Flare illuminating the utility issues of blockchain
Crypto AM meets Hugo Philion, CEO and co-founder of Flare…
Hugo Philion and his two co-founders shared a love of technology, in particular blockchain. In 2017 they began to focus on consensus algorithms, intrinsic to cryptocurrencies, where they are used to achieve agreement on a single data value amongst distributed processes or systems.
“There’s a lot of layer one blockchains out there,” he explains.
“However, most of them are dealing with various aspects that are not necessarily perfect in our industry today. There are newer blockchains focused on technologies such as scaling using sharding and zero knowledge proofs. But scaling alone isn’t going to lead to more utility for the industry.”
Philion argues that, currently, blockchains are quite limited in what they can do – essentially, they are a ledger.
“They can confirm what has happened on that ledger, they can come to a consensus over it which is super and a great utility, but it is not, by itself, necessarily a utility that can scale or offer products to the entire population of the world,” he added.
“And ultimately, that is what we want out of this new technology. So, at Flare, we are not trying to attack the scaling problem because that will become a commodity in time rather in the same way we all use algorithms as standard practice. Whoever manages to fix the scaling problem will only have a very short window to take advantage of their solution.”
Instead, Flare is looking to tackle the utility problem of blockchain. Philion sees only one major product currently: DeFi, but he doesn’t call it a use case for blockchain, rather a set of primitives with limited usage.
“If we want to roll out DeFi and decentralised blockchains to a much larger number of people, then we need to add in as much data as possible.
“Flare is the blockchain for data. We have native protocols to be able to come to consensus over and absorb data from external systems, both blockchains and web2 APIs. This will give developers the ability to build much more interesting applications and it is these future applications that will have the chance to gain a very large user base.”
Building a blockchain of data takes time. Flare built its Songbird canary net in September 2021 to both live test its protocols in the wild (on a blockchain where value already exists) and also to observe if its analysis of human behaviour, or participant behaviour is correct.
“As you will be aware, all blockchains rely on some form of game theory for safety or consensus as it has to be used by people. To see the interactions on Songbird has been really useful to us. It’s also designed for developers to build within the Flare ecosystem and test their protocols on Songbird before transitioning to our main net.”
Philion explains the two blockchains as being the same as a lower house (Songbird) and an upper house (Flare) in a traditional bicameral system.
“Another important aspect are the data protocols that allow Songbird and Flare to essentially prove what has happened on another blockchain on the chain – allowing two way traffic between. And finally, Songbird can act as a viable layer 2 blockchain for additional computation on Flare.”
So while the existence of Songbird has not changed the development of the mainnet, it has been critical for analysing the data providing protocols, notably the FTSO, resulting in several changes.
“Of course, originally Flare was designed to be a layer 2 for a particular blockchain, XRP, but now it has evolved into a layer 1 blockchain for data delivering interoperability both with other blockchains and the internet.”
Flare has been building up to its own go-live moment where the token was distributed to many millions of (latest rough extrapolation is about seven million) addresses on every major exchange in January.
“This was one of the largest, widest and most massively decentralised token distributions in the history of crypto. It meant that Flare got massive support from exchanges (and is listed across many of them except Coinbase and Binance, but Coinbase has confirmed it will list the token in the first half of 2023).
“We distributed 15% to the public and then the remaining 85% will be earned over the next 36 months by wrapping the Flare token on the network.”
Philion explains that the monthly distribution is earned pro-rata. If someone holds 10% of what is wrapped, then they earn 10% of that month’s distribution and on and on for the next 36 months.
“We modelled it using the Bitcoin mentality where you have relatively high inflation in the early days for people who contribute to the network.
“It’s very hard to know what people will build in time. Consider YouTube or Facebook – I’m sure that the builders at the time did not know of the ultimate size of their application. We are looking to create the blockchain for data to allow people to take data from other places and use it on a blockchain. That might mean data as your identity so you can plug it into games, social media networks or even open banking.
“It might allow people to create applications where DeFi is relevant, perhaps in the form of buying in-game assets. Before you might have needed a requisite token and current DeFi is very limited in its application. We also see Flare as offering a monetization layer in Blockchain for existing Web 2 properties – and then you’d have a real inroad into mass adoption.”
So far, the large Flare community has been voracious for information and can be intense and critical when things go wrong or are not just perfect. One example of their engagement is a recent vote to change the distribution mechanics for the airdrop.
“There was minimal participation from the team, but it passed with a 93% majority which clearly demonstrates the passion of the community. As a Foundation we will also be supporting any credible developers wishing to build on the network through grants. And we are looking for partnerships with other companies and blockchains – as interoperability is key to our success.”