The two-year-long awaited Flare token (FLR) airdrop distribution finally came through for Ripple XRP holders. The distribution started on January 10 at a ratio of 1.0073 FLR for each XRP token. As a result, the XRP community received 15% of the Flare supply.
However, David Schwartz, Ripple CTO, appears displeased about it. In a recent tweet, he claims the current holding rules for Flare tokens lack incentive. As a result, Schwartz enjoined the airdrop receivers to sell their Flare tokens quickly.
What is Flare Token?
Flare token is the native cryptocurrency of the Flare Network. Flare is a layer-1 Ethereum Virtual Machine blockchain that enables developers to build decentralized applications interoperable with different blockchains.
Flare tokens may be used for payments, transaction fees to avoid spam attacks, and staking on validator nodes. FLR can be wrapped into WFLR, an ERC-20 variant. Users can stake WFLR tokens to participate in governance or delegate to FTSO data providers.
Flare Network protocol launched on July 11, 2020, while its token went live on January 9, 2023. The Network posted a live feed on Twitter showing the countdown to the airdrop distribution event. They started releasing airdrops after capturing snapshots of XRP holders for over two years.
Flare Network announced in October that XRP holders would receive a 15% airdrop of the FLR tokens. Users with a minimum of 10 XRP coins during the snapshot would be eligible to receive Flare tokens from the airdrops.
According to Flare’s first Improvement Proposal, there would be an airdrop of 4.28 billion FLR tokens. Users that wrap their FLR tokens will receive another 24.23 billion FLR in regular installments over 36 months.
Why Does Schwartz Want XRP Holders To Sell Flare Tokens?
CoinGecko data shows that the Flare token began trading on January 10 at $0.05 on the MeXC exchange. After launch, the price rose to $0.15 when Binance, Kraken, OKX, and other exchanges started trading it.
But its price started crashing shortly after receiving increased liquidity from centralized exchanges. As a result, FLR price has corrected to $0.04234, a 71.8% decline from its all-time high. It has a 24-hour trading volume of $72.35 million, according to CoinMarketCap.
Although the airdrop provided XRP holders with FLR tokens free of charge, prompt selling is peculiar to nearly all airdrops. This aligns with Schwartz’s view about the recent airdrop. The CTO stated that Flare holders won’t incur any loss if they sell their tokens now.
Schwartz explained that sellers are not entitled to more airdrops. But receivers would get 100% value when they sell their FLR tokens because buyers can wrap the Flare and get the airdrop.
The CTO further expressed his displeasure towards the Flare Network. He noted that by only releasing 15% of all it promised initially, the Network didn’t intend to keep its commitment to the XRP community.
The Ripple executive said he feels bad because he loved the Flare project and wished the best for it. But, in his opinion, Flare leveraged the XRP community to develop but failed its promises when it didn’t see the need to keep them.
-Cover image from Pixabay and XRP chart from Tradingview.com