What is Flare (FLR), and what are its prospects in 2024?
According to CoinMarketCap, the number of Tier 1 blockchains exceeds 9,500 and continues growing rapidly. Many will cease to exist, and only the strongest will remain.
What is Flare?
Flare Network is a decentralized Tier 1 blockchain network compatible with the Ethereum Virtual Machine (EVM). The Flare Network provides developers with tools to build Web3 applications with decentralized data access.
Flare, the company behind the development of this blockchain, was founded in 2020. Flare developers were inspired by the popular Ripple protocol, one of the top six blockchains by capitalization.
The Flare developers presented a unique concept that allows the blockchain to scale without compromising the network's security, which does not rely on native tokens, unlike almost all other decentralized protocols.
Another emphasis the developers put on interoperability. For example, XRP holders can transfer their tokens from Ripple's native network to the Flare blockchain by converting them into FXRP-wrapped tokens.
Incidentally, Ripple was one of the first investors in Flare, which funded the project in 2019 through its subsidiary Xpring. In 2021, the Flare team received more than $11 million from various significant funds such as:
- Digital Currency Group,
- Ripple,
- LD Capital,
- Kinetic Capital,
- CoinFund.
In addition, the project has raised almost $11.5 million through public token sales.
How does Flare work?
The Flare Network blockchain is powered by Avalanche Snowman++ consensus based on the popular Proof-of-Stake (PoS) algorithm. The creators of the project have developed their protocols to ensure efficient and secure operation of the Flare Network:
- FTSO
- and State Connector.
Flare Time Series Oracle (FTSO) is a highly decentralized protocol for securely obtaining data from external sources, such as cryptocurrency quotes for DEX exchanges. The outside information is supplied by independent providers who have a vested interest in providing accurate data.
The second protocol of the Flare blockchain is the State Connector. This protocol defines consensus rules for external events outside the Flare blockchain. Such events include, for example, bilateral on-chain transactions, including those conducted via APIs.
The State Connector protocol consists of two main components: Request-Commit-Reveal (RCR) and the so-called Branching Protocol. The RCR protocol collects requests from users in packets during each round and forwards them to independent attesters, who extract the necessary information from these packets and confirm their validity. The State Connector publishes the results of the attestations at the end of the round if they are consistent with the attesters' validations.
The branching protocol allows individual validator nodes on the Flare blockchain to define and validate their private attester lists. Suppose the results provided by the attesters do not match the evidence of the rest of the network. In that case, the validator node "branches out" and stops processing additional transactions until the discrepancy is resolved.
Flare token
FLR is a native Flare blockchain token for transfers, other payments, staking, transaction fees, and more. In addition, FLR holders can "wrap" their tokens and delegate them to data providers in exchange for rewards. This approach incentivizes providers to provide more accurate data, as it will help attract more delegates.
FLR tokens also allow owners to participate in the platform's management via the Flare Foundation protocol, providing access to Songbird's sidechain management via its native SGB tokens.
There is a "wrapped" version of the native FLR token, the ERC-20 standard WFLR, on the Ethereum blockchain. Like FLR, WFLR tokens can be delegated to Flare Time Series Oracle data providers or tokenized to participate in managing the Flare ecosystem. WFLR tokens are obtained by blockchain FLR through a smart contract, just like any other wrapped token.
FLR token is ranked 82nd in CoinMarketCap's overall cryptocurrency ranking by capitalization, which is $751.1 million. The total number of tokens exceeds FLR 100.5 million, but only about 32% (32.5 million) of them are circulating on the market. FLR does not have a cap on the number of tokens, making it an inflationary cryptocurrency whose number will only grow over time.
The FLR token exchange rate is at $0.023 as of January 2024. Since October 2023, when the token rate hit a local low of $0.082, the FLR price has increased 2.8 times. However, the FLR rate is 70.8% below its all-time high (ATH), reaching January 2023 at $0.079 almost immediately after listing on major exchanges.
What are the prospects for Flare?
Considering that the project is under the wing of Ripple and well-known funds have invested in it, Flare's prospects seem good. However, the trend may be spoiled by the growing competition among blockchains. New protocols such as Aptos, Celestia, Sui, and Sei have already significantly outpaced Flare in capitalization, although some were launched around the same time. Celestia, for example, only came out in October 2023 but is already ranked 32nd in capitalization.
Even though the rate of Flare's native blockchain token has fallen significantly relative to its ATH, the project's capitalization shows a positive trend: the index has grown almost one and a half times in a year and by 338% since October 2023.
The Flare team has not yet presented a roadmap for 2024, so it's still unclear how their blockchain platform will compete with the newly minted giants. Flare's current growth trend is mainly dictated by general bullish investor sentiment rather than by the development of the ecosystem and increased user demand for the project's token.
