So, you're interested in $FLIP then? You've come to the right place. Here, we'll explore the $FLIP token, its characteristics, and information regarding the supply.
This page will be the source of truth for all questions regarding the $FLIP token, and will always reflect the most recent supply statistics. If a friend (or stranger on Telegram) asks about $FLIP, make sure you point them to this page.
The FLIP token is the upcoming ERC-20 protocol token of the Chainflip decentralised exchange. Although Chainflip has its own blockchain, the multi-chain nature of the project allows the $FLIP token to be on Ethereum for ease of use and adoption. Staking done on the Ethereum StakeManager contract loads those tokens onto the Chainflip State Chain for use in the appchain environment. You can test this out on the Perseverance testnet right now!
The primary utility of the $FLIP token is used as collateral for Validator auctions. Validators require large stakes, earn rewards from the block reward, and maintain the state chain for Chainflip by jointly controlling the liquidity vaults.
The rewards that Validators earn is offset by the DEX automatically converting the network fees collected in USD into $FLIP and then burning it automatically within the protocol. This is done without the user needing to buy $FLIP themselves. Therefore, even if you don't use the token to stake, there is still potential benefit in holding $FLIP.
$FLIP is also required for Liquidity Provision and Relaying services in order to process instructions on the decentralised exchange. All transaction fees on the State Chain are burned.
You can read more about the value capture mechanism built into the protocol in our docs article, Incentive Design: Emission & Burning.
In order for the token to be released, the Chainflip mainnet must first be launched. This will ensure that as soon as the token is released, staking into Validators can immediately take place. We call this the Sandstorm launch.
We are currently storming ahead with protocol and product development in preparation to roll out the token, network, and swapping product. Check out our Roadmap for a more detailed overview of the path to launch.
Once ready, the rollout plan, including the token launch date, will be announced a few weeks in advance across all our channels once we can lock it in. To make sure you don't miss it, sign up for notifications by email, or join our Discord and/or Twitter.
After the network is live, the token rollout will start with the launch of the Token Generation Event (TGE). The TGE is a public offering of tokens on a live trading venue that allows participants to purchase $FLIP tokens before any further distribution takes place. Stakeholders are currently in discussions to determine where and how this TGE will take place, but all parties agree that involving as many community members as possible is key to its success.
Annual Emission Cap
Annual Burning Expectation
|0-9% (dependant on volume)|
Expected Validator Supply Lockup
|45-55% in 1 year|
Expected Validator Yields
|13-15% APR in FLIP|
Initial Circulating Supply
Initial Market Cap
There are a few different lockup rules for different parties in the Chainflip Ecosystem. The terms of the lockup conditions are described as:
Lockup Tokens are deposited into a smart contract which prevents transfers for 365 days. However, the contract still allows the holder to interact with the StakeManager contract, allowing them to stake these tokens into Validators during the lockup period.
Tokens in this category are for strategic investors who were granted the choice between lockup option A or B, and have not yet made a final decision. These figures will be updated once decisions have been made and signed off on.
Tokens are deposited into a smart contract which releases 20% of the tokens after the conclusion of the TGE. The remaining tokens can be claimed linearly over the next 365 days.
These tokens remain completely locked until certain conditions are met by the start of a month after the successful launch of the Chainflip Swapping Protocol. When this has been achieved, the tokens can start to be claimed, with some contributors able to claim 10% and others receiving 20%. The remaining tokens can be claimed linearly over the following 2 or 3 years, depending on how long that contributor has been a part of the project.
Tokens with no restrictions applied to them upon distribution.
Tokens locked indefinitely in the project treasury, used exclusively in Validators unless otherwise announced in disclosure statements.
Chainflip has undergone multiple funding rounds, raising a total of $23.3m. These rounds were conducted through a series of rounds, all of which are detailed below.
Fundraising began with a series of investments from late 2020 and closed in February 2021, for $3.81m at approximately $15m valuation. This round was led by Blockchain Capital and other notable names such as Mechanism Capital, Apollo Capital, CMS Holdings, DACM and more.
The main round took place shortly afterwards and closed in August 2021, raising $5.80m at a $45m valuation. Notable names leading this round include Framework, Coinbase Ventures, Hypesphere, Delphi, Morningstar Ventures, EdenBlock, MetaCartel, Lemniscap, Defi Alliance and more.
Our most recent round was an equity round for $10m at an equity valuation of $45m in May 2022, with an implied token valuation of $120m. Pantera Capital, Framework Ventures and Blockchain Capital were the buyers. Unlike the token rounds, investors are committed for 5 years and can redeem their shares for a share of the treasury instead of a direct token warrant.
Many investors have signed additional terms that require them to run validator nodes or provide liquidity, and are required to actively manage these positions with a performance clause. An example of such a clause would be to run 2 validator nodes, without any prolonged downtime, for the entirety of an investors lock up period. Between all of our investors, this amounts to 30 active validator nodes and $12m in liquidity provision on the protocol guaranteed for the entirety of the lock up period, 365 days.
Finally, Coinlist users purchased $3.78m worth of tokens during the public sale that ran accross August and Septmeber of 2023.
Here's a breakdown of the circulating $FLIP supply immediately after initial distribution has been completed, and another chart showing the circulating supply 6 months after the distribution:
This release schedule shows the expected distribution of token unlocks over the 36 months following token launch. Please note that it is approximate based on date estimates, and may be impacted by altered please dates and other events.