The 16th Gyalwa karamapa H.H Rangjung Rigpe Dorjee spiritual leader of Kagyupa sect of Tibetan Buddhism was well known for his vision and Prophesies designed this flag from his vision that came to him in dream.He called it 'Namkhyen Gyaldar(Namchen) meaning the victorious flag of Buddha's wisdom.He proclaimed,"wherever this banner is flown the Dharma will flourish".
At the level of relative truth, the blue is the sky (heaven), symbolizing spiritual insight and vision, and the yellow is the earth, the actual world of our everyday experience. The symmetry of the wave pattern shows how we come to understand their interdependence when we practice the dharma.
As a reminder of absolute truth, the blue symbolizes the wisdom, or emptiness aspect of awakened being, while the yellow stands for the compassion aspect. The wavy intermingling of the two colors represents their inseparability.
The interdependence shown in the flag can also be seen as the wisdom of Mahamudra, the ultimate realization of ones true nature.