On Friday we announced that Litecoin (LTC) will be integrated as an F-Asset on the Flare Network at launch. This post is intended both as a guide for anyone new to Flare and as specific information for Litecoin holders.

For those familiar with Flare, jump to the bottom to see an update on the general rewards pool.

For those new to Flare, to understand what “integrate” means, an F-Asset is a 1:1 representation on Flare of any token from another chain. Flare’s F-Asset protocol can be thought of as a pure trustless and non custodial bridge from one chain to Flare and back again. F-Assets are created and redeemed without relying on a third party.

In short the F-Asset protocol is designed to allow any asset from any chain to be used with full Ethereum style smart contracts on Flare without relying on a centralized third party.

Flare has already announced the integration of XRP for network launch, with the addition of LTC Flare can bring smart contract utility to both networks at launch.

In a nutshell what is Flare offering? Smart Contracts, scalable for TPS and value.

A scalable smart contract platform that uses the Ethereum Virtual Machine. Smart contracts are written in the same language as is used on Ethereum. Any smart contract that runs on Ethereum can run on Flare.

Flare’s consensus protocol doesn’t require value to secure the network. To summarize why this is useful: Deriving security from value (PoS) means that the value locked on the network must scale as the value expressed or built on the network increases. This makes such a network economically inefficient and presents a new barrier to mass adoption, that of scaling for value. Flare doesn’t suffer from this.

Brings smart contracts to XRP, LTC and potentially any blockchain asset. Genuinely trustlessly.

The F-Asset protocol allows any token from any chain to be trustlessly represented on Flare without making any modifications to the underlying chain. This gives the opportunity to concentrate liquidity from integrated chains on Flare and to reap the benefit to applications of having access to multiple large sources of value which are now composable with each other.

The native token, FLR, used to generate real utility for the network and returns for the holder.

Flare’s consensus protocol doesn’t require the native token to be used to secure the network. This means that Flare’s native token, FLR, can be put to other uses. When deployed to the F-Asset protocol the FLR holder earns fees in the underlying F Asset (See article 1 below). Simultaneously to being deployed as collateral to an F-Asset protocol (and potentially to any other application on Flare) the FLR token may be used to participate in the Flare Time Series Oracle (FTSO). The FTSO is a flexible methodology to provide important and useful data to the network. It is the inflation mechanism of the FLR token and is analogous to mining on other networks. For further information on the FTSO see article 2 below.

Cross chain interoperability and a trustless gateway for non Turing complete chains.

The same system that underpins the F-Asset system, called the state connector, allows for the potential trustless issuance of assets from Flare on to other chains that allow the issuance of non-native tokens. This makes Flare a trustless gateway. One such example could be the issuance of FLTC (or something derived from FLTC like a collateralized USD pegged stable coin) onto the XRP Ledger or any other chain that is integrated with Flare and supports the issuance of non native assets. Hence Flare enables trustless cross chain interoperability. Here is an example of the mechanics that involves bringing XRP to Flare, placing it in a CDP to create a dollar denominated stable coin and then reissuing that stable coin onto the XRP Ledger.

Governance

The FLR token is used to vote on questions of real importance to the network. (See section 5 of the Flare whitepaper)

To get a deeper understanding we suggest the following resources F-Assets. Blog post that covers the basics of an F-Asset from the perspective of XRP but applies similarly to any other F-Asset such as FLTC. To get a deeper understanding of the F-Asset protocol the FXRP white paper is a good guide. Flare Time Series Oracle. Deploying FLR votes to generate utility through data provision. Blog & Section 4 of the Flare Network whitepaper. Flare general information. Blog & Full whitepaper. Supporting exchanges & Supporting exchanges Japan. Flare’s presence. These are the only accounts that Flare maintains. Dedicated Litecoin rewards pool

As first mover after XRP in supporting Flare, a pool of 5 Billion FLR is being dedicated to Litecoin participants. This is intended to incentivize community engagement with Flare and the building of applications on Flare that use FLTC and to widen the circle of FLR token ownership. The 5 Billion FLR pool does not increase the amount of FLR coming into existence rather they are redirected from the amount that would be accruing to the Flare Foundation.

A fixed percentage of the FLR rewards pool will be distributed daily by smart contract to FLTC holders. Each participants reward will be calculated based on the amount of FLTC that they hold relative to the entire amount of FLTC that exists on Flare. There will need to be a reasonable minimum aggregate balance of FLTC on Flare to trigger the distribution. By example on a specific day, if there exists on Flare 1000 FLTC and an individual owns 50 FLTC then they would receive 5% of the dedicated FLTC reward for that day.

As the pool is of a fixed size, this means that the largest numerical amount of FLR is paid out on day one and decreases very slowly each day onwards. Further details and the precise daily percentage will be confirmed closer to launch.

Where FLTC is used in an application on Flare, users will want to check that the application redistributes the daily reward back to the ultimate FLTC owners.

General F-Asset rewards pool

As with Litecoin it is important to incentivize the participation and partial network ownership of each community that engages with Flare, as such we are defining the general rewards pool and increasing its size. The general rewards pool currently derives its FLR tokens from exclusions and the XRP whale cap, this totals about 7 Billion FLR. To this 5 Billion will further be added through diversion from the Flare foundation, such that the foundation now starts out with 20 Billion FLR. Further and the only major change we are making from the previous distribution plans, any FLR that are unclaimed by XRP holders at the expiry of the 6 month claim period of 11th June 2021 will now go to the general reward pool.

Although the sum is determined partially by the actions of others, based on current data, it is likely that this pool will total at least 20 Billion FLR.

The general rewards pool will have exactly the same payout percentage rate as the Litecoin dedicated pool above and will also payout daily. The payouts will be distributed across holders of all F-Assets barring FLTC (because it has a dedicated pool) and the calculation will be based on the FLR value of the F-Asset. By example on a specific day, if there exists on Flare eligible F-Assets worth 1000 FLR and an individual owns eligible F-Assets worth 50 FLR then they would receive 5% of the reward for that day. Further details and the precise daily percentage will be confirmed closer to launch.

Where an F-Asset is used in an application on Flare, users will want to check that the application redistributes the daily reward back to the ultimate F-Asset owners.

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What the IRS wants to know about your BTC holdings: does this mean that if i buy one crypto with another on an exchange without cashing out to USD, i still have to report capital gains on *each* crypto exit into another if i made gains?! and i have to pay taxes on mined coins i haven't cashed out?!

What the IRS wants to know about your BTC holdings: does this mean that if i buy one crypto with another on an exchange without cashing out to USD, i still have to report capital gains on each crypto exit into another if i made gains?! and i have to pay taxes on mined coins i haven't cashed out?!