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Introduction to Flow Ecosystem and Its FLOW Token

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by John Caroline · 10 min read
Introduction to Flow Ecosystem and Its FLOW Token
Photo: Flow

The guide below explains functioning principles of Flow – a fast, secure, and developer-friendly blockchain built to support the next generation of games, apps, and the digital assets that power them.

Non-fungible tokens (NFTs) have been on the frontlines of blockchain networks beyond the year 2021, and date as far back as 2017. The effect of NFTs inclusion in the blockchain ecosystem was the need to build a blockchain that can serve the purpose of supporting NFTs. And Flow blockchain (FLOW) was created to achieve this.

Flow Blockchain Definition

In simple terms, Flow blockchain (FLOW) is a fast, developer-friendly, and decentralized blockchain designed with the basic function of facilitating the growth or expansion of new generation apps, digital assets, and games.

Flow blockchain makes use of a unique, multi-role design that centralizes the merit of scaling the use of sharding. This provides a significant edge by building up speed and throughput while sustaining an environment that is developer-friendly and ACID compliant.

Developers utilize Flow as a useful instrument for creating crypto that is profitable and businesses that are based on crypto. Flow can also be applied to give consumers an independent influence over their data, as well as enable the creation of globally accessible new digital assets variants that can be traded on open marketplaces.

Brief History

Dapper Labs developed Flow blockchain back in 2018 with the aim to address the increased congestion levels in the Ethereum network and its resultant rise in transaction fees. The company uses blockchain technology to experiment and bring new features to the crypto-community and the DeFi space. Its team includes the former founder of Axiom Zen Roham Gharegozlou, CryptoKitties co-founder Dieter “dete” Shirley, Fuel founder Mikhael Naayem, as well as other tech experts.

The Flow blockchain was first launched during the last quarter of 2019 with its Flow Developer Preview. The aim was to allow early smart contract development without bothering about immediately accessing a full network.

Later in the second quarter of 2020, Dapper Labs leveraged the Flow Developer preview to develop NBA Top Shot, and also released the Flow Beta Mainnet V0.1.  The development was focused on NFT collectibles and crypto games. These developments have helped the Flow blockchain emerge as a prominent competitor in the L1 protocol ecosystem.

Since the launch of Flow, Dapper Labs has been working to connect fans all around the world and give consumers the opportunity to become creators. Some of the partners of Dapper Labs include the NBA, Warner Music Group, and the UFC.

Flow Ecosystem

Flow has a multi-role infrastructure designed to serve billions of users globally. Its unique design allows a greater scalability without collapsing the network, thus achieving the required performance for mainstream applications without compromising its decentralization or sharding the system.

Flow ecosystem features popular projects such as CryptoKitties (a game on the Ethereum network in which cats are bred and traded by players), and NBA Top Shot. UFC, Laliga, and NFL collectibles are yet to be released.

Although the popularity of Flow is driven by these exceptional projects, the blockchain’s ecosystem is one that continues to grow and embark on new, exciting, and distinct projects in crypto.

Flow has an outstanding performance rate in relation to the total volume of conducted transactions on the network, in comparison with its counterpart, particularly on the basis of its years of existence.

The active users on Flow number over 3 million in respect of total transactions and active wallets on the platform. Flow has also made huge progress in fast-tracking user activity, as well as made provisions to support the development and deployment activities of onboarding new users on the network.

As of 2022, there are roughly 800 contracts deployed on Flow, and the platform is prominent for drawing in projects in the NFT ecosystem. When compared with other L1s and L2s on Ethereum, Flow appears to lead in its volume of Secondary NFT transactions. A ready example is Flow’s NBA Top Shot, which tanks top amongst popular extant and new NFT projects.

Multi-Node Architecture

Flow applies pipelining – a common technique that considerably scales up productivity by dividing the work of a validator into four roles:

  1. Collection. Collection nodes improve network connectivity and data availability for applications built on the protocol.
  2. Consensus. The consensus nodes are in charge of deciding on the presence and order of all transactions on the blockchain.
  3. Execution. These nodes are required to perform all the computations associated with every transaction.
  4. Verification. Verification nodes keep the Execution Nodes in check.

