Flow (FLOW) Q1 2025 Key Insights

Flow (FLOW) is a Layer-1 network that was founded in 2018 by Dapper Labs and its founders, Roham Gharegozlu, Dieter Shirley, and Mikhael Naayem. Flow launched in May 2020 and was designed for "a new generation of games, apps, and the digital assets that power them." Flow was one of the first networks to implement account abstractions and user experience enhancements that made it easier for developers to onboard consumers. Today, Flow’s top applications include those based on world-class brands, such as NBA Top Shot and NFL All Day.

On Flow, developers use "Cadence," Flow's novel programming language. Flow's most recent development took place in March when Flow activated a rolling protocol upgrade system on mainnet. This mechanism coordinates behavior changes at predetermined block heights, so nodes can verify compatibility and upgrade without interrupting block production. By eliminating most downtime, rolling upgrades strengthen network resilience, streamline future releases, and let developers ship improvements faster. The new system builds on earlier Height-Coordinated Upgrades and marks Flow's first major step beyond the Crescendo release. In September 2024, Flow introduced Cadence 1.0 with the Crescendo upgrade, bringing EVM equivalence to Flow via a separate Flow EVM environment. Now, developers can use Solidity to build on Flow EVM with block times of 800 milliseconds. Furthermore, developers can tap into existing tools and liquidity across the EVM, while users experience sub-cent transaction fees.

Flow has played a significant role in onboarding consumers into crypto by pioneering the ERC-721 token standard via CryptoKitties in 2017 and putting NFT collectibles into the mainstream via NBA Top Shot in 2021. Today, Flow continues to innovate and be a foundational part of the industry’s effort to bring new users into the space. For a full primer on Flow, refer to our Initiation of Coverage.

Key Metrics

Financial Analysis

FLOW is the native token of Flow that is used (i) as the primary medium of exchange on Flow and (ii) for staking to facilitate various staking-related functions. In Q1 2025, FLOW's price fell 45.2% QoQ to $0.38, its lowest close since Q3 2024. That pullback cut circulating market capitalization by 44.5% to about $0.6 billion, while circulating supply edged up 1.2% to 1.57 billion FLOW in line with the protocol's weekly inflation schedule. FLOW's circulating market cap ranking fell from 89th to 92nd.

FLOW is used to settle network transaction fees on Flow. The total transaction fee for any transaction on Flow comprises a variable "execution fee" plus a fixed "inclusion fee," which is then multiplied by a "surge factor." Network transaction fees cooled after the Q4 hackathon-fueled spike (discussed later in report). Total quarterly fees in USD dropped 12.5% to $1,152, and fees in FLOW slipped 4.5% to 1,614. Yet average daily fees climbed 49.1% to $21.34. A burst of activity in early January lifted the daily average even as transactions eased through February and March.

FLOW's initial token supply was 1.25 billion upon Flow's "Mainnet v1" launch in October 2020. However, the total token supply experiences inflation once per epoch (approximately once a week) due to inflationary staking rewards distributed to Flow's validator nodes and delegators. Inflation over an annual period is equivalent to 5% of FLOW's total token supply.

As explained in our Initiation of Coverage, combined weekly staking rewards comprise all network transaction fees, with any remaining amount being minted as inflationary staking rewards.

As of March 31, 2025, FLOW's total token supply has increased to 1.57 billion, and weekly inflation equates to approximately 1.47 million FLOW per week. 602.4 million FLOW (38.3% of the total token supply) was staked, down 10.1% from 670.5 million in Q4.

Network Analysis

Flow's Q1 adoption demonstrated the network's capacity to scale around major developer events. Average daily transactions reached 277,782, up 10.6% from 251,100 in Q4, while average daily active addresses climbed to 66,822, versus 27,438 in Q4. This left the average transactions-per-address ratio relatively unchanged at 9.1 (vs. 9.2 in Q4). This uptick in activity was driven