The milestone activated FIP-102, a consensus upgrade that changes how future FB emissions are distributed while preparing the token for distribution on Bitcoin. The proposal does not raise FB’s total supply or create a separate supply for tokens distributed through Bitcoin.
Under FIP-102, Fractal’s first scheduled halving reduced the block reward from 25 FB to 12.5 FB. The proposal simultaneously brought forward the network’s second halving, cutting the reward available on Fractal again to 6.25 FB.
The remaining 6.25 FB per Fractal block equivalent has been allocated to a Bitcoin mainnet distribution budget. That allocation will not immediately be distributed at its full rate, with the project planning a progressive rollout after the upgrade.
Fractal Bitcoin halving activates FIP-102
FIP-102 keeps Fractal’s existing reward structure between Merged Mining, Permissionless Mining and Index Mining. Blocks on the Fractal side will continue to be assigned to the three mechanisms at a 1:1:1 ratio, meaning one block in each three-block cycle goes to each category.
Before the halving, Fractal emitted 25 FB per block. Each of the three mechanisms therefore received an average allocation of roughly 8.33 FB per block when measured across the three-block cycle.
Following FIP-102, each eligible Fractal block now carries a 6.25 FB reward. Averaged across the block sequence, Merged Mining, Permissionless Mining and Index Mining each account for approximately 2.0833 FB per Fractal block.
The second 6.25 FB allocation will eventually be distributed to users through eligible activity on Bitcoin mainnet. FIP-102 establishes the emission budget, while the specific activities, technical architecture and distribution rules are being left to the upcoming FIP-103 proposal.
Fractal said it will continue monitoring the network following the halving and asked users experiencing service-related problems to contact the team.
The reward reduction follows the same basic supply mechanism used by Bitcoin, where scheduled halvings periodically reduce new issuance. Bitcoin itself currently pays miners 3.125 $BTC per block following its April 2024 halving, with its next reward reduction expected around 2028. As crypto.news previously explained, Bitcoin’s block subsidy falls by 50% every 210,000 blocks, slowing the rate at which new $BTC enters circulation.
FB distribution is moving to Bitcoin mainnet
The Bitcoin allocation under FIP-102 is designed to let users obtain FB through eligible interactions directly on Bitcoin rather than limiting new distribution to activity on Fractal.
A 1:1 conversion mechanism between FB on Fractal and FB on Bitcoin mainnet is planned under the same framework. Converting a token between the two environments will not generate an extra unit of FB, according to the proposal, keeping both versions within one unified supply.
The project plans to introduce Bitcoin-mainnet distribution progressively over roughly three months. Research and implementation work will continue for three to six months, with testing scheduled to begin in the fourth quarter of 2026 and a full rollout targeted for the first quarter of 2027.
FIP-103 will provide the remaining technical details, including eligible interactions, distribution mechanisms, rollout requirements and the process for converting FB between Fractal and Bitcoin.
The mainnet distribution plan expands on Fractal’s existing relationship with Bitcoin miners. In April 2025, Fractal added Foundry to its merged-mining network, giving the protocol access to computing power equivalent to 93% of Bitcoin’s hashrate at the time. Fractal and Bitcoin both use SHA-256, allowing miners to secure the two networks through merged mining without dedicating separate computing power to each chain.
Fractal uses its Cadence Mining model to prevent merged miners from receiving the entire block reward. The model divided rewards between Bitcoin merged miners and permissionless participants before Index Mining was incorporated into the current three-way allocation.
Fractal has expanded its Bitcoin mining links
Binance Pool began supporting Fractal Bitcoin merged mining in November 2024, allowing Bitcoin miners using the service to receive FB rewards in external wallets. Binance said at the time that support for FB mining did not mean the exchange planned to list the token.
Fractal’s mainnet had launched in September 2024 using Bitcoin Core code and the same SHA-256 hashing algorithm as Bitcoin. Its genesis block carried the same newspaper headline embedded by Satoshi Nakamoto in Bitcoin’s genesis block.
The network has since been used as infrastructure for Bitcoin-focused applications. UniSat, for example, built its Hexa trading engine on Fractal Bitcoin. UniSat said the infrastructure offered additional block space and 30-second confirmation times while supporting trading of Bitcoin-based assets.
FIP-102 changes the emission schedule supporting that network without increasing the approved FB supply. At full rollout, the combined target emission budget will remain equivalent to 12.5 FB per Fractal block, split evenly between 6.25 FB in Fractal-side block rewards and a 6.25 FB equivalent budget for Bitcoin-mainnet distribution.
Future reward milestones will follow the revised schedule. The next Fractal block-reward halving is set for block 4,200,000, after which the target allocations for both the Fractal and Bitcoin distribution paths are expected to decline proportionally unless a later Fractal Improvement Proposal changes the mechanism.
