Tokenomics#

Flare’s token economics support Flare’s ambition to connect the decentralized economy and drive broader adoption of web3. These tokenomics help to create a more balanced playing field where multiple connected ecosystems have an incentive to grow and participate with Flare. The adoption of FIP.01 on January 27, 2023 enabled this approach by changing the mechanism of the public token distribution.

Token Allocation#

At network genesis, 100 billion $FLR tokens (100,000,000,000) were created.

These tokens have been allocated to the following groups. Note the delegation, claiming, and voting abilities of each, defined here:

• Can delegate: The entity can delegate tokens to the Flare Time Series Oracle to earn standard inflationary rewards.
• Can claim: The entity can wrap tokens to claim a portion of the FlareDrop.
• Can vote: The entity can use its tokens to participate in governance by voting on Flare Improvement Proposals.

Flare Partners#

Flare Community#

Team, Advisors, and Backers#

Conditions for Early Backers#

The early backers of the project that received 3.1 billion $FLR tokens are divided in two groups:

• Group 1: Received 1,066,111,520 $FLR tokens.

  This group of investors was originally appointed to receive an additional 2,121,388,480 $FLR tokens but agreed to have them burned according to the following schedule:

  • 198,880,170.19 $FLR were burned in November 2023.
  • 66,293,390.06 $FLR are set to be burned monthly until March 2026.

• Group 2: Received 2,034,699,676 $FLR tokens and agreed to the following special conditions:

  • Extended Token Vesting: 829,619,860 $FLR was distributed in February 2024. This investor group voluntarily extended distribution from 2024 to Q1 2026, easing market pressure and encouraging long-term network participation and alignment.
  • FLR Selling Limit: This investor group committed to binding sales restrictions of FLR sales to no more than 0.5% daily volume (based on historical 30-day volume), providing clarity and reducing market volatility.
  • FLR Ecosystem Reinvestment: 50% of all investors' proceeds from FLR sold through January 2026 will be reinvested in the Flare ecosystem across applications, DeFi, TVL and liquidity-provision, bolstering the most critical value accrual mechanisms.
  • Accountability: This investor group agreed to full programmatic monitoring and accountability for binding adherence to the mission and commitments.

Inflation Amount#

High-Level View#

The majority of tokens are destined for community ownership, whether by direct token distribution, network incentives, or through the Flare Foundation ecosystem programs.

Token Description#

$FLR is the transactional token for the Flare network.

Flare Token Utility#

Flare is an EVM-based Layer 1 that gives developers decentralized access to data from other chains and the internet. This access enables new use cases and monetization models, while allowing apps to serve multiple chains through a single deployment.

$FLR is the network token and provides support for each of these functions:

• Staking to validator nodes to provide network security through proof of stake consensus.
• Incentivized delegation to the Flare Time Series Oracle (FTSO) to support the provision of reliable decentralized data.
• Collateral within decentralized applications built on Flare blockchains (cross-chain or solely native).
• Participation within network governance.
• Transaction fees to prevent spam attacks.

Public Distribution#

Here are important highlights of the public token distribution, updated following approval of Flare Improvement Proposal 01 (FIP.01). The full details are available in the FIP.01 blog post.

The 28,524,921,372 $FLR public distribution is split into two parts:

• The first 15%, the initial Airdrop, which equates to 4,278,738,206 $FLR, was distributed during the Token Distribution Event (TDE) on January 9, 2023 to wallets that held XRP on December 12, 2020.
• The remaining 85% or 24,246,183,166 $FLR, the FlareDrop, are being distributed over 36 monthly amounts directly to token holders who have wrapped their $FLR into $WFLR. There will be 35 monthly distributions of 2.37% of the total distribution (676,040,637 $FLR) and a final distribution of the remaining 2.05% of the total distribution (584,760,871 $FLR) in month 36.

Inflation Calculation#

Annual inflation is calculated based on circulating supply and changes as the first 3 years progress:

• 10% in year 1.
• 7% in year 2.
• 5% from year 3 onwards.

Vesting Detail#

Vesting occurs when the full rights to an asset are gradually acquired over a pre-determined schedule. One cannot exercise any of the rights to each portion of the asset until its agreed-upon vesting date, thus incentivizing participation and strengthening the community. Additionally, the future right to an asset cannot be taken away unless stipulated in the vesting agreement, such as the requirement for employee status on a vesting date.

Flare tokens are subject to vesting schedules as follows.

Supply Metrics#

Details about the following metrics are given next:

• Initial Supply: 15B $FLR, as specified in FIP.01.
• Distributed Supply: Initial supply + FlareDrop distribution. 100B $FLR.
• Total Supply: Distributed supply + inflation.
• Circulating Supply: Unlocked distributed tokens. Tokens provided through the initial token distribution event, FTSO delegation rewards, and FlareDrops and vesting schedules.
• Liquid Supply: Sellable. Circulating Supply at liberty to be sold.

Example: The Flare team can't sell their tokens immediately, but they can use them to earn FTSO rewards. Their tokens are circulating, but not liquid.

Month 0 $FLR#

Circulating $FLR#

The recipients of the initial token distribution (Airdrop) are the largest single group of token holders. These tokens are available for network participation.

Please note that the Flare Foundation and Flare Labs amounts also include the unlocked backers’ tokens because this is before their distribution commences in month 6.

Liquid $FLR#

Although Flare team members can use their initial token distribution to participate fully in the network and support reliable FTSO data provision, they are restricted from selling any of the tokens they receive in the first 6 months, and no more than 25% within the first 18 months.

The FF & FL percentages include the unlocked but as yet undistributed backers’ tokens.

Total $FLR#

80.2% of the total distributed supply (100B) is permitted to vote in governance, leaving 19.8% that is not permitted to vote (Flare Foundation & Flare VC Fund).

36-Month $FLR#

Circulating and Liquid $FLR#

Once the 36-month token distribution is complete, there will be 93.9B $FLR liquid and circulating.

Distribution Schedule#

After the initial 15% distribution, the majority of entities receive the remainder of their allocation smoothly over 36 months. The tokens are available for network participation, including governance and delegation to FTSO, but they are not liquid.

The slight bumps are due to the delayed distribution of backer tokens commencing in months 6 and 13.

Liquid Supply#

Due to the restrictions placed on team token sales described in the Liquid $FLR section above, until month 19 there are fewer liquid tokens than there are tokens able to participate in governance and delegate to the FTSO.

Circulating Supply#

After 36 months, 85% of $FLR will be circulating (93.9B of a total 110.1B $FLR).