Coinbase Spark Token has become a commonly searched term on Google as crypto users debate why US-based exchange Coinbase has refused to support the distribution of Spark token to their XRP clients. In other words, people holding their XRP tokens on Coinbase can’t claim the Spark token.
Before we dive into the reasons for Coinbase’s actions, it would be appropriate to start from the genesis for those who are not familiar with how the Coinbase Spark Token saga started.
We will first look at how Spark token came about and why the creators have decided to give it out to XRP holders. Then we’ll then talk about what sparkled the ” Coinbase Spark Token” controversy while also list other exchanges supporting the distribution of the Spark Tokens to their XRP users.
What is Spark Token?
Spark token is the native token of the Flare network, a blockchain protocol that claims to be the world’s first Turing complete Federated Byzantine Agreement (FBA) network.
Some smart contracts are notable for attaching safety to their tokens, but Flare’s goal is to provide new ways of scaling smart contract platforms that do not connect security with its token value.
Flare Network is using Spark as its native token majorly to prevent spam transactions. Since Flare safety is not dependant on the value of the Spark token, it is applicable for the trustless usage of non-Turing complete tokens with smart contracts.
Why the Spark Token Distribution to XRP Holders?
Recently, Ripple, in a partnership with Flare Network, showed interest in connecting the XRP with the Ethereum blockchain. This bridge would help to bring the XRP network and Ethereum blockchain together.
So, by merging Ripple with Ethereum Virtual Machine, the Flare Network works as a bridge that provides advanced smart contracts on the XRP network.
In a tweet, Flare noted that the move “would allow FXRP to be used trustlessly on Ethereum as well as providing a scaling platform for Ethereum tokens and applications while giving access to the XRP market for existing Ethereum applications. This could bring together the #XRP and #Ethereum ecosystems.”
To achieve this union, Flare is rewarding all XRP holders with Spark token. Explaining how users will receive the Spark token reward, Flare said, “If you are a customer of a supporting exchange, then your exchange has indicated publicly that they will distribute Spark tokens pro-rata to their customers based on their XRP holdings. If your exchange is not listed at that link, then you should assume for now that your exchange will not be participating.”
However, for XRP holders whose exchanges are not supporting the Spark token distribution, they can choose to withdraw their XRP to a supporting exchange or move their XRP to self custody.
Coinbase Spark Token Sage: Why XRP Holders Can’t Claim Spark
Coinbase is one of the exchanges that hesitated support the Spark token distribution to XRP holders. This delay has led to a series of controversy on social media as XRP holders using the exchange sort to know the reasons for Coinbase’s actions.
As one of the biggest exchanges in the industry, Coinbase has a considerable number of clients, so many people are pissed. The quest for answers from Coinbase has made “Coinbase Spark token” a frequently searched term on Google.
Coinbase refused to support Spark token distribution until Dec 6 when it made an official announcement that it will support the distribution.
The exchange said about its decision:
“Our decision to support any asset requires significant technical and compliance review and may be subject to regulatory approval in some jurisdictions. We, therefore, cannot guarantee when or if Spark will be available for distribution in any specific jurisdiction at this time. We will add support jurisdiction-by-jurisdiction, subject to applicable review and authorizations.”
So, users who hold XRP on Coinbase can now claim the Spark airdrop.
Exchanges Supporting Spark Token
While some crypto platforms like Nexo, SBI VC Trade, and Etoro will soon provide support for the Spark token distribution, several others have already given their support. Here is the list of other exchanges that are currently offering Spark distribution to XRP holders.
Binance announced on November 25, 2020, that it will also support the $SPARK Airdrop Program for $XRP holders.
The Spark token distribution is a reward plan for XRP users. As partners, Ripple and Flare network use the token to build a bridge between XRP’s network and the Etherum chain.
Coinbase Spark Token still remains a controversial topic within the crypto community as XRP holders continue to wait for Coinbase’s official response as to why it has not yet provided support for the Spark token distribution.