During these last few weeks we have written cryptocurrency training articles on fundamental topics for operating within the cryptocurrency ecosystem. From usage and operation guides of two of the most used wallets in the ecosystem (Metamask y Ledger), tips to avoid falling into the most common scams and the operation of crypto assets such as stablecoins. Today's cryptocurrency training article will be dedicated to Flare Network, a protocol that brings us many new features to the cryptocurrency ecosystem.
What is Flare Network?路
Flare is a layer 1 blockchain based on the Ethereum Virtual Machine (EVM) that enables strong interoperability. The network is built with two open native protocols: the State Connector and the Flare Time Series Oracle (FTSO). These protocols enable decentralized blockchain acquisition and time series data. In turn, they allow a wide range of applications that use off-chain data. More importantly, these protocols are protected by the network itself. It is one of the most anticipated launches in the cryptocurrency ecosystem given the long period of time we have waited for the distribution of Flare airdrop tokens (which we will detail later in the article).
How does the Flare Network work?⚙️
As the main novelties we can highlight the two points that we have explained in the previous paragraph of this training in cryptocurrencies. Let's see what's new that Flare Network brings us:
State Connector.
The State Connector enables decentralized consensus on the state of external blockchains, thus enabling on-chain acquisition of data from external blockchains. This is achieved using two basic protocols: the request-commit-reveal (RCR) protocol and the branch protocol. The purpose of the RCR protocol is to gather user queries and evidence relating to blockchains, while the purpose of the branching protocol is for the network to accept or reject these.
The State Connector allows you to build applications in Flare that can securely use data from external blockchains and the Internet. It can power a wide range of interoperability solutions that, in turn, will allow developers to create multi-chain or cross-chain applications. Developers will be able to access value, liquidity and information from multiple ecosystems through a single deployment.
Flare Time Series Oracle (FTSO).刺
The FTSO is a decentralized oracle for time series data such as asset prices, data indices, and more. As in the protocol SchellingAt regular, prescribed time intervals, the oracle takes the estimates of token holders as input and uses a weighted average algorithm to calculate the output. The system is designed to incentivize the submission of accurate prices. At startup, the system will provide USD prices for XRP, ETH, BTC, and more. The task of providing price estimates at regular time intervals to earn rewards is reciprocal for any token holder.
Therefore, in practice, token holders will delegate their votes to data providers. These provide data estimates to the FTSO and, in return, charge a commission for the rewards obtained. To participate in the FTSO, a data provider must meet a minimum number of votes delegated to it and, at the same time, have a cap. Additionally, data providers must invest capital to ensure the system is resilient to sybil attacks.
Songbird, Flare’s “test network”.
Just as Ethereum has a list of testnets to test features and debug smart contracts, Flare has also created a testnet called Songbird. This is an operational blockchain with a defined token supply (SGB) that allows new features to be tested in production conditions, before deploying them on the mainnet. Although it is certainly not a testnet as such, it is a canary network.
All users of the network are real users, but they are aware of the experimental nature of the platform. Songbird will serve as the lower house in Flare's planned governance system. The community will be able to submit and vote on Songbird proposals so that, when approved, the Flare Foundation will consider them for inclusion in the Flare network. The use of the Songbird network is similar to the use attributed to Kusama when incorporating improvements or parachains into Polkadot.
But what is a Canary Network?
We have left you with doubts about this concept to explain it below. It is not a network that has been created in the Canary Islands, these networks are usually different from testnet chains, used to test a final blockchain (the mainnet). Testnets almost always have the same native currency as their main networks, while canary networks feature a different cryptocurrency. Additionally, cryptocurrencies and testnet tokens have no monetary value and can be spent freely.
On the contrary, the Canary Islands networks have their own currencies and tokens with a certain market value. Coin and token balances on a canary network cannot be freely replenished. Therefore, a canary network can be considered a more advanced type of network than a test network. In some cases, canary networks continue to operate for years alongside their main chain, and can even develop their own defined ecosystems.
What tokens does Flare Network have?
We are going to enter with one of the factors that provide the most liquidity to cryptocurrency protocols; the tokens. Specifically, the Flare Network protocol has two tokens, the Flare token (FLR) and the Songbird token (SGB). We are going to continue the training in cryptocurrencies by reviewing the keys of each token:
Flare token ($FLR).
FLR is the native token of the Flare network used for payments, transaction fees to prevent spam attacks, and staking on validator nodes. FLR can also be wrapped in wrapped ERC-20 (WFLR) tokens. WFLR tokens serve several functions; They can be delegated to FTSO data providers, for example, or staked to participate in governance. These two uses are not exclusive and do not prevent the tokens from being used in other dapps and smart contracts that support EVM on Flare. Wrapped FLR (WFLR) can be earned by depositing native FLR tokens into a smart contract and withdrawing the newly minted WFLR.
The total supply of FLR will be 100.000 billion tokens with an inflation rate of 10% annually. As we can see in the graph above, FLR's tokenomics are very well defined, where the supply of tokens has been established very efficiently. 58,3% has been reserved for the community, 22,5% for Flare entities for development and investment and finally 19,2% for the Flare team, advisors and early backers.
On the day of the token distribution, 15% of the total supply was distributed. The remainder of the Flare token supply is governed by a 36-month monthly vesting for all parties, which in turn protects the token from a supply shock that may occur when introducing new supply of tokens into circulation.
