As the premier consumer L1 network, Flow has proven that incubating killer apps is as vital as fostering a robust, open infrastructure. Flow launched its network with groundbreaking partnerships, beginning with NBA Top Shot (reaching $1b in ARR within the first year), and later expanding to include global brands like the NFL, Disney, and Live Nation.
This vertically integrated strategy has resulted in the successful onboarding of over 15 million consumers and the minting of over 200 million digital assets, cementing Flow as the pioneer in consumer adoption with its unparalleled onboarding experience.
Over the last year, Flow has been strategically laying the groundwork for its next significant chapter. Leveraging mature DeFi rails from proven projects and the extensive consumer expertise already on the Flow Foundation and Dapper Labs teams, Flow is ready to spearhead a new era of consumer finance: transforming DeFi into practical, everyday financial solutions to benefit everyday users.
The Next Phase: Consumer DeFi
DeFi infrastructure has matured, but the user experience remains hostile. Current platforms cater exclusively to crypto-natives, demanding technical mastery to survive unlimited risk.
To unlock the consumer era, Flow is evolving the stack. Friction is being replaced with protocol-level safeguards and speculation with sustainable sources of yield. This is true Consumer DeFi: delivering safe financial products and robust, risk-adjusted yield opportunities directly to every individual.
The foundation has been laid. In the past year, Flow has been one of the fastest-growing L1 networks in terms of developer adoption and pushed the pivotal 'Forte' upgrade that introduced onchain automation for self-executing logic. Furthermore, the ecosystem saw a 500% year-over-year increase in total value locked (TVL) to over $100M,
Source: Defillama
Network Value Accrual: Enshrined Protocols
A key challenge during the previous period of rapid growth on Flow was the disconnect between network value accrual and consumer adoption. To better align the ecosystem with our most dedicated believers, a new architectural element is being introduced: enshrined protocols.
Enshrined protocols are not just apps; they are public utilities hardened directly into the network foundation. In DeFi, these protocols enable ecosystem-wide shared liquidity and pooled markets for each vertical to prevent liquidity fragmentation and ease the initial cold-start problem for ecosystem partners.
Flow Foundation is developing a series of key enshrined protocols starting with the credit market. Future protocols may include perpetuals and prediction markets among others. These protocols will be open financial primitives powering the new wave of Consumer DeFi applications targeting mainstream adoption.
Each enshrined protocol will be bootstrapped with one or more flywheel applications built by Dapper Labs or other strategic ecosystem partners.
Flywheel Effect: Protocol and App
Flow Credit Market - The first enshrined protocol developed by Flow Foundation is Flow Credit Market (FCM), the canonical Flow automated lending protocol. FCM represents a step-function improvement for DeFi. By leveraging the native on-chain scheduling capabilities on Flow to set recurring triggers without external oracles, FCM maximizes loan-to-value while minimizing liquidation risk, driving higher yields naturally, for lenders and borrowers alike Internal simulations show the protocol would have protected user deposits from liquidation during all previous market crashes of the past five years.
Peak Money - To jumpstart FCM, Dapper Labs is introducing Peak Money, a flywheel application for consumer finance. Peak Money is designed to be the gateway for the next 100 million users into crypto. It harnesses yield opportunities across chains and makes them accessible to a mainstream audience through a seamless, mobile-first experience. Peak Money is opening its waitlist today at peak.money.
This is the ecosystem’s new standard:
- Flow Foundation builds the permanent utility.
- Dapper Labs or other strategic partners launch the flywheel application(s) in parallel.
- The community inherits a robust, liquid foundation with a revenue model that supports the underlying network.
The Flow Foundation is always on the lookout for strategic design partners to collaborate on the co-architecture, governance, and development of these new, enshrined protocols. If you are an established consumer app studio or structured product underwriter, please reach out to us partnerships[at]flow.com.
Sustainable Economics: The Fee Update
The initial transaction fee structure on Flow was established to encourage consumer adoption by keeping costs minimal, thus eliminating onboarding friction. This strategy successfully supported rapid adoption and fostered the network's maturity through a wide array of applications.
Flow is now transitioning into its second phase as a mature network. Following the launch of automated strategies enabled by FCM, a significant increase in transaction volume is anticipated, partly due to the on-chain scheduler. Therefore, a network-wide fee update is being implemented. This represents a strategic pivot from subsidized growth to a deflationary token model and self-sustaining value accrual.
This update creates a direct link between network usage and network value. In fact, this model is designed to make the FLOW token net deflationary at a sustained 250 TPS, which the network is expected to reach through FCM. Peak Money and other consumer DeFi apps in the near term via their frequent on-chain rebalancing on behalf of their users.
Thanks to the architectural efficiency of Flow, even with this increase, transaction costs remain far below other networks including Solana and Base, without compromising on decentralization. Flow remains one of the only blockchains capable of scaling to millions of daily active users without punishing developers and users with volatile, unsustainable gas spikes.
Toward the Future
The next wave of crypto adoption will be defined by consumer applications that are easy to use yet hard for TradFi to replicate. It is time to take DeFi mainstream and power the next era of consumer finance. Join us!
Go WTF (with the Flow)
Website: flow.com
Community: t.me/flow_community
Dev community: https://discord.com/invite/J6fFnh2xx6
