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 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 issued on Ethereum for ease of use and adoption. Staking done on the Ethereum State Chain Gateway 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.