This post was written by Neil on Aug 22, 2022
The proposal has been created to help maximize utility for the active network participants within the growing Flare community.
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.