This post was written by Neil on Aug 22, 2022

Flare Improvement Proposal 01 (FIP01) | Flare Network

The proposal has been created to help maximize utility for the active network participants within the growing Flare community.

Key Points;

The current airdrop distribution model and network inflation rates were designed for a single community with a single utility.

For Flare to fulfill its potential as a utility partner & connector for multiple blockchains and meet longer-term scaling objectives thereby, the tokenomics should benefit newcomers to the ecosystem in equal measure to the current XRP ‘flaredrop’ recipients.

To this end, FIP01 will:

1./ Tie airdrop-earning benefits to the token itself (rather than the addresses collected in the snapshot).

~ Mitigates exchange distribution risk.

~ Empowers newcoming $FLR token holders to participate as FTSO delegators, earn rewards and access remaining airdrop distribution.

2./ Gradually lower yearly current inflation scheme to 5% available supply over the first 3 years. Cut the total supply increase to maximum 5bn tokens in any year.

~ Provides more sustainable network growth rates vs previous 10% increase of fully-diluted supply per year.

3./ Increase any token-holding individual’s percentage ownership of total available supply for community delegation rates below 60% (average blockchain staking rates are ~42%).

~ Aligns network ownership incentives.

4./ Enable tax deferment in some jurisdictions.

~ Provides ecosystem participants with flexibility.

The Flare Improvement Proposal 01 (FIP 01) can be read in full here.