Flare, the project that airdropped tokens to holders of the native token of the XRP Ledger, $XRP, who were holding onto their tokens at the time of a network snapshot back in December 2020, is set to burn 2.1 billion of its own $FLR tokens in a bid to support its ecosystem’s health and development.
According to CoinDesk, a developer at Flare revealed that more than 2% of FLR’s total supply will be permanently removed from circulating in the move, which will prevent dilution of community token holdings and raise incentives for new users to join the network.
The tokens set to be burned were set aside for Flare’s early backers but the firm agreed to burn those tokens instead. It came to this agreement after consulting with its backers about the first Flare Improvement Proposal, FIP.01, and how it impacts token distributions to equity shareholders.
Flare will burn nearly 198 million FLR initially, with a further 66 million to be burned per month until January 2026. According to CryptoCompare data, FLR is currently trading at $0.009 per token, which would mean the value of the token burn would be around $20 million.
As CryptoGlobe reported, earlier this year, Nasdaq-listed cryptocurrency exchange Coinbase announced it was listing FLR in a highly anticipated move that comes after the exchange revealed it’s honoring its commitment to support the FLR token airdrop.
Flare network is a blockchain bringing smart contract functionalities to XRP and other cryptoassets that do not yet have them, although it’s bringing these in through a separate blockchain than the XRP Ledger.
Spark tokens are to 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.”
Notably, Coinbase was one of the cryptocurrency exchanges that delisted $XRP after the U.S. Securities and Exchange Commission (SEC) sued Ripple and two of its executives alleging they sold unregistered securities when they issued $1.3 billion worth of XRP tokens. Ripple denies XRP is a security.
Last year Coinbase said its self-custody crypto wallet app Coinbase Wallet would be dropping support for four major cryptoassets, including XRP, from January 2023 over “low usage.”
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