Songbird token ($SGB).️
Songbird is the native token of the Songbird network. The SGB token will be used on the Songbird network in the same way as Flare (FLR) is on the Flare Network. Songbird Network will be very similar to Flare Network. However, since it will act as Flare's innovation center, many new applications will be launched on top of Songbird before reaching Flare. This token will be used for governance, therefore, if the user community submits a proposal, it first has to go through the voting process on Songbird, where the SGB token holders make a decision.
If the vote is successful, the proposal will move to the next phase, voting and testing in Flare. Changes proposed by the user community through voting on Songbird affect the Flare blockchain, not Songbird directly. If changes are deployed to Flare, they will be duplicated to Songbird for testing purposes. The total supply of SGB will be 15.000 billion tokens with an inflation rate of 10% annually. It is important to note that all Songbird assets will have value in real life, which is why we have contrasted in previous points of this cryptocurrency training on Flare that the Songbird canary network is like an Ethereum testnet but with assets with real value.
How can I get Flare tokens?
Starting this past Monday, January 9, both tokens can be traded in different centralized exchanges, notably the KuCoin, Kraken, Bitfinex or OKX exchanges. Currently both tokens are trading at a price significantly reduced from their all-time highs, although we already know that the price of an asset does not determine the real value of said asset.
The FLR token debuted at $0,05, seeing its value momentarily triple to $0,15. It then fell sharply minutes after the long-awaited airdrop tokens began to be distributed to a minimum of $0,22, a 76% drop. But all this has a reason, and precisely the airdrop has something to do with this sudden drop...
What happened with the FLR airdrop?
Let's first put into context what happened with the airdrop of Flare tokens. To begin with, we have to go back almost two years, when we were in the midst of a bullish rally with the entire cryptocurrency ecosystem seeing its prices grow exorbitantly. At the end of November, it was announced on the main exchanges that there was going to be an airdrop of a token called Spark (that's what the FLR token was called) that was going to be released. The conditions to be eligible for this airdrop were to hold XRP tokens in our cryptocurrency wallet on December 12, 2020. In order to verify the XRP addresses that were eligible to qualify for the airdrop, a snapshot was taken.
But it seems that the legal problems that Ripple had at that time in the face of the SEC accusations ended up considerably delaying the launch of the FLR token. But the long-awaited day arrived, almost two years after the airdrop announcement, for the Flare Network team to give signs of life. As we already saw, Ripple finally won the lawsuit against the SEC, allowing the launch of the FLR token to restart. As we commented in the previous paragraph, the selling pressure from FLR token holders is what has caused the price to fall so much, as usually happens when cryptocurrency airdrops are carried out.
How can I claim my FLR tokens if I held XRP during the 2020 snapshot?朗
Let's see then how we can claim our FLR tokens in the event that we hold XRP during the 2020 snapshot. The Flare team announced that the airdrop was going to be carried out under the same conditions that were cited two years ago. 1,007 FLR will be distributed for each XRP token held, although in the initial distribution 15% has been distributed. The remaining 85% will be distributed according to the monthly vesting calendar that we have mentioned in the Flare tokenomics paragraph of this cryptocurrency training.
All participants who held their XRP on centralized exchanges will have to wait to see how they proceed with the distribution of the tokens to their clients. Binance and other large exchanges have already distributed the tokens, some even already have trading enabled on their platforms, as is the case with OKX (chart above). As a surprise and disappointment, Coinbase has neither distributed the tokens nor enabled trading, which has not deigned to send any statement to its community.
What if I participated in the airdrop from a self-custody wallet?
Those who claimed through self-custodial wallets (like Metamask) will receive the FLR tokens at the address used in the message key field of their XRP address. Of course, as usually happens with self-custody wallets, we must add the parameters of the Flare blockchain to be able to view them in our wallet. Below we leave you the Flare blockchain data to add it to your wallets. And in case you don't remember how to add a new network or a new token, review the detailed article about Metamask.
Network Name: Flare
New RPC URL: https://flare-api.flare.network/ext/C/rpc
Chain ID: 14
Currency Symbol: FLR
Block Explorer URL: https://flare-explorer.flare.network/ In case you don't remember which ETH address you linked back then to receive the Flare airdrop, you can consult the XRP block explorer to discover the address that was linked along with the number of tokens you held back then.
Conclusions from this cryptocurrency training on Flare Network.
After having given a detailed review of Flare Network and the situation regarding the airdrop of its native FLR token, let's look at the highlights of this cryptocurrency formation. First we have explained what Flare Network is, along with the technological innovations that this network incorporates. Next we have analyzed the tokenomics of the two tokens that Flare has, both the native one (FLR) and that of the Songbird canary network, a type of testnet network that has its native token (SGB). Below we talked about how we can get FLR tokens and put into context why it took so long to distribute the FLR token. Finally, we have explained how we can claim our FLR tokens if we participate in the airdrop through a self-custodial wallet. In summary, Flare Network is a new protocol that offers us different very interesting options, both on a technical and future level. We especially highlight the possibility of incorporating smart contracts into the XRP network, which would be something unheard of until now, giving way to one of the longest-lived and most useful assets in the cryptocurrency ecosystem in the decentralized finance (DeFi) sector.