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Flare and Spark (And Its Main Functions) Explained

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Avatar for Bonjour1068
Written by   31
2 years ago

November 27, 2020

Disclaimer:

I am not a crypto expert and 
I don't own the information 
in this article. 
All information is from a video source 
that will be attached at the 
end of this article. 
I was permitted to convert 
his video to an article. 
Photo from Flare Network

What is Flare Network?

Flare is the world's first Turing complete Federation Byzantine Agreement(FBA) network. Which means it is scalable, safe, and decentralized. Simultaneously, it can deliver smart contracts to other cryptocurrencies.


How does it work?

For example:

Alice has 1000 XRP but she can't use it for smart contracts. Then Alice has now FXRP that enables usage of smart contracts.

FBA is used by Stellar as well but FCP is improved.

The security of Flare does not depend on a native token. That is important because Proof of Stake (PoS) does derive security from native token and therefore can not scale for value.


What does it mean "can't scale its value?"

Let's suppose Ethereum 2.0 will secure on blockchain shares of Microsoft worth 1662 Trillion.

Then with a 51% attack worth just 21,42 Bn (51% of market cap), you could take over 1,662 T. So the price of ETH must increase. While it is good for ETH investors, it derives a lot of capital from other users and locks capital in staking.

However, if investors can obtain higher fields elsewhere, the capital will move away from staking and the security of the network decreases.

FCP is leaderless Asynchronous Byzantine fault-tolerant, has totally ordered transactions and is highly scalable.

FLARE CONSENSUS PROTOCOL:

Leaderless > Decentralized > more difficult to attack
Asynchronous BFT > ensures finalization of transactions > fast payments
Highly scalable > can process a high volume of transactions per second > suitable for securing great values

A Sybil attack is a kind of security threat in an online system where a person is trying to take over the network by creating multiple accounts, nodes, or computers.


75% value of cryptocurrencies is non-Turing complete blockchain. Which means they are not compatible with smart contracts.

75% of the value of Blockchains tokens is inaccessible to decentralized applications. That changes now, starting with XRP!



XRP will the first beneficiary of Flare.


XRP will the first token to have trustless representation (FXRP) on Flare Network that enables smart contracts.

Who will be the next?

XRP will gain access to smart contracts through FXRP (a.k.a. F-asset)

Potentially, any token can have F-asset on Flare Network.

For instance, it can be BTC (no smart contract and slow) or even something from the real world, e.g. shares of a company (FTesla)


Now you know that FXRP is an F-asset on Flare Network. In the future, we might see more F-assets representing different tokens.

•Another terminology for F-asset is SDA-Spark Dependent Application
F-asset and SDA can be used interchangeably


SPARK DEPENDENT APPLICATION


As the name suggests SDA's are applications that use Flares native token Spark for:

  1. Providing price estimate of the underlying F-assets

  2. Collateral when creating F-assets

  3. Governance purpose

  4. Combination of these three

To become an SDA does not require changes in the other networks. In other words, it's very easy for any cryptocurrency/network to get "connected" with Flare Network. It is yet to see how Flare will involve.

It can compete with other networks providing interoperability or it may cooperate and Flare might become one of the Polkadots bridges.


Notice that Flare can add different qualities depending on which cryptocurrency is being added as SDA:


Transactions cost on Flare will be burned, which is a deflationary factor.

There is a single transaction cost for any transaction of complexity up to the complexity limit.


Flare introduces limit for transaction fees > complexity limit.

Even though fees are expressed in Gas converted to Spark, those are unrelated to Gas on Ethereum. In other words, transactions on Flare won't be affected by Ethereum.


SPARK TOKEN

Photo from cryptocomes.com

Spark is the native token of Flare Network. It will be distributed to XRP holders 1:1.
Total Supply = 100 Bn

Spark main functions are in Spark Dependent Applications where it will be used as:

  1. Collateral when issuing F-assets and

  2. In Flare Time Series Oracle (FTSO) where Spark holder will provide price estimates of F-asset.

  3. In addition, Spark has a governance purpose. Every Spark holder can participate in the governance of the Flare Network and potentially in the governance of SDA's.


Flare has an advantage over PoS Network. It is because Flare Consensus Protocol(FCP) does not use the native token for security. Whether the market cap of Spark token is high and low, the security of the Flare Network remains the same.


Does it mean you won't be able to stake your Sparks?


Flare provides for Spark holders sometimes better.

You can put your Sparks to work and became an agent. As an agent, you will earn fees every time someone needs your Spark as collateral to mint F-assets (e.g. FXRP) or redeem XRP.

Creation Fee 💰💰 Reservation Fee 💰Redemption Fee 💰

Another way of making money is to participate in FTSO.

And best of all you can simultaneously make use of:

  • Collateral

  • Governance

  • FTSO

Those three do not impact each other.


FLARE TIME SERIES ORACLE


FTSO provides an estimate of the information from the off-chain to an on-chain in a decentralized manner.
In the beginning, FTSO will provide estimates of the following time series:


In short, Spark holders will vote for price XRP/Spark, BTC/Spark, etc..whilst FXRP holders vote only for XRP/Spark.


GOVERNANCE

Flare is governed entirely by Spark token holders through voting.

1 Soark = 1 Vote

There are three decision rules:

  1. Super Super Majority decision - for decisions with great impact on network.

  • 70% of total tokens voted and more than 80% votes in favor

  1. Super Majority decision - for decisions with medium impact on network.

  • 50% of total tokens voted and more than ⅔ votes in favor

  1. Simple Majority decision - for decisions with little impact on network.

  • 30% of total tokens voted and more than 50% votes in favor

Let's take a look at what changes requires which majority.

You don't have to vote in every matter and you can choose to delegate your votes. For example, to any other Flare token or Flare Foundation.


Flare Foundation is to be a non-profit organization whose mandate is developing and improving the network. The Foundation will help to implement changes agreed upon through voting.
It is to be responsible for five key areas:

  • Grants

  • Investments

  • Research and Development

  • Education

  • Publicity and Partnership

The Foundation rules:

  • No voting

  • No collateral

  • No Oracle participation

  • The right to dissolve

  • Reporting

Foundation will not use its tokens as collaboration, nor will it participate in FTSO. This means it will not compete with regular Spark holders for fees/rewards nor in governance.

Part 2 will follow...

If you want know the whole information, you can visit this channel, like, and subscribe by @antyFOMO😊

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Avatar for Bonjour1068
Written by   31
2 years ago
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Comments

Thanks for explaining Flare. I have been interested in this airdrop for some time but did not really know what it was about but now I have a great idea. What do you think the price will be? I know that Celcius is one of the wallets that is supporting the air drop. It is also a amazing staking wallet for a bunch of crypto. I am staking my XRP there for a little over 3% while I wait for the air drop. Check it out.

https://celsiusnetwork.app.link/110923dea0

$ 0.00
2 years ago

Yea good,,,thanks read cash

$ 0.00
2 years ago

Almost every week I see new token.I am doing smart contract for TRX.Great explained.

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2 years ago

Wow.vary good idea

$ 0.00
2 years ago

Very compact info for spark. More understand on the future plan for xrp!

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2 years ago