Consensus and Verification Nodes are the backbone when it comes to the protocol’s security. They leverage economic incentives to maintain the network’s functioning and accountability. If a single dishonest Collection or Execution Node introduces incorrect data, any other role can punish them and trigger recovery from that invalid data.

The Execution and Collection nodes have crucial roles as they optimize the security and scalability of the network. These nodes can also be verified by other roles.

All validators participate in the validation of every transaction in the network, but they do so at their respective stage. This allows validators to specialize for their specific roles in the protocol, thus highly increasing efficiency.

The separation of jobs goes across different validation stages for each transaction, rather than relying on sharding to enhance scalability. The problem with fragmenting a blockchain into interconnected networks is that serializability guarantees are lost, which makes transactions more difficult.

Most users can not validate blocks in all the shards. Whenever they need to interact with a particular shard, they can not verify its entire history of it. By splitting the tasks of a validator into different roles, the Flow protocol scales to higher throughput, and low cost, as well as maintains a community where all participants have an essential role to make the system work efficiently.

Besides, the programmability layer at the Flow protocol allows smart contracts and users to interact with each other in a single transaction. Developers can share their work with other developers.

Resource-Oriented Programming

Flow uses Cadence, a resource-oriented programming language with an easy-to-read ergonomic syntax and a type system that minimizes runtime errors. It is designed to support all interfaces, methods, and transactions including pre- and postconditions, enforcing expected behavior. The Flow protocol has Flow Playground for developers keen to know about Cadence and how to start building applications on it.

This new parading is designed to be secure and easy to use for most developers, as Cadence tracks the ownership of every application that developers make.

There are other tools in the network that users can get their hands on, such as the Flow Go SDK. This tool allows developers to work on backend integration with high scalability. It has become one of the most popular backend programming languages due to its high performance.

The protocol also introduces the Flow JavaScript SDK, designed especially for frontend developers who want to integrate and interact with Flow. Developers can easily create dApps without application binary interface (ABI) and use them for their businesses.

In addition, the protocol is suitable for all developers seeking to build valuable products for the community. Developers can upgrade smart contracts and use Flow Emulator to provide development experience. It has proven to be friendly for mainstream consumers with payments on-ramps using other tokens besides FLOW and fiat as well.

Flow Token

Flow (FLOW) token is the native Flow’s currency and the principal reserve asset of the network. Developers, validators, and users who participate in the network use the FLOW token to earn rewards, and to decide on future changes in the protocol and its governance.

The protocol self-distributes inflation of FLOW tokens without dilution to all token holders and does not need any transactions. Inflation happens daily and does not depend on users’ actions. Inflation allows the application of the token into modern DeFi use cases without diluting holders.

Flow also applies the single-responsibility principle (SRP) from software engineering. In other words, the protocol takes responsibility for the essential distribution functions and allows the Ethereum network to manage everything outside of that.

Notably, the FLOW inflation is commanded by so-called “Eras”. The first one is Genesis which lasts 60 days and is followed by 10 additional Eras, each lasting 365 days.

The daily inflation for the token supply starts at 1% during the Genesis Era and is halved at the end of every Era.

The supply becomes capped when inflation stops, after the completion of the final Era.

The token supply started at 10,000,000 FLOW and will increase to 700,000,000 as the daily inflation occurs over a period of 10 years.

Use Cases

As already explained, FLOW is the native token of the Flow blockchain network. A currency for apps, games, and smart contracts that are built on the network. FLOW can easily be built by developers into their apps for p2p payments, service charges, or rewards to consumers for value created.

As the network builds up, Holders of the token will be able to use it in diverse ways:

  • payment for computation and validation services;
  • exchange medium;
  • participating in governance;
  • as a deposit for data storage;
  • as collateral for secondary tokens.

