FLARE TOKEN UTILITY

The Flare Token

The native token that’ll be distributed is called FLARE, with the ticker $FLR. Initial distribution will be airdropped to claimants from the $XRP snapshot that took place on 12/12/2020. NO longer will be called Spark. This is to avoid confusion with an existing project, and therefore protect the community from interaction with the wrong token.

USE CASES for FLARE ($FLR token) Native crypto asset of the Flare Network for:

GAS and TRANSACTION FEES in order to prevent spam attacks on Flare. All Gas/Txn fees are burned
MONTHLY DISTRIBUTION is linked directly to FLARE Tokens wrapped as $wFLR (36 months distribution)
VOTE POWER DELEGATION to the Flare Time Series Oracle (FTSO) data providers to support the provision of reliable decentralized price data.
- Vote Power is detachable from the $FLR token) Delegating vote power is Risk-Free and most importantly, it does NOT lock up $FLR tokens. $FLR must be wrapped to $wFLR first before delegating vote power to FTSO’s
FTSO REWARDS paid out in $FLR every 3.5 days to delegators delegating vote power ($wFLR) to FTSO’s $wFLR vote power is 1:1 ratio, 1 $wFLR=1 Vote
COLLATERAL for the minting of F-Assets onto Flare Network via its native bridging application for non-smart contract Networks
COLLATERAL in Layer Cake, by operating as an Agent or Bandwidth Provider respectively.
COLLATERAL securing data relay in the Relayer
COLLATERAL within third party decentralized applications built on Flare blockchains
LIQUIDITY in an AMM DEX Liquidity Pool built on Flare Network blockchains or in cross-chain DEX swap pool
VOTING PARTICIPATION in Flare Network governance. New Proposals, Treasury management, inflation rate, and other parameter changes
- Flare Network is a Layer 1 with DAO governance embedded into the code of all core contracts and $wFLR token contracts (vote power). Unlike most DAO’s, FlareDAO governance voting actually happens ON-CHAIN via a Liquid Democracy structure. 1 $wFLR=1 Gov Vote

FLARE Token exhibits some unique benefits that distinguish it from the vast majority of other crypto assets native to a Layer 1 blockchains. Since Flare Network’s consensus is NOT based on Proof of Stake, it does NOT require $FLR tokens to be locked up simply to secure the network. Instead of all the networks inflation rewards being used to incentivize PoS Validators or PoW miners, it frees up the inflation rewards be utilized to the benefit of the entire network, including Dapps, network users, and $FLR token owners. This allows Flare to introduce new roles for a variety of stakeholders to participate in that strengthen the network, Oracles (FTSO’s), Attesters, Bandwidth Providers and Agent’s, which all contribute to increasing demand for $FLR tokens.

This dramatically alters the dynamic at the network layer, freeing up the network rewards and $FLR utility. 70% of Network rewards (inflation) is utilized to incentivize the accurate provisioning of data onto Flare via a decentralized network of Oracles, called “FTSO’s.” Blockchain networks cannot natively access data outside of their network, this is widely considered one of biggest problems plaguing the blockchain industry, commonly referred to as “THE ORACLE PROBLEM.” Flare’s FTSO provides rapidly updating, reliable and decentralized time series data to applications on the Flare network, while simultaneously earning rewards for FLR token delegators and an income for data providers. The FTSO system is the “Beating Heart of the Flare Networks” but is only half of Flare’s solution to the Oracle Problem. FTSO provides probabilistic data, where as the State Connector is even more powerful with the ability to provide deterministic data that can come to consensus over the state of data from other blockchain networks, open databases, and open API’s. Default set of independent Attesters are incentivized to operate infrastructure on other networks, along with a local set of Attesters running on the Flare Network. Flare replaces miners and proof of stake validators with 2 cutting edge Oracle/Attestation systems providing a foundation to drive demand for $FLR utility as Collateral which is not feasible in Proof of Stake Networks which having a constant conflict between the native crypto asset being staked to secure consensus and as collateral in DeFi or other use cases.

