Question 1

What is FUEL?

Accepted Answer

FUEL is the utility token of Fuel's decentralized sequencing network. Its intended uses are to provide staking security for the sequencing network and settle resources for rollup data availability, transaction sequencing, and block inclusion; therefore, it is not an asset that generates a fixed return merely by being held.

Question 2

What is FUEL used for?

Accepted Answer

FUEL is used to pay for resources required when Fuel sequencers process rollups, including data availability, transaction sequencing, and services for including blocks on-chain. Resource users or applications settle for these sequencing services, and the role of the associated network fees is to provide an economic foundation for an open decentralized sequencing network.

Question 3

Can FUEL be staked?

Accepted Answer

FUEL's sequencing network uses a Tendermint-based proof-of-stake design: holders can delegate FUEL to sequencing proposers, proposers participate in the security and consensus of the sequencing network, and delegators share staking rewards according to the rules. Rewards are not generated by simply holding tokens, but depend on the delegation relationship, the network's reward rules, and the proposer's actual participation; the documentation lists validator participation and staking as mechanisms launched with Fuel Genesis.

Question 4

How is FUEL supply structured?

Accepted Answer

FUEL has a genesis supply of 10 billion tokens and an annual inflation schedule of 3%. Genesis supply is the quantity at launch and is not equivalent to the circulating supply at any given time; new issuance each year changes the total supply, while inflation and Fuel's economic parameters are configured by the sequencer validator set.

Question 5

How are FUEL tokens allocated and unlocked?

Accepted Answer

The 10 billion initial supply is allocated as follows: 2 billion tokens for community expansion, 1.55 billion tokens for the immediate ecosystem and R&D allocation, 1.55 billion tokens for the locked ecosystem and R&D allocation, 600 million tokens for the contributor 24-month allocation, 980 million tokens for the contributor 48-month allocation, and 3.31 billion tokens for early purchasers. The community expansion and immediate ecosystem and R&D allocations unlock immediately; the locked ecosystem and R&D allocation, contributor 24-month allocation, and early purchaser allocation all unlock linearly over 24 months, while the core contributor allocation unlocks over 48 months. Therefore, initial allocation proportions cannot be treated directly as immediately tradable supply.

Question 6

How does FUEL affect user transaction fees?

Accepted Answer

Applications can use application-specific sequencing services supported by FUEL staking to place part of sequencing costs on the application side, allowing end users to receive a near gas-free experience; this does not mean that all transactions on Fuel are gas-free in FUEL. Official documentation also states that Fuel Ignition continues to charge gas fees in ETH. Who ultimately pays and what fees are paid depend on the network layer used and the application's fee design.

Question 7

Can all locked FUEL participate in staking?

Accepted Answer

Not all locked FUEL can be staked. The 1.55 billion locked tokens in the ecosystem and R&D category, which unlock linearly per block over 24 months, can be staked, and their staking rewards are restricted to ecosystem development and L2-layer incentives; locked tokens held by team members and early purchasers cannot be staked. Eligibility therefore depends on the token's allocation category, not only on whether it is in a lock-up period.

Question 8

What is the difference between Fuel V1 and current FUEL?

Accepted Answer

Fuel V1 is the legacy token, with an initial supply of 100 million tokens; the genesis supply of the current FUEL is 10 billion tokens. The official upgrade arrangement exchanges 1 Fuel V1 for 100 current FUEL, so the token version must first be confirmed when comparing balances, supply, or price units; the legacy supply figure of 100 million tokens cannot be directly applied to current FUEL.

Question 9

Will holding or staking FUEL definitely generate returns?

Accepted Answer

Not necessarily. Staking rewards come from the reward distribution of the sequencing network, and holders need to obtain the corresponding share through delegation or validator participation; reward rules, whether tokens are eligible for staking, and network participation all affect the outcome. Even if token-denominated rewards are received, their value denominated in fiat currency or other assets will still fluctuate with the market price of FUEL.

Question 10

What is the role of FUEL's application-specific sequencing mechanism?

Accepted Answer

FUEL's application-specific sequencing expands sequencing services from a single centralized sequencer into a network resource layer that applications can adopt: applications settle for the sequencing resources they need, and FUEL staking provides the economic security foundation for the sequencing network. It seeks to address rollups' reliance on centralized sequencing services; whether an application bears costs or allows end users to avoid paying a certain type of fee still depends on that application's specific implementation.

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