The price of Flare receives a significant boost as investors take steps to make the ecosystem more stable and support its long-term growth.
FLR, the main cryptocurrency of the EVM-based Layer-1 Flare Network, has risen by 7% in the past day, with trading volumes increasing by 64% to $88 million. This surge in Flare’s price coincides with the network unveiling some important updates to the FLR tokenomics.
Flare Network’s New Initiative for Long-Term Growth
Flare Network has introduced a pioneering agreement where its initial investors are reinvesting in the network’s future growth. This groundbreaking initiative involves extending token vesting periods, imposing sales caps, and committing to reinvesting 50% of any token sale proceeds into projects within the Flare ecosystem.
At current market valuations, this reinvestment potential amounts to around $35 million, demonstrating their dedication to nurturing the ecosystem’s growth and development.
The reinvestment of 50% of token sale proceeds will provide significant support to various Flare ecosystem projects moving forward. These projects include the development of lending protocols, decentralized exchanges, enhancements to automated market maker protocols, implementation of cross-chain bridges, and the introduction of native stablecoins.
Enhancing Stability and Growth in the Flare Network Ecosystem
The early backers of the Flare Network have taken proactive steps to improve the ecosystem’s stability and encourage long-term growth. They have opted to reduce the surplus liquidity of FLR tokens, boost capital inflows into Flare’s decentralized finance (DeFi) protocols, and encourage new investments in Flare ecosystem initiatives.
An announcement earlier this month revealed that XRP will integrate with FLR through the FXRP asset, further enhancing the interoperability of the Flare Network.
In October 2023, Flare introduced an additional liquidity measure by announcing its intention to burn 66 million tokens monthly until January 2026, amounting to 2% of the token’s total supply. While original early investors will still receive their initially agreed-upon 2% allocation of Flare token supply, these revised conditions represent a 68% decrease in the upfront issuance.
Furthermore, these backers have voluntarily extended their token vesting period from 2024 to Q1 2026 and have agreed to limit their token sales to a maximum of 0.5% of the 30-day average trading volume.
Flare co-founder Hugo Philion expressed appreciation for the backers’ support, highlighting the importance of liquidity agreements in fostering a growing ecosystem aligned with Flare’s growth objectives.
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