Update for exchanges: All inflation is being

burned during Observation Mode

Update for exchanges: All inflation is beingburned during Observation Mode

The Flare (FLR) fully diluted supply at genesis on 14 July 2022 was 100 billion tokens. Since that date, Flare has been in Observation Mode while validators are onboarded and the network becomes sufficiently decentralized.

During Observation Mode all inflationary rewards will be burned. This will ensure that the fully diluted supply, excluding burned tokens, will still be 100 billion at the point of the public Token Distribution Event.

This is the reason that the sum of all token balances in the Flare Explorer stands greater than 100 billion. On 7 September 2022, the total is 100.025 billion. The excess 25 million FLR is inflation rewards generated by the Flare Time Series Oracle smart contracts that have already been burned or will be burned.

This is the burn address. As of 7 September 2022, it contains approximately 12.0 million FLR.

This is the FTSO Reward Manager contract which allocates rewards. As of 7 September 2022, it contains approximately 13.3 million FLR. These tokens will be sent to the burn address.

When we reach the end of Observation Mode and can initiate the Token Distribution Event, governance will call method 13 within the FtsoRewardManager – enableClaims. This will set the next epoch as the first reward epoch that will be claimable.

All reward epochs prior to that date will expire, and all inflationary tokens from those epochs will be burned. The below code detail demonstrates the mechanism by which this will happen.

Code evidence

All extra tokens above 100 billion have either already been burned or are in this contract. The code for this contract is visible here.

The relevant code parts outlined below demonstrate the rewards are impossible to claim and will be burned:

  • The current firstClaimableRewardEpoch is set to max uint256. You can see this in API 6 here.
  • All Claim reward functions use this function _isRewardClaimable to check if the reward is claimable.
  • As can be seen in _isRewardClaimable, no claims are possible for any reward epoch that is lower than the value of firstClaimableRewardEpoch.
  • Until governance changes the firstClaimableRewardEpoch on TDE, the rewards are impossible to claim and will expire and be burned.