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This upcoming 45 billion token airdrop is one of the reasons why retail is pumping XRP

This upcoming 45 billion token airdrop is one of the reasons why retail is pumping XRP

Photo by Marcel L. on Unsplash

XRP has surged over 133% in the past week, and over 150% in the past month alone. But what’s driving up interest in the payments protocol? An upcoming airdrop seems to be the likely answer.

Enter Flare Network and SPARK tokens

Flare Network, a smart contract network, announced its airdrop to XRP holders earlier this year which has caused a surge of interest in the veteran cryptocurrency. The project aims to solve the problem of scalability in smart contract deployment which does not “link token price with safety.”

Flare can be used as a smart contract platform for XRP or as a trustless pipeline for XRP to other networks.

At network launch, a protocol called FXRP will be deployed on top of Flare to safely enable the trustless issuance, usage, and redemption, of XRP on Flare. This will in turn be secured by Flare’s native token, Spark. 

With this, XRP will effectively exist on a Turing complete network and once there, trustless interoperability with other networks is feasible, both through interoperability protocols such as Cosmos and Polkadot or with Ethereum via well-defined bridge protocols. 

So far so good. But why the frenzy to receive Spark? It’s arguably because it’s a governance token that token holders can use to govern the Flare protocol through a voting mechanism. This brings additional value to the token and falls in line with the broader trend of governance tokens being in fashion in the current market.

Spark token dynamics

As per details, 100 billion Spark tokens will be created to mirror the quantity of XRP that exists, meaning the 45 billion XRP tokens in circulation (i.e. the ones that do not belong to Ripple Labs). The objective of the distribution is that XRP holders other than Ripple can claim approximately a 1:1 amount of Spark to their XRP holding.

In addition, 25 billion Spark will go to Flare Networks Limited, Flare’s for-profit organization, and 30 billion Spark will go to the Flare foundation.

Exchanges are expected to support the airdrop in the coming days, giving incentive to their users to buy XRP and further contribute to the markup in prices. These include Hong Kong’s Crypto.com, which announced its support of the airdrop yesterday:

Other exchanges supporting the airdrop are eToro, Bitstamp, BiTrue, and ProBit. Meanwhile, XRP prices are seeing a bit of a cool-off after the vertical 50% price pump.

xrp price
The 15-minute price chart of XRP. Source: XRPUSD on TradingView.com

XRP trades at $0.65 at press time and is down 9% in the past 24 hours.

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Posted In: , Price Watch, Trading

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