The third-largest cryptocurrency by market capitalization, XRP, has seen its price surge over 174% over the last 30 days ahead of an upcoming token airdrop that will reward XRP holders with Spark tokens on a 1:1 ratio according to their holdings.
Data from CryptoCompare shows that the price of XRP went from about $0.2455 per coin while it is currently trading at $0.644. The price of the cryptocurrency hit a yearly high earlier this month at $0.75 but faced a steep correction along with the rest of the crypto market after BTC failed to hit a new all-time high.
While the cryptocurrency’s price is certainly benefiting from a wider bull run in the cryptocurrency space, it’s also likely greatly outperforming other top cryptocurrencies like BTC, ETH, and BCH thanks to the upcoming Spark token airdrop.
The cryptocurrency’s performance has seen the number of new account activations on the XRP Ledger rise more than 200% to a record high above 5,560 in the last five days, according to XRPScan, as new investors are likely moving into XRP to receive airdropped Spark tokens.
Spark tokens will be used for governance on the Flare network through voting mechanisms, and token holders will be able to earn a return on their holdings by committing Spark tokens as collateral to secure the trustless issuance and redemption of FXRP, a protocol built to “safely enable the trustless issuance, usage and redemption, of XRP on Flare.”
Token holders will also be able to earn a return on their holdings by contributing data to the Flare time series oracle. The Flare Network itself integrates the Ethereum Virtual Machine (EVM) and does not derive safety from a token.
It will essentially bring Ethereum’s decentralized applications, smart contracts, and decentralized finance into the XRP ecosystem. It’s supported by Ripple’s investment arm RippleX, formerly Xpring.
Speaking to CoinDesk a managing partner at the Hong Kong-based blockchain investment firm Kenetic Capital, Jehan Chu, said:
With the imminent launch of Flare, a smart contract utility fork of XRP, the pair will attempt to challenge Ethereum’s dominance in decentralized finance and decentralized applications.
All of this means XRP holders may have real reasons to be excited about the launch of the Flare Network, and eager to get their hands on Spark tokens. A total of 100 billion Spark tokens will exist, and 45 billion will be claimable by existing XRP holders, excluding Ripple Labs itself.
XRP holders can claim one Spark token per every XRP token they hold. An additional 25 billion tokens will go to Flare, and 30 billion are going to a non-profit foundation called the Flare Foundation. The Foundation, it’s worth noting, has written in its constitution it must be wound down and all of its Spark tokens burned if token holders agree is existence is no longer beneficial to the network.
It’s also worth pointing out that Flare Network has been involved in the cryptocurrency community and helped boost XRP. Responding to former Goldman Sachs executive Raoul Pal, who said he was warming up to XRP, Flare pointed out its network will bring smart contracts to the XRP ecosystem.
Most major cryptocurrency exchange have already announced support for the airdrop, with OKEx seemingly being the latest. Per OKEx, there will be a snapshop of the XRP blockchain on December 12 at 12:00 am UTC, and the SPARK tokens will be distributed in the first half of 2021.
While the price of XRP has been surging ahead of the airdrop, the amount of XRP being sent to cryptocurrency exchanges has also went up, according to Chainalysis’ Chief Economist Philip Gradwell.
Large exchange inflows often mean users are looking to sell their tokens, but in this case they are presumably looking to take advantage of the airdrop, even though it’s possible to receive the tokens if they self-custody.
It’s worth noting that sending the tokens to cryptocurrency exchanges like OKEx may be an advantage for users looking to capitalize on their holdings. On the exchange’s platform, via the Earn program, it’s possible to earn 1.12 APY on XRP holdings, which means that if a user holds 1,000 XRP they are expected to receive 0.033 XRP per day.
Featured image via Pixabay.