Flare to Burn 2.1 Billion FLR Tokens to Support Ecosystem
Flare, the project that distributed airdropped tokens to XRP holders, is planning to burn 2.1 billion of its own FLR tokens. This move aims to maintain the health and development of the Flare ecosystem. According to a developer at Flare, over 2% of FLR’s total supply will be permanently removed from circulation through the burn. This will prevent dilution of community token holdings and incentivize new users to join the network.
Token Burning Details
The tokens set to be burned were originally allocated for Flare’s early backers. However, after consulting with these backers about the first Flare Improvement Proposal (FIP.01) and its impact on token distributions, the decision was made to burn these tokens instead. The burning process will begin with nearly 198 million FLR tokens and continue with an additional 66 million per month until January 2026. The estimated value of the token burn is around $20 million.
Flare Network and Spark Tokens
The Flare network is a blockchain that brings smart contract functionalities to cryptoassets like XRP. It operates on a separate blockchain from the XRP Ledger. Spark tokens are used for governance on the Flare network through voting mechanisms. Token holders can earn returns by committing Spark tokens as collateral to secure the trustless issuance and redemption of FXRP, a protocol designed for safe usage and redemption of XRP on Flare.
Coinbase’s Involvement
Coinbase recently listed FLR on its platform, honoring its commitment to support the token airdrop. This move generated significant anticipation in the crypto community. It is worth noting that Coinbase previously delisted XRP due to a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Ripple and its executives, alleging the sale of unregistered securities. Ripple denies that XRP is a security. Coinbase Wallet, the exchange’s self-custody crypto wallet app, will also drop support for XRP and other major cryptoassets from January 2023 due to low usage.
Hot Take: Flare’s Token Burning Initiative
Flare’s decision to burn 2.1 billion FLR tokens demonstrates its commitment to maintaining the value and integrity of its ecosystem. By removing a significant portion of the token supply from circulation, Flare aims to prevent dilution and create stronger incentives for new users to participate in the network. This move aligns with Flare’s goal of bringing smart contract functionalities to cryptoassets like XRP and showcases its dedication to building a robust blockchain ecosystem.
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