Flow’s Advantages Over other Blockchains

Dapper Labs designed Flow to support several consumer applications with the necessary throughput to scale to millions of active users. The protocol provides several technical innovations. They are as follows:

  • Scalability. Flow blockchain was created with the aim of addressing the issue of scalability while providing high levels of security and enabling decentralization. To achieve such scalability, Flow blockchain uses the multi-node architecture which divides the work among different nodes in the platform. The use of four separate node types helps in ensuring efficient decentralization and distribution of node operators.
  • Lower transaction fees. Flow was successful in addressing the issue of high transaction fees which is inherent in Ethereum. This is evident in the cost of creating an account at an estimated 0.0001 FLOW and the 0.000001 FLOW from which a transaction fee begins.
  • Philosophy of work. Flow blockchain enables developers to bother less about the technicalities of blockchain and concentrate more on business logic as compared with Ethereum.
  • Modifications on smart contracts. Flow blockchain provides original authors of smart contracts the leverage of making modifications or  updates to the code after deployment before making it immutable

Risks Associated with Flow

An area  of setback that could be pointed out with Flow blockchain is the fact that Flow blockchain operates with a  multi-node architecture, which implies that the node operators are to split the rewards accruing to them, indicating a decreased benefit. For example, Verifiers have to worry more about having to split their reward, so the expected reward for each successful Verifier decreases. From this angle of view, the worst possible scenario is one where everybody in the world is a possible Verifier.


Flow is powering a whole community with a space where everyone has an important role to sustain the protocol. Developers, companies, and ambassadors can join the network to build applications for their consumers. With its scalability, security, and effectiveness, Flow is establishing a sustainable ecosystem for DeFi products for mainstream adoption.



What is Flow?

Flow is a decentralized protocol with a unique multi-chain infrastructure where users can build crypto applications using a handful of features and tools that enhance usability, speed, and scalability. Flow’s blockchain is an Ethereum-based network designed to support internet-scale protocols and apps in order to ensure a user-friendly experience. The protocol has its own FLOW token used by validators, developers, and users to participate in the platform’s governance and earn rewards.

Who is standing behind Flow?

Dapper Labs developed Flow blockchain back in 2018. The company uses blockchain technology to experiment and bring new features for the crypto-community and the DeFi space. Its team includes former founder of Axiom Zen Roham Gharegozlou, CryptoKitties co-founder Dieter “dete” Shirley, Fuel founder Mikhael Naayem, as well as other tech experts.

Since the launch of Flow, Dapper Labs has been working to connect fans all around the world and give consumers the opportunity to become creators. Some of the partners of Dapper Labs include the NBA, Warner Music Group, and the UFC.

How does Flow work?

Flow utilizes a proof of stake consensus mechanism requiring validators to stake a certain number of FLOW tokens to enable them participate in the network.


The uniqueness of the validation procedure on Flowverse comes from the separation of tasks into four types of nodes which are consensus, verification, execution, and collection. The four types of nodes participate in the validation of each transaction.

What is the Flow node architecture?

Flow is split into four separate node types with the aim of achieving significant growth  in speed and throughput. The nodes are;

  1. Collector Nodes that increase efficiency.
  2. Execution Nodes that enable speed and scale.
  3. Verifier Nodes that guarantee correctness.
  4. Consensus Nodes that ensure decentralization.

How is Flow governed?

The community governs the protocol by holding FLOW – the platform’s native token. Developers, validators, and users who participate in the network use the FLOW token to earn rewards, to decide on future changes in the protocol, and its governance.

What is Flow token?

The Flow token is the native currency and the principal reserve asset of the Flow network.

What are the pros and cons of Flow?

The main advantages of Flow are multi-role infrastructure designed to serve billions of users globally, unique design that allows a greater scalability without collapsing the network, as well as dividing of the roles of all validators so they specialized in a single stage of the transaction.

As far as the cons are considered, Flow is not fully decentralized, as the inflation process and the token are handled by the protocol.

What are the top projects on the Flow Blockchain?

Some of the top projects on the Flow Blockchain are NBA Top Shot and CryptoKitties.

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