Flare Network To Burn 2% Of Total Supply To Avoid Dilution, Strengthen Ecosystem
By Benzinga
Data-focused blockchain platform Flare Network decided to burn a certain portion of its tokens.
The move is also meant to enhance ecosystem strength, and boost Flare's community equity and involvement.
Some 2.1 billion FLR tokens (about $20 million) marks almost 2% of the total supply and 40% of the original token allocation for investors.
Flare’s community allocation will increase from 58.3% to 59.6% with this step. The planned burned tokens have already been allocated to early Flare supporters and will not be distributed further.
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On an immediate basis, Flare will burn 198 million FLR while the remaining 66 million will be burnt monthly until January 2026 when the FlareDrop process is complete.
Why It Matters: The step will prevent any undue dilution of community token holdings and encourage new users to the network.
The token tranche that is scheduled to be burned will not be distributed after Flare reaches an agreement with these entities on how the first Flare Improvement Proposal (FIP.01), should affect token allocations to equity shareholders.
FIP.01 was approved in January 2023 by the Flare community with 94% votes in favor.
Following the approval, the 24.2 billion tokens allocated to the public token distribution are being shared by all holders of Wrapped FLR across 36 monthly FlareDrops over three years. Seven FlareDrops have been completed, with the eighth available to claim on Oct. 13.
“We are very happy to have reached an agreement with our shareholders and thank them for their support," Flare CEO Hugo Philion said. " It is right that investor token allocations should also be affected by the changes implemented in FIP.01. Without this burn, the investors would be able to claim approximately 3x their original allocation through the FlareDrops, unfairly diluting community holdings.”
Benzinga's Future of Digital Assets conference is scheduled for Nov. 14. Attend and learn more about burning of tokens leading to blockchain’s stability. The gathering is seen as pivotal for the digital assets’ community. The event will spotlight the latest trends, innovations, and challenges in the digital asset realm.
Price Action: In the past 24-hour trading, Flare (CRYPTO: FLR) collected 4.6% in gains with a trading volume of 9.2 million.
