extend the token vesting period: Early investors will receive 2,107,867,284.31 FLR, of which 813,870,745.01 FLR will be distributed in February. The vesting period is extended from 2024 to the first quarter of 2026.

2. FLR selling restriction: Investors commit to limiting the amount of FLR sold to within 0.5% of the daily trading volume (based on the average trading volume of the past 30 days).

3. Ecosystem Reinvestment: By January 2026, 50% of all profits gained from the sale of FLR by investors will be reinvested into the Flare ecosystem to support the development of various projects.

4. Accountability Mechanism: Investors agree to undergo comprehensive procedural supervision to ensure the fulfillment of commitments.

These measures have reduced the initial allocation for early investors by 68%, and the vesting period has also been significantly extended. This demonstrates the founding team's commitment to aligning with community interests and supporting the development of the Flare network in a responsible manner.

The reinvestment plan will support various Flare ecosystem projects, including lending protocols, decentralized exchanges, automated market maker protocols, synthetic assets, cross-chain bridges, and native stablecoin minting.

In addition, another batch of supporters had previously agreed to destroy approximately 2.1 billion FLR. As of now, about 400 million have been destroyed, and in the future, 66 million will continue to be destroyed each month until January 2026. Currently, all Flare supporters will receive a total of 3,100,8111,195 FLR, slightly above 3% of the initial total supply of FLR.

These measures not only help stabilize Token prices and improve market transparency but also enhance community confidence in the project, encourage users to participate in the ecological network for the long term, and promote the long-term development of the project.

Continuous Expansion of Flare Network's Functionality and Usability

Flare is committed to becoming an EVM smart contract platform that supports the next generation of decentralized applications, particularly in areas such as RWA tokenization and machine learning/AI. Currently, the Flare ecosystem has over 150 partners and developers, covering multiple fields including NFT, DeFi, and the metaverse.

In 2023, Flare experienced important milestones such as token distribution, listings on major exchanges, and the approval of FIP.01. Currently, Flare has 435,000 wallets, over 10,000 active users, and more than 5 million token holders. 3 billion FLR have been staked to 82 validators, with 76% of the FLR supply being wrapped, delegated, or staked, actively participating in the ecosystem.

In 2024, Flare plans to launch several important protocols and expand network functionality:

1. The Time Series Oracle (FTSO) expansion will support 1000 price and data series.

2. The Flare data connector will allow smart contracts to access data from external sources and pass it to other chains.

3. The interoperability application FAssets is currently undergoing private testing on Coston, and will be launched on Songbird afterwards, eventually going live on the mainnet.

4. The bridging protocol LayerCake will open the door for Flare to other smart contract systems.

The technical foundation of Flare includes the system protocol FSP, FAsset functionality, decentralized oracle FTSO, and cross-chain bridge LayerCake, all of which lay the groundwork for the project's success. As a Layer 1 public chain providing multi-chain solutions, Flare is expected to continue innovating and developing in the future, as the community foundation progresses in the right direction and early supporters increase their investments in the ecosystem.