Flare Network - Spark Token and FXRPBy Priyadharsun Sivadasan
Flare Network - Spark Token and FXRP
Flare is a distributed network, which has the unique capability of creating a two way bridge between different networks such as Etherium and XRP Ledger.Currently XRP mainly used for the cross border payments and internet banking settlements as the aim of its parent company Ripple, at the meantime it has been limited for other types of functionalities. This is what Flare network aims to solve by introducing support for smart contracts for the XRP ecosystems.
Flare Network is a distributed network that integrates the Ethereum Virtual Machine (EVM). The EVM basically converts smart contracts into instructions that computers can read which can enable the network to run Turing complete smart contracts. Turing-completeness means that it can run virtually any computational task, as long as there is enough memory to run it. Flare uses a consensus protocol called Avalanche, which has been adapted to work with the Federated Byzantine Agreement (FBA). FBA is a consensus mechanism used by networks such as the XRPL. So, Flare’s consensus algorithm doesn’t rely on economic mechanisms like Proof of Stake (PoS) to maintain the security of the network.
Spark is the native token of Flare, its base use case is similar to other native tokens to prevent spam attacks. The role of the token is to colaterize within decentralized applications (DApps). These tokens will also be used to generate useful data on Flare through an oracle system, and they are also used for network governance and spam prevention. This actually enables an ecosystem of applications that rely on Spark called Spark Dependent Applications (SDA). SDAs can also allow for trustless representations of tokens on other networks, even ones that don’t natively support smart contracts. This is where XRP comes into the picture.
Besides the Flare Consensus Protocol, various other protocols exist on top of the Flare network. One such protocol is FXRP, which is a trustless representation of the XRP token on the Flare Network that can be created and redeemed by XRP holders through smart contracts. This allows users to deploy XRP to Turing Complete programmable smart contracts in Decentralized Finance (Defi) applications. Without Flare, smart contracts on Ethereum don’t have any way to access XRP Ledger addresses as they don’t have any adequate measures to store private keys securely. By creating a trustless channel for XRP into Defi, Flare can also interact with other smart contract blockchain like Cosmos and Polkadot. This approach is very similar to the wrapped Bitcoins available on Etherium as ERC-20.
When XRP tokens are sent to a smart contract address on Flare, the network provides FXRP tokens as a 1:1 collateral secured by Spark. These tokens can be exchanged with ‘redeemers’ for standard XRP tokens at any point.
XRP Flare AirDrops
There is a maximum supply of 100 billion Spark (FLR) tokens. Of these, 45 billion tokens will be given to XRP holders. The distribution will be a simple 1-to-1, with 1 FLR token being awarded to an investor for every 1 XRP they own. The snapshot for the airdrop took place on December 12th. Anyone who was holding XRP at that time is eligible to receive the airdrop.
The first distribution will happen when the Flare mainnet goes live, sometime in Q2 of 2021. Initially, just 15% of the tokens will be distributed. The remaining 85% of tokens will be distributed over the next couple of years. Presumably this is done to reduce selling pressure. Most major wallets have posted guides about how their users can claim their Flare tokens.
Flare’s Unique Selling Proposition
For a smart contract platform to compete with Etherium it has to have a specific reason to attract the users. Flare networks target this via scaling and wrapped currencies.
Scaling - The Avalanche consensus mechanism allows Flare to scale in a way that Ethereum can’t. It’s too early to tell exactly how fast Flare is going to be, but it’s going to be significantly faster than Ethereum.
Wrapped Cryptocurrencies - Flare’s main selling point is that it wants to be the platform with the most tokenized assets.
Flare started this strategy with XRP at this stage, but eventually they would like to bring in other assets as well. Litecoin, Bitcoin, Zcash, Stellar Lumens etc.