Flare tokens unprecedented Superpower the ability to achieve all 4 “Utilities” described below simultaneously:

Earn FTSO delegation rewards compounding every 3.5 days of native $FLR (Rewards come from inflation)
Earn monthly Distribution rewards of $FLR for 36 months based on $wFLR owned (highest rewards will be earned in first few months after launch)
Deploy as Collateral to earn other blue chip crypto assets
- As AGENT in F-Asset system to earn XRP, BTC, etc.
- As BANDWIDTH PROVIDER in “Layercake” Protocol’s Multi-Lateral Bridging and Insurance Protocol between smart contract networks to earn consistent revenue in top blue chip crypto assets via fees earned.
- AS RELAYER in the cross-chain data relay system
- In any Decentralized Application as Collateral or Liquidity to earn fees/interest/yield or borrow against
Vote in all governance proposals, parameter changes, or other network changes.

The Flare Token takes “utility” to a whole new level that has never been seen before in the crypto industry up until now. Removing all the flaws of Proof of Stake network tokens by freeing up Flare tokens to be the “Ultimate Collateral Asset” for any decentralized crypto asset to be capable of earning 2 forms of native in-built yield, voting in governance, and “SIMULTANEOUSLY” being utilized in its native form as “collateral”. Flare team built a decentralized application infrastructure (F-Asset system, Layercake bridges insurance, and cross-chain Relayer) or as collateral or liquidity in any DeFi Dapp smart contract! Flare Token was designed explicitly to not sacrifice the opportunity cost of having to choose between delegating vote power to FTSO data providers and earning monthly $FLR distribution rewards “OR” deploying their Flare Token value to earn yield/fees in any of Flare’s 3 initial core products or any of the 100’s of DeFi Dapps that will be built on Flare Network in the future. It’s also important to note, owners of Flare Token can simply remain in full custody of their $wFLR tokens in their non-custodial wallets “AND” still earn BOTH, $FLR rewards at ZERO RISK from delegating vote power to FTSO’s (Trustless) and monthly $FLR distribution rewards while being able to “FREELY” move or sell their tokens whenever they want to.

This is in stark contrast that comes with the risks of traditional staking in other Proof of Stake networks like ETH 2.0 and others, which expose users who stake those native L1 tokens with Lock up periods that range from 7-28 days, Slashing risks, loss or theft of funds, and volatility risking during the unbonding period. “Liquid Staking” allows users on Proof of Stake networks to stake their native L1 tokens to earn network rewards while receiving a derivative token representing their staked tokens, this comes with additional risks that in addition to staking risks are, divergence in price between liquid derivative asset and staked asset on open market(as seen with Lido’s $stETH/ETH a few months back when the market experienced extreme volatility, and there’s also the risk of no or low liquidity in the market for the staking derivative. These risks are lesser with the high valuation crypto networks in the top 50 and liquid staking derivatives have been rocket fuel for DeFi markets on networks like Solana, Ethereum, Avalanche and others. Institutional interest in staking has exploded in the past year, with Custodians like Standard Custody, Anchorage, Coinbase, SEBA Bank, Sygnum Bank, SDX Exchange, DCG owned Foundry, Kraken, Binance, Blockdaemon, Figment, and nearly every major exchange now offer to their retail and institutional customers.

There’s a few very critical key differentiators that make Flare Token far superior to any of the Proof of Stake L1 crypto assets like $ETH2.0, $SOL, $AVAX, $MATIC, and all other Proof of Stake Layer 1 native crypto assets.

Flare Token native advantages and functionality VS Proof of Stake tokens STAKING and LIQUID STAKING

