Flare Network is a blockchain project that aims to bring smart contract functionality to crypto assets which are issued on blockchains that don’t support Turing-complete smart contracts.
For example, holders of XRP would be able to “bridge” their coins over to Flare Network, where they would be represented with FXRP. These FXRP tokens could then be deployed in decentralized finance applications, which wouldn’t be possible on the XRP Ledger itself. Flare also aims to support other crypto assets that don’t have their own smart contracts, for example Bitcoin, Stellar and Litecoin.
The network’s native asset is called Flare, and has the ticker FLR. Previously, the token was known as Spark Token.
FLR token holders can participate in the governance of Flare Network. The token is also required for contributing to the Flare Time Series Oracle (FTSO), which brings data from outside the Flare Network into the network. For example, the FTSO brings information about a token’s price to the Flare Network. In return, holders of the Flare cryptocurrency receive an “oracle reward”.
Notably, the FLR token is not used in the Flare Network’s consensus process. Flare Network combines the Avalanche consensus protocol and Federated Byzantine Agreement (FBA).
If you’re interested in Flare, you can view an up-to-date FLR price chart, the current price of FLR as well as detailed historical Flare price data on CoinCodex.
Before we continue with a closer look at the FLR crypto, let’s quickly outline some of the most important features of Flare Network.
- Platform that brings smart contract functionality to coins that don’t support smart contracts
- Uses Flare (FLR) as its native token
- The token was initially distributed through an airdrop to XRP holders
- Flare Time Series Oracle (FTSO) uses off-chain data to provide estimates for price pairs
- FLR token holders can provide data to the FTSO to earn rewards
What is Flare and how does it work?
As we’ve already established, the goal of Flare is to let holders of cryptocurrencies that don’t support smart contracts benefit from smart contracts. This can open up exciting new decentralized finance opportunities for holders of coins such as Bitcoin, XRP, Litecoin and Stellar.
Flare achieves this through FAssets, which are representations of coins on other blockchains. For example, the BTC equivalent on Flare would be called FBTC, the XRP equivalent would be called FXRP, and so on. Here are all the different assets for which Flare plans to offer the corresponding FAssets:
To obtain off-chain information such as prices of cryptocurrencies on various centralized exchanges, the Flare Network utilizes the Flare Time Series Oracle (FTSO). FLR token holders can provide data to the FTSO, and receive “oracle rewards” if they provide quality data. Alternatively, holders can delegate their FLR to a data provider to earn a portion of the generated rewards.
Flare also features the State Connector, which is a protocol for acquiring data from external blockchains and using it on Flare. One of the uses of the State Connector is to prove that coins have been locked on the original chain, so a corresponding amount of FAssets can be minted on Flare.
Flare supply
The initial supply of Flare (FLR) is 100 billion tokens. However, the FLR max supply is technically unlimited, as the FLR supply will inflate over time in order to reward users that provide data to the Flare Time Series Oracle. The inflation rate will initially be set at 10% per year, but will then be changeable through governance.
While this inflation mechanism could have a negative impact on the Flare price and the Flare market cap, it will ensure that the network will be able to grow sustainably and provide enough incentives for data providers, which are serving a crucial role.
Flare / Spark Token airdrop
A total of 45 billion FLR tokens, or 45% of the initial supply, was allocated to holders of the XRP cryptocurrency. The XRP coins held by Ripple Labs and some of its former employees were not eligible for the airdrop.
When the airdrop was first announced, the token was known as Spark Token, but the Flare Network team later decided to change the name of the token to Flare. The snapshot of the XRP blockchain to determine eligibility for the airdrop was taken on December 12, 2020.
An interesting aspect of the Flare / Spark Token airdrop is that there was a long period of time between the XRP blockchain snapshot and eligible users actually receiving their FLR coins.
However, some exchanges like Bitrue issued IOUs even before FLR tokens were distributed to the community, establishing a market and giving us a rough idea of the Flare crypto price that we can expect. While the FLR coin price might deviate from the price of the IOUs once the token is actually released, the IOU markets provide a useful baseline.
How is Flare (FLR) connected to Songbird (SGB)?
If you’ve heard of Flare, you might have also heard of a related token called Songbird (SGB). While this might have caused some confusion, the connection between these two tokens is fairly simple. Songbird serves as the “canary network” for Flare, which is similar to how Kusama is a “canary network” of Polkadot.
A canary network is in some ways similar to a testnet, but there’s a crucial difference. Unlike testnets, the coins on canary networks have economic value because they have a strictly defined supply that cannot be changed at will.
Songbird is based on practically the same technology as Flare, but adopts new features more quickly. When the Flare project develops a new feature, it is first added to the Songbird network. If it functions as intended, it can then be added to Flare.
Songbird acts as a testing ground for Flare’s technology, providing an adversarial environment that a testnet couldn’t replicate. In a testnet, attackers would have weak incentives to try and find exploits, since testnet coins have no economic value.
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