The blockchain for data, Flare, has recently made a groundbreaking announcement, revealing its plans to burn 2.1 billion FLR tokens as part of a strategic move to support ecosystem health. This significant development in the world of blockchain represents a crucial step in safeguarding the interests of the Flare community and enhancing incentives for new users to participate in the network.
The removal of such a substantial number of tokens from circulation will not only prevent the dilution of community token holdings but also create a more attractive environment for potential new users. The tokens earmarked for burning had previously been allocated to Flare’s early backers. Following extensive discussions, Flare reached an agreement with these entities regarding the allocation of tokens in response to Flare Improvement Proposal 01 (FIP.01).
Hugo Philion, the CEO and Co-Founder of Flare, expressed his satisfaction with the resolution: “We are very happy to have reached an agreement with our shareholders and thank them for their support. It is right that investor token allocations should also be affected by the changes implemented in FIP.01. Without this burn, the investors would be able to claim approximately 3x their original allocation through the FlareDrops, unfairly diluting community holdings.”
Flare Sets the Standard
The burn process will involve an immediate removal of 198,880,170.19 FLR tokens, with an additional 66,293,390.06 FLR tokens to be burned monthly until January 2026, effectively concluding the FlareDrop process. Consequently, the early backers will receive only a fraction of their original allocation, which was distributed earlier this week.
The 2.1 billion tokens scheduled for burning account for nearly 40% of the initial token allocation for investors. This strategic move is expected to reduce competition for FlareDrops and minimize dilution for all participants within the ecosystem. To accommodate these changes, Flare’s network tokenomics will be updated. The community allocation, which currently stands at 58.3%, will rise to 59.6% after the burn.
FIP.01, the Flare Improvement Proposal responsible for these changes, received an overwhelming 94% approval from the Flare community in January. The proposal was designed with the intention of broadening access to token distribution and encouraging greater network participation from various connected communities. Subsequent to the approval of FIP.01, the 24.2 billion tokens allocated to public token distribution have been made available through 36 monthly FlareDrops spanning three years. With seven FlareDrops already completed, the eighth is scheduled for claiming on October 13.
Flare, often described as the blockchain for data, operates as an Ethereum Virtual Machine (EVM) smart contract platform. It is unique in its ability to expand the utility of blockchain through the integration of decentralized oracles into the network’s structure. Flare’s capabilities encompass providing trustless access to a wide array of data types, including price and time series data, blockchain event and state data, and Web2 API data.
By delivering these possibilities and functionalities at a minimal cost and on a massive scale, Flare serves as a utility layer for the blockchain industry, fostering the development of new and improved use cases. And now, Flare’s decision to burn more than 2% of FLR’s total supply is set to have a profound impact on the overall cryptocurrency ecosystem.
This decision from Flare reflects the platform’s commitment and dedication to the long-term health and sustainability of its ecosystem, while also ensuring equitable and broad distribution of tokens among the Flare community members. This bold move stands as a testament to Flare’s commitment to its mission of growth and innovation in the ever-evolving blockchain landscape.