FLARE TOKEN $wFLR

ZERO risk when delegating vote power to FTSO signal providers to earn $FLR rewards every 3.5 days
ZERO risk when receiving the monthly distribution for 36 months of the ~22 billion $FLR to be distributed
NO Lock up period or unbonding period
NOT a liquid derivative, it’s the actual native asset with simply a smart contract wrapper
CUSTODY can be maintained by owners if they choose and still earn FTSO rewards, distribution rewards, and vote in governance
SIMULTANEOUSLY use as collateral while earning FTSO rewards 2x week, monthly distribution, and vote in governance
VOTE POWER is mapped and checkpointed at every block tied back to the token owner’s account
FTSO rewards and Distribution Rewards can be directed to crowd fund projects, auto-repay loans, or escrowed to savings account
Delegating Vote power to FTSO data providers contributes to accurate provisioning of data and decentralization of FTSO’s
EQUAL TREATMENT of every Flare Token owner
OPEN ACCESS to every Flare Token owner to operate an FTSO, run a Node or Validator, become an Agent or Bandwidth provider
USE as COLLATERAL in 3 Core Enterprise grade powerful infrastructure applications for interoperability that are built by Flare Team
Flare Token remains in its native form with only a smart contract wrapper ($wFLR)
$wFLR delegating vote power to FTSO’s to earn network rewards is still 100% native Flare Token and can be converted back to $FLR with one click in Bifrost or other Web3 wallets. This is in stark contrast to when an owner of STAKE $ETH or $SOL, owners lose possession of native tokens and receive a derivative token in liquid staking protocols in the form of $mSOL or $stETH.

Detachable vote power contracts have been specially designed to always allow Flare Token owner to move their tokens even if there was a bug in voting delegation contract. Flare Token owners can also vote in governance proposals while their $wFLR is deployed in a smart contract as collateral, this is due to the meticulously designed Vote Power contracts that many in the community are not aware of. All vote power that is delegated is mapped and checkpointed at every block to the actual token owner. We should expect a long tail of value airdropped/distributed from projects launching on Flare that can randomly snapshot based on a “HISTORIC TIME STAMP” that publicly retrieves the accounts of all $wFLR owners token holdings linked to their Flare Account Address that are delegating vote power to FTSO’s and could even have their $wFLR in a smart contract as collateral at the time. This is another groundbreaking design feature of Flare Tokens and Flare Accounts and will avoid the snapshot frenzy scenarios of past airdrops that we saw on #XRPL during Sologenic snapshot and the #ExFi snapshot in December 2021 that wreaked havoc in the market by airdrop farmers. That will never happen on Songbird or Flare Network, as only those who are actively participating will receive those airdrops and because they are based on a token ownership and delegation from a historical blocks timestamp, it will avoid scavengers from buying right before a snapsot and dumping right afterwards, then dumping the airdrop tokens immediately which is harmful to entire ecosystem. This is also why there will be 3 random snapshots every 30 days to determine how much each Flare Account address that owns $wFLR and is delegating vote power to FTSO’s will receive the monthly distribution based on their mean $wFLR token holdings across the 3 snapshots compared to total vote power for those 3 snapshots. ONLY those who have wrapped Flare Tokens to $wFLR in a non-custodial wallet and delegated vote power to FTSO’s will be eligible, everybody holding $FLR on exchanges or in self-custody wallet that’s not wrapped to $wFLR will not receive any of the monthly distribution. This is because it’s the smart contract wrapper that gives $wFLR vote power that can be snapshotted, regular $FLR is invisible during those 3 snapshots.

