Behind the Appreciation of Flare Token: Reinvestment in the Ecosystem and Long-term Development Strategy

Recently, the native Token of Layer1 blockchain Flare, FLR, has seen a continuous price increase, with a rise of over 100% in one month. On February 23, Flare announced an updated Token economics plan, revealing that new agreements had been reached with some early supporters. These supporters voluntarily extended the Token vesting period from 2024 to the first quarter of 2026 and agreed to limit the Token sales to no more than 0.5% of the average daily trading volume over 30 days.

To promote the sustainable development of the ecosystem and provide additional incentives for builders, supporters pledge to reinvest at least 50% of the Token sale proceeds into the Flare ecosystem projects over the next two years. Based on current market valuation, this could bring potential reinvestment of up to $47 million to the ecosystem. This initiative is expected to reduce the excess liquidity of FLR, increase capital inflow into Flare DeFi protocols, and inject new investment momentum into ecosystem projects.

Flare Latest Token Economics

The Flare project initially completed an airdrop snapshot for Ripple holders in December 2020. As the project scaled, Flare gradually transformed into a decentralized data acquisition optimization smart contract platform, aiming to meet the data application needs of most blockchains. In November 2022, Flare released a new Token economics plan and FIP.01 (Flare Improvement Proposal), and set the Token distribution date.

According to the FIP.01 proposal, the initial distribution method of FLR remains unchanged, with a total of 28,524,921,372 tokens. Of this, 15% (4,278,738,206 tokens) will be immediately distributed to airdrop recipients, while the remaining 85% will be distributed in the form of FlareDrop over 36 months.

In the latest agreement, early investors have agreed to the following key terms:

1. Extend the Token vesting period: Investors will receive 2,107,867,284.31 FLR, of which 813,870,745.01 will be distributed in February. The vesting period is extended from 2024 to the first quarter of 2026.

2. FLR Sales Restrictions: Commit to controlling the FLR sales volume within 0.5% of the average daily trading volume over 30 days.

3. Ecosystem Reinvestment: By January 2026, investors commit to reinvesting at least 50% of the FLR sale proceeds back into the Flare ecosystem.

4. Accountability Mechanism: Investors agree to undergo comprehensive procedural supervision to ensure the fulfillment of commitments.

These measures have reduced the initial allocation for early investors by 68%, while significantly extending the vesting period. In addition, 50% of the proceeds from any Token sale will be used to support various Flare ecosystem projects, including lending protocols, decentralized exchanges, automated market maker protocols, synthetic assets, cross-chain bridges, and native stablecoin minting.

It is noteworthy that this plan is based on the announcement made in October 2023, when another group of supporters agreed to burn approximately 2.1 billion FLR. Currently, all Flare supporters will receive a total of 3,100,8111,195 FLR, slightly above 3% of the initial total supply.

These measures not only help stabilize Token prices and enhance market transparency but also strengthen community confidence, encouraging users to participate in the ecological network for the long term, thereby supporting the project's long-term development.

Continuous Expansion of Flare Network's Functionality and Usability

Flare is committed to becoming an EVM smart contract platform that supports the next generation of decentralized applications. Currently, the Flare ecosystem has over 150 partners and developers, covering multiple fields such as NFTs, DeFi, and the metaverse.

In 2023, Flare experienced several significant milestones, including token distribution, listing on major exchanges, and the approval of the FIP.01 proposal. Currently, Flare has 435,000 wallets, with more than 10,000 active users and over 5 million token holders. 3 billion FLR are staked to 82 validators, with 76% of the FLR supply being wrapped, delegated, or staked, actively participating in the ecosystem.

In 2024, Flare plans to launch all scheduled protocols and further expand network functionalities. The main plans include:

1. Time Series Oracle (FTSO) expansion, supporting 1000 price and data series.

2. The launch of the Flare data connector allows smart contracts to access external data sources.

3. Testing and launch of the interoperability application FAssets.

4. The implementation of the bridging protocol LayerCake opens up value channels with other smart contract systems.

Flare's technical foundation includes the system protocol FSP, FAsset functionality, the decentralized oracle FTSO, and the cross-chain bridge LayerCake, all of which lay the groundwork for its success. As a Layer 1 public chain providing multi-chain solutions, Flare is moving in the right direction, and its ecosystem is expected to continue building and innovating, with a promising future ahead.