XRP has been falling, after the Spark airdrop (FLR).
Here's why:
After much anticipation, the XRP airdrop (CCC: XRP) came over the weekend, and now XRP is sinking. So what exactly is an airdrop? And what do investors need to know?.
For starters, investors should know that XRP is the third largest cryptocurrency by value. Ripple Labs is the company and controlling force behind XRP tokens. Faced with pressure to compete with its larger rivals, Ripple needed to do something to help it stand out. That's where the airdrop Spark (FLR) comes in.
Basically, Ripple is adding Flare Network, a new protocol, to the XRP ecosystem. Flare Network will provide more support to XRP token owners, specifically by adding decentralized finance or DeFi functionality to the XRP ledger. As part of this, Flare Network has a native token, Spark (FLR).
Over the weekend, all XRP token holders received free Spark tokens. And after raising XRP prices, it looks like the airdrop is now weighing on crypto.
Spark Airdrop:
14 things Ripple investors should know Still not sure exactly what this airdrop news is about? The DeFi functionality represents eliminating intermediaries from direct purchases, loans, bets, insurance and other types of transactions. Decentralized finance is one of the biggest attractions of the crypto space and, so far, most DeFi applications have been run on the Ethereum platform (CCC: ETC).
Now that XRP wants to differentiate itself, many bulls will probably appreciate that through Flare Network, XRP will be able to maintain smart contracts and connect with existing Ethereum apps. So, for Ripple, the Spark air launch (FLR) is a way to kick off an important milestone.
What you need to know about XRP and Spark (FLR) Airdrop:
Spark Airdrop: 14 things Ripple investors should know
With that in mind, here are 14 things you should know about XRP and Spark Airdrop (FLR).
An airdrop is a way to distribute tokens as rewards or gifts. Specifically, cryptographic projects are known to use these airdrops as a way to promote themselves or attract new users.
Importantly, Square (NYSE: SQ) also did something similar when it was developing its Cash app. Over a period of a few weeks, Square gave away cash as it built its user base. Similarly, Ripple's strategic investment in Flare Networks has given Flare resources to develop the FXRP network. Spark Airdrop: 14 things Ripple investors should know Flare delivered over 45 billion Spark tokens to eligible XRP holders to launch the new protocol.
Essentially, anyone holding XRP tokens as of December 12, 2020 was eligible for the airdrop. In addition, users received more Spark tokens based on the number of XRP tokens they had.
This has incentivized bulls to buy XRP leading up to Spark airdrop (FLR). Several crypto exchanges supported the Spark airdrop (FLR). This list included Coinbase, Binance, Kraken, KuCoin, and several others.
Ripple first invested in Flare in 2017 through its incubation arm. Importantly, a lot has developed since then, which makes the promise of smart contracts for XRP holders much more attractive.
Now that the Spark air launch (FLR) has taken place, XRP holders will be able to generate XRP-linked tokens called FXRP. These holders can then use FXRP tokens within Ethereum-based DeFi applications. By putting it all together, XRP holders will be required to use Spark tokens (FLR) as collateral in these transactions.
Why is XRP sinking?
Spark Airdrop: 14 things Ripple investors should know Clearly, the Spark (FLR) airdrop ushered in a major milestone for Ripple and XRP holders. So why is XRP sinking?
Well, before the airdrop, many bulls were hitting the table on XRP as a way to make short-term profits. Basically, there was an easy-to-follow formula to succeed. Buy XRP, claim your Spark tokens after airdrop, convert FLR tokens into XRP, and finally withdraw the money. It seems that many people who participated in the airdrop could be doing just that.
So what should you do now? Stay calm and do your own research. If you believe in the long-term potential of XRP, you are not alone. Some, such as Tom Yeung, an analyst at Investor Place Markets, believe that XRP could yield more than 300% in the coming years as adoption grows.
Alejandro O. Asharabed Trucido
+54911 5665 60608
Buenos Aires, Dicember 8, 2021
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