Flare Network recently announced that the 66% distribution threshold for the vote on FIP01 has been surpassed. This proposal, if approved, would introduce changes to the distribution and inflation of the Flare blockchain’s native token, FLR, as well as adjustments to the payout structure and recipients of the Cross Chain Incentive Pool. The voting period is set to begin in one week and will last for another week. In the voting phase, 85% of all FLR held by Flare entities and teams will be escrowed and unable to vote, while the Flare Foundation’s related entities are not allowed to participate in the voting process.
The co-founder and CEO of Flare Network, Hugo Philion, took to Twitter to outline the benefits and drawbacks of the FIP01 proposal for XRP holders. According to Philion, the proposal incentivizes network participation and encourages new ecosystem entrants. It also shifts FLR tokens to those who actively participate in the network, reduces overall inflation, and incentivizes infrastructure providers, creating a safer and more decentralized network. However, he also pointed out that XRP holders who participated in the 2020 snapshot would need to wrap their Flare tokens to receive the full distribution, potentially receiving less FLR than expected under the 2020 snapshot.
Despite the potential drawbacks, there are benefits for XRP holders under the FIP01 proposal, as it removes the risk of reliance on exchanges that may fail. Depending on their level of participation, XRP holders may end up with more FLR tokens than expected under the 2020 snapshot. However, the amount of FLR received ultimately depends on the level of staking on the Flare network, which needs to be near the industry average to maximize potential rewards.
In terms of the distribution of FLR tokens, a total of 28,524,921,372 tokens have been allocated for public distribution, regardless of whether the FIP01 proposal is approved or not. This translates to a ratio of 1.0073 FLR for every 1.0000 XRP held. The token distribution began on January 9, with the first 15% of the public token distribution already distributed to eligible users at a ratio of 1 XRP to 0.1511 FLR. The remaining 85% of tokens will be distributed over the course of 36 months, providing a gradual release of tokens to participants.
Overall, the FIP01 proposal has the potential to bring significant changes to the Flare network, incentivizing participation and creating a more decentralized ecosystem. XRP holders who participated in the 2020 snapshot will need to wrap their Flare tokens to receive the full distribution but may benefit from increased FLR tokens depending on their level of participation. With the voting phase set to begin soon, it will be interesting to see how the Flare community responds to the proposal and its potential implications for the network.
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