2026.08 The First Halving: FIP-101, FIP-102, and Our Long-Term Commitment

The First Halving: FIP-101, FIP-102, and Our Long-Term Commitment

After more than six months of development, testing, and coordination, FIP-101 was officially activated on August 6.

It has been a long process, but an important one. The rollout has been smooth, and indexing is now an incentivized, permissionless part of the Fractal network. Anyone can participate by operating an indexer or staking FB, and the people who help support this infrastructure can now share directly in the network’s block rewards.

As Fractal approaches its first halving, I want to speak openly with the community about what comes next.

There are several connected decisions to explain: what will happen to the remaining FIP-101 rewards, what we are proposing through FIP-102 and FIP-103, how the second-year Community and Ecosystem allocation will be handled, and how UniSat intends to demonstrate its own long-term commitment to FB.

1. Recognizing FIP-101’s earliest supporters

Before FIP-101 reached full activation, it went through several stages of pre-testing and Public Testing. During that period, FB accumulated in the reward pools but was intentionally not distributed while the system was still being developed, tested, and validated.

That testing would not have been possible without the people who participated early.

Some community members staked their FB before the system had been fully proven. Indexer Operators committed infrastructure, submitted proofs, and worked with us through each stage of the rollout. Their participation helped us identify problems, refine the system, and bring FIP-101 to full activation smoothly.

We believe they should be meaningfully recognized. A portion of the accumulated rewards has therefore been allocated to eligible early stakers and Indexer Operators through the Early Supporter Rewards announced yesterday. Claiming is now open.

After those rewards have been allocated, the remaining FB is held in two publicly verifiable addresses:

FIP-101 legacy rewards

Amount after Early Supporter Rewards: 2,022,846 FB
Address: bc1p8tnakrwv9mn0nud6cldjcacxrtrcessvqr90gqadwazldmsyqvpsz7wa7p

Undistributed Public Testing rewards

Amount: 578,695 FB
Address: bc1plamv6ynv4tt4ez4k8za7xrk4d2s8fpxdjturhfysnudzgzjazgvqls9kt0

We have decided that all FB remaining in these two pools will be permanently burned when Fractal’s first halving is activated, currently expected around September 9, 2026.

None of these FB will enter circulation.

The early participants who helped build and validate FIP-101 will be rewarded. The undistributed balance will be removed permanently. We believe this is the clearest and fairest way to conclude the testing phase and begin FIP-101’s next chapter.

2. What comes next: FIP-102 and FIP-103

Tomorrow, we will publish the draft of FIP-102.

FIP-101 changed how block rewards are distributed on Fractal. It expanded participation beyond traditional proof-of-work mining by allowing Indexer Operators and ordinary FB holders to support the network and share in its rewards.

FIP-102 is the next step in that evolution.

Under the proposal, 50% of token issuance following the first halving will be reallocated to support the issuance of native FB on Bitcoin mainnet.

From the perspective of Fractal mainnet, the result will resemble two consecutive halvings taking effect together:

The scheduled first halving will reduce the block reward from 25 FB to 12.5 FB.
Half of the remaining issuance will then be reallocated to Bitcoin mainnet, leaving 6.25 FB per block to be distributed on Fractal.

An equivalent issuance budget of 6.25 FB per Fractal block will support participation and distribution on Bitcoin mainnet.

I want to be very clear about what this means: it does not expand the total supply of FB. It changes where and how the existing issuance is distributed.

The thinking behind this proposal is straightforward. Fractal was built to extend Bitcoin, and we believe Fractal should serve Bitcoin more directly. Bringing native FB to Bitcoin mainnet gives us a way to distribute FB through real Bitcoin-native activity and to expand its utility beyond Fractal itself.

Over time, native FB on Bitcoin could support fair distribution mechanisms, native DeFi, decentralized exchanges, and other applications built directly around Bitcoin assets.

FIP-103 will define the specific distribution mechanism and how this allocation is progressively brought into circulation.

The two proposals are closely connected:

FIP-102 establishes the issuance reallocation required to introduce native FB on Bitcoin, and is expected to activate with the halving.
FIP-103 defines how that allocation will reach users and enter circulation, while the mechanism proposed will roll out progressively afterward.

We separated them into two proposals because each decision deserves to be understood and discussed properly. One concerns where issuance is allocated; the other concerns how that allocation is distributed. Keeping them separate allows the community to evaluate both clearly.