The most important design feature of the flare token is its uniquely suited as high-quality collateral compared to liquid derivate tokens of staked assets due to the complete elimination of all the risks that come with liquid staked derivative tokens. Flare Token advantage over the native forms of those tokens is its in-built 2 forms of native yield that can be earned while simultaneously be used as collateral and vote in Flare Network DAO on-chain governance. Flare Network is going to incentivize F-Assets and Layercake assets which will make it appealing and attractive to owners of those tokens instead of competitive. Flare Token might have superior utility as collateral and earns higher yield from FTSO delegation rewards and monthly distribution rewards but it’s not trying to replace Bitcoin as digital gold or US Treasury Bonds. It’s built with next gen technology in the State Connector and FTSO that provided the necessary capabilities for the team to build out 3 enterprise grade interoperability infrastructure products that require “DEMAND” for Flare Tokens ($wFLR) as COLLATERAL. The vison goes beyond the Flare Token and its utility as yield bearing collateral. Collateral also needs to be a good store of value with deep liquidity with other top crypto assets. Flare Token will have to prove itself and will need a robust ecosystem diverse use cases in a variety of DeFi Dapps and other use cases. It is not going to be concentrated into only a few large holders who control the supply, the restructured distribution as described in the recent Governance Proposal from the Flare Foundation, FIP.01, levels the playing field for all participants and treats everyone equally. The initial airdrop of approximately 4% of total token supply to #XRP owners from back in December 2020 snapshot will be the largest airdrop in the history of crypto, with 3 Million+ accounts receiving the initial distribution and over 100 exchanges, 70% going to exchanges. The remaining distribution will be distributed deliberately through the Flare Network ONLY to those who are actively engaging with the network, instead of 36 months of 18 billion $FLR being airdropped to accounts on exchanges, which would have been disastrous and created a speculative trading environment from claimants from 2020 snapshot selling into the secondary market on 100’s of exchanges for 3 years. When the new proposal is passed that will dramatically alter the market dynamics of $FLR, limiting the speculative trading to only the initial 1-3% of total supply, with the focus being the utilization on the Flare Network and as collateral. Massive incentives early on are designed to bootstrap interest and remove non-participants, Flare Token spec trading market in first couple months will be a complete distraction and is an opportunity that we may never see in crypto ever again at this scale and getting in this early that will offer retail to accumulate significant amounts by simply delegating no risk vote power to earn compounding 2x per week rewards and monthly distributions of $FLR, with the first few months being astronomical to those who are prepared for it, and painful regrets to those who were only paying attention to price on exchanges and didn’t take the time or effort over the previous 2 YEARS to understand what Flare Network’s vision is and why accumulation is primary focus in first few months regardless of price.

On the other hand, we must manage expectations and stay grounded in that Flare Network is a brand-new network that’s unleashing groundbreaking new technologies and products that will take some time to reach their full implementation. Also, understanding that this is a community driven network, this is not about central banks or big banks anytime soon, focus is on building community foundation and welcoming other communities warmly and sharing knowledge about what makes the Flare Network uniquely different and how it is not just about buying or holding Flare Token, it’s about all crypto assets, either F-Assets or Layercake Assets that are layer 1 crypto assets. They are all welcome on Flare Network and in the cross-chain Dapps Flare technologies facilitate but it’s the cherry on top that will be significant, the fact that they will all earn $FLR rewards from the Treasury Incentive Pool just for bridging Layercake asset to any network, not just Flare and F-Assets minted onto Flare, they will all earn daily $FLR rewards which there’s absolutely no other bridging system or network that offers anything like that. Flare Token distribution will increase the circulating supply for the first couple years but as long as demand for $wFLR as a lower risk form of collateral grows, then so will the value. It’s not hype or speculation, it’s a downright FACT that Flare Token eliminates all of the risks associated with liquid staking derivatives when used as a collateral in trustless enterprise grade products and simultaneously earn multiple forms of continuous revenue streams. Being a dynamically powerful yield bearing asset that can earn blue chip crypto’s and 2x different $FLR rewards via FTSO delegation and distribution, all without sacrificing opportunity cost of PoS staking tokens. Flare Token is ideally suited as the perfect collateral supported by the State Connector Attestation system, Flare Time Series Oracle, Decentralized Consensus that doesn’t used value of tokens to secure bridges, Relayer system for cross-chain data communication between networks, F-Asset Cross Chain Collateral system to bridge non-smart contract blue chip crypto (XRP, BTC, XLM, LTC) onto Flare, and Layercake Insurance protocol to support multi-lateral bridging of smart contract networks. Web2 to Web3 data interoperability of the state connector will unlock automatic smart contract execution on multiple networks using data from other networks and Web2. Flare’s Interoperability stack designed for Dapps to expand to be cross-chain native is an absolute game changer.

Much has changed in the last two years. Flare has evolved to be a radically larger project than what was originally envisioned scope than the single utility it was initially designed for. Flare is now designed to be a foundational piece of blockchain infrastructure! Flare Token is at the heart of the vision to Connect-Everything and cross-chain DeFi. As DeFi explodes with value pouring in over next 18 months, Flare Token is positioned to be the Daddy of Crypto Collateral in DeFi that can’t be matched. Flare Token, Flare Network, and Flares groundbreaking protocols will be capable of serving all communities!