Flare to Burn 2.1 Billion FLR Tokens to Support Ecosystem Health
Flare, a Layer 1 Oracle network, has announced its plans to burn 2.1 billion FLR tokens, which represents nearly 40% of the original token allocation for investors. The aim of this token burn is to maintain the health of the ecosystem and prevent dilution of community token holdings while incentivizing new users to join.
FLR Token Burn Details
The tokens set for burning were originally intended for Flare’s early supporters. However, an agreement was reached between Flare and these entities regarding the impact of the first Flare Improvement Proposal (FIP.01) on token allocations. As a result, these tokens will no longer be distributed.
A total of 198,880,170.19 FLR tokens will be burned immediately, with an additional 66,293,390.06 to be burned monthly until January 2026 when the FlareDrop process concludes. This multi-year burn schedule means that backers will receive a reduced portion of their initial allocation.
Flare CEO and co-founder Hugo Philion expressed his satisfaction with the agreement, stating that it ensures investor token allocations are affected by the changes implemented in FIP.01. Without the burn, investors would have been able to claim approximately three times their original allocation through FlareDrops, which would have unfairly diluted community holdings.
Impact on FLR Price
Following the announcement, FLR experienced a modest increase of nearly 3% in price over the past day, bringing it to $0.0092.
New Method for FlareDrop Distribution
In January, Flare initiated an airdrop of FLR tokens across major exchanges. However, after distributing 15% of the tokens, it was decided that the remaining 85% would be shared among all holders of wrapped FLR. This decision was made following the approval of FIP.01, which received a high approval rate of 94% from the Flare community. The goal of this proposal is to increase access to token distribution and promote greater network participation from connected communities.
Hot Take: Flare’s Token Burn Supports Ecosystem Health
Flare’s decision to burn 2.1 billion FLR tokens demonstrates its commitment to maintaining the health and integrity of its ecosystem. By preventing dilution of community token holdings and incentivizing new users, Flare aims to create a sustainable and thriving network. This move also ensures that investor token allocations are adjusted in line with changes implemented through FIP.01, promoting fairness and preventing undue advantage for investors. The modest price increase following the announcement reflects market confidence in Flare’s proactive approach to ecosystem management.
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