FLIF does support a "lossy" encoding method too. The compression FLIF uses (MANIAC Trees) predict what the next pixels will be. If you modify your pixels a small amount so they will be closer to what FLIF expects it will compress much better but still look very similar to the original image. The stored version with the modified pixels would be losslessly stored, in the sense that it perfectly reproduces your image with the modified pixels. But it's lossy in the sense that you had to change the pixels in the first place to better benefit from the way FLIF analyzes and compresses images. The major benefit to this type of lossy compression is that the image doesn't degrade with multiple saves, unlike JPG, where each save compounds the artifacts, causing the "Xerox effect". Here's a video of how FLIF benefits from it's style of lossy encoding:
