Once XRP mechanism receives smart contract functionality, its tokenomics will be reorganized with Spark collateral system

Shane Nixon, investing veteran and wealth manager, has clarified how the design of Ripple (XRP) tokenomics will look after the activation of Flare “utility fork.”

Increasing Ripple demand, reducing supply

Nixon shared his views on all aspects of the sophisticated tokenomic system that will include XRP, FXRP (an asset on the Flare platform, pegged 1:1 to XRP), and Spark (native collateral asset of the system).

Initially, XRP holders will be gifted Spark tokens 1:1. Then, the circulating Spark supply will be reduced by collateral reservation fees, as well as by the amount of Spark the users would lock for staking. Spark will act as collateral that will economically incentivize XRP users to transact fairly, since:

“Redemption failure results in both a 1% compensation fee in Spark to the party that was to be paid out AND a penalty fee to the Agent/XRP/Spark holder, which is substantial.”

XRP will be utilized as a reward for transaction creation. Instead, the supply of Spark will decline due to periodical burning events.

In a nutshell, this tokenomical design will guarantee the sustained increase of interest in Spark tokens accompanied by a reduction of its supply.

XRP rewards would be one more incentive for the participants of the post-fork FXRP mechanism, Nixon concluded. He also announced that bringing smart contracts functionality into XRP will be revolutionary:

“Combining Defi/smart contracts with #xrp and interoperability could be a game-changer.”

Flare Network—the operator of FXRP—describes the upcoming upgrade as a “utility fork” for XRP transactions. Once it is activated, a protocol for the issuance of XRP tokens on Flare, dubbed FXRP, will bring smart contracts to XRP through Flare’s patented Turing complete Federated Byzantine Agreement (FBA) algorithm.

Ripple (XRP) users will be able to claim Spark tokens after the fork

The team behind Flare is working on a solution-focused on advancing XRP transactions with smart contracts functionality. Flare engineers claim that their network may upgrade many blockchains with the power of smart contracts.

Two days ago on Aug. 10, Hugo Philion, co-founder and CEO of Flare Network, introduced the solution’s design and explained how it may transform XRP remittances. Today, the first details of the planned release have been disclosed.

Thus, XRP holders may claim Spark tokens that act as nuclei for the Flare ecosystem in the six-month period after the activation of this fork. The rest of Spark’s supply will be destroyed immediately after this period ends.

Soldiers of the XRP Army—the most passionate and aggressive community in the entire crypto realm—are very enthusiastic about the upcoming “utility fork.” Mostly, they are interested in the ability of XRP whales to dump newly created tokens.

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