Flare, the blockchain network running on the Federated Byzantine Agreement (FBA) consensus mechanism, has raised $11.3M in its latest fundraising round. Contributions to Flare came from a slew of prominent names in crypto including Digital Currency Group, Coinfund, Kenetic Capital, LD Capital, cFund, Borderless Capital, Wave Financial, and Backend Capital.
Angel investors who participated in this round include Litecoin’s founder Charlie Lee, Vinny Lingham, and Do Kwan. Additional investors included Newform Capital, Genesis Capital, OKEx/Dreamfund, ZB Group, Defi Capital, and Ripple.
Flare’s CEO, Hugo Philion, commented: “The investment announced today demonstrates a belief in Flare from key participants in the investment community, together with key exchanges, market makers, blockchain founders and entrepreneurs.
“This builds an even stronger and more connected community around Flare that can drive meaningful developments and participation. We are grateful for all investors’ support in helping bring the Flare Network to fruition.”
Flare Harnesses the Power of Unused Coins
It’s currently estimated that 75% of all digital assets lie outside of DeFi’s reach, and these cryptos represent a massive amount of untapped wealth.
Some of these assets, such as XRP, XLM, and Litecoin are tokens for systems that are not Turing complete, meaning that they cannot be used to run smart contracts or dApps, basic necessities for participating in DeFi. Flare opens the door to DeFi for these tokens by allowing users to create F-Assets, for example, XRP becomes FXRP, which can then be used in Flare’s smart contract ecosystem running on the Ethereum Virtual Machine.
Another subset of untapped wealth in crypto is the tokens that help support Proof of Stake consensus models. While Proof of Stake has many advantages over Proof of Work, this model ensures that a large number of tokens cannot be used for DeFi, as they are used as collateral for validating transactions instead.
Federated Byzantine Agreements for the Win
A validator cannot, at the same time, stake their tokens to secure the network as well as use those tokens for providing liquidity. The FBA model of consensus, which was first brought to prominence by Ripple and proven safe by Stellar, does not rely on the wealthiest members of a blockchain community to support security with their staked tokens, and this means those tokens can enter the DeFi ecosystem.
FBA has plenty of advantages that make it a desirable method for building consensus on Flare. Another drawback of Proof of Stake that FBA addresses is that DeFi could theoretically enrich members of the community to the point that decentralization is put at risk. It seems like there are tons of problems Proof of Stake models will have to deal with, and Flare sidesteps them entirely.
FBA makes consensus possible in an extremely decentralized way. As the benefits of decentralization continue to manifest with each passing day, maintaining DeFi as a decentralized financial system is a paramount concern. It’s no wonder Flare has drawn $11.3M in support from big names responsible for shaping DeFi and crypto’s future.