And as with FIP-101, we will approach this carefully. There will be a public proposal, community discussion, implementation, testing, and then activation. These changes are too important to rush.

3. The second-year Community and Ecosystem allocation

I also want to explain clearly how the Fractal Treasury’s second-year Community and Ecosystem allocation will be handled.

The total allocation is 3,150,000 FB, held at the following publicly verifiable address:

bc1pf6826e9eaf7re627z8j03uzx3msdzckws7amg9patds5msvzzg0se703w4

Of this amount:

150,000 FB will be reserved for the Fractal Bug Bounty and Builder Bounty programs, which will be announced soon.
1,500,000 FB will be transferred to the Fractal Vault.
1,500,000 FB will be permanently burned.

We still believe strongly in supporting the people who build for Fractal. But that support should be active, accountable, and connected to real contributions.

Going forward, Community and Ecosystem funds will continue to support bounty programs, builders, and Index Mining contributors who create measurable, long-term value for the network. The objective is not simply to distribute funds, but to use them where they can genuinely strengthen Fractal.

4. Burning 4,101,541 FB at the first halving

Taken together, these decisions mean that a total of 4,101,541 FB will be permanently burned when Fractal reaches its first halving:

2,022,846 FB in remaining FIP-101 legacy rewards
578,695 FB in undistributed Public Testing rewards
1,500,000 FB from the second-year Community and Ecosystem allocation

Every relevant address and transaction will remain publicly verifiable on-chain.

This is not intended as a short-term gesture. These are tokens that will never enter circulation. The purpose is to close out unused historical allocations responsibly, reduce future supply pressure, and make the network’s commitments visible and verifiable to everyone.

5. UniSat’s long-term FB acquisition plan

Finally, I want to explain how UniSat itself intends to demonstrate its long-term conviction in Fractal.

Following the halving, UniSat plans to acquire USD 200,000 worth of FB from the open market each month for five consecutive months, for a total planned acquisition of USD 1,000,000.

This program will be funded entirely with UniSat’s discretionary funds. It is separate from the Fractal Treasury, and no community or ecosystem funds will be used.

Each month’s purchases will be deposited into a separate public address, creating five publicly disclosed reserve addresses in total.

The acquired FB will be held as a long-term strategic reserve and locked on-chain for at least five years.

When the program begins, we will publish the addresses and provide an on-chain-verifiable commitment confirming that none of the FB held in them can be sold or transferred during that period.

We do not want the community to rely only on statements of confidence. We want that commitment to be visible in our actions, committed on-chain, and verifiable by anyone.

What We’ve Learned—and Where We Go From Here

When Fractal launched, we deliberately chose a model closely aligned with Bitcoin: proof-of-work mining, together with merged mining that allows Bitcoin miners to secure Fractal.

That model proved its strength. Major Bitcoin mining pools joined the network, and at its peak, participating pools represented close to 80% of Bitcoin’s hashrate.

But operating Fractal also taught us something important: security alone is not enough to create sustainable tokenomics.

A network cannot thrive over the long term if its incentives are not sufficiently aligned with the people who use it, build on it, and maintain its infrastructure. Its native asset must reflect the activity and value being created across the ecosystem—not only the resources contributed by miners.

We believed a change was necessary, but also that it had to be made carefully. Tokenomics cannot be repaired through short-term decisions or isolated adjustments. Any change must be technically workable, publicly verifiable, and sustainable over time.

FIP-101 was the first step. It opened block rewards to stakers while establishing a standardized, permissionless indexing system that anyone can join. The strong participation in Index Mining—and the corresponding reduction in miner selling activity—gives us confidence that this direction is working.

FIP-102 and FIP-103 will take that work further. They aim to distribute FB more directly to real users through on-chain participation and extend FB’s utility to Bitcoin mainnet without increasing its total supply. The first halving will strengthen this transition further.

These are significant changes, and we do not take them lightly. They are the result of what we have learned from building and operating Fractal in the real world.

Our commitment is not simply to preserve Fractal as it was designed on day one. It is to keep improving the network responsibly—while remaining aligned with Bitcoin, transparent with our community, and accountable through public proposals and on-chain actions.

FIP-101 is now live. The first halving is approaching. FIP-102 and FIP-103 will soon enter public discussion.

This is the beginning of Fractal’s next stage, and we intend to build it with the same patience, openness, and long-term conviction that brought us here.

References

E-2608 (Lorenzo’s Library)
Creative Commons BY-NC-ND 4.0