This post was written by Neil on Nov 20, 2023
Flare, the blockchain platform dedicated to data, has made a significant announcement regarding its token ecosystem. In a move aimed at ensuring the health and sustainability of its ecosystem, Flare has decided to initiate a token burn, removing a substantial portion of its native FLR tokens from circulation.
A total of 2.1 billion FLR tokens, representing over 2% of the entire FLR token supply, are scheduled to be permanently removed through this burn. This strategic decision serves multiple purposes, including safeguarding the holdings of the community, as well as creating stronger incentives for new participants to engage with the Flare network.
The tokens designated for burning were originally allocated to early supporters and backers of Flare. As part of an agreement reached between Flare and these early stakeholders, these tokens will no longer be distributed. This arrangement stems from the implementation of the Flare Improvement Proposal, FIP.01, which has influenced the redistribution of tokens to equity shareholders.
The token burn will occur in stages, with 198,880,170.19 FLR tokens being immediately (burned 10/11/2023) removed from circulation. Subsequently, an additional 66,293,390.06 FLR tokens will be burned monthly until January 2026, effectively concluding the FlareDrop process. As a result of this gradual burn, backers will receive a reduced portion of their original token allocation, with the remaining tokens having been allocated earlier this week.
In response to these changes, Flare will adjust its network tokenomics to reflect the evolving landscape, with the community allocation increasing from 58.3% to 59.6%.
FIP.01, a proposal approved by the Flare community in January with a remarkable 94% in favor, is designed to enhance access to token distribution and promote greater participation within the network’s connected communities.
In light of FIP.01’s ratification, the 24.2 billion tokens initially allocated for public token distribution are now being shared among all Wrapped FLR holders through 36 monthly FlareDrops spanning a three-year period. Nine FlareDrops have already taken place, with the tenth installment available for claiming on December 12.