The Flare Network is a new blockchain protocol that is scheduled to launch in the first half of 2021. As part of the initial distribution, the network’s native token called Spark (FLR) will be distributed for free to current XRP-holders.
What is an airdrop?
This kind of initial free distribution of a new protocol token is called an “airdrop”. An airdrop is a promotional instrument, where newly created tokens are sent out for free (or in return for a small service) to certain wallet addresses. The intent behind an airdrop is to generate awareness as well as facilitate the usage of the new tokens. Network effects play a crucial role in the success of a new protocol or application, and giving away tokens for free boosts the number of people initially owning and using the token significantly.
A good example for an airdrop is the one that was performed by Uniswap in September 2020. Uniswap, a decentralized exchange for digital assets, introduced their own token called UNI. The token resembles a revenue claim and voting rights associated to the Uniswap protocol. As part of the initial UNI distribution, 400 UNIs (worth around USD 1’500 today) were airdropped to every address that had at least once interacted with the Uniswap protocol.
How does the Spark token airdrop work?
From a total of 100 billion Spark (FLR) tokens that will be created, 45 billion will be distributed to existing XRP holders. A snapshot of the XRP ledger will be taken on December 12th, 01:00 CET and each XRP holder will be eligible to claim 1 Spark (FLR) for every XRP they hold at that point in time. 15% of the claimable amount will be distributed on the launch date of the Flare network (mainnet), with the rest distributed on a monthly basis over the 25-34 months following the launch.
What does this mean for Sygnum clients?
For Sygnum clients who hold XRP, we will make the process of benefitting from the Spark token airdrop as convenient as possible. Sygnum will participate in the Spark token Airdrop Program and claim the corresponding amount of Spark (FLR) tokens on our clients’ behalf. The Spark (FLR) tokens will be made available to our clients once the Flare network is launched and the distribution mechanism in place.
As Spark (FLR) is a new token, no predictions can be made about the initial value/price for 1 FLR. Sygnum has no influence on the price of FLR nor the Flare Network, and consequently cannot guarantee their future value.
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