(A highly insightful paper on this topic is here.) We suspect that this is perhaps the key reason why despite having comparatively higher transaction costs and far lower transaction throughput, Ethereum is still leading the way in DeFi.Ī longer term issue is that as a Proof of Stake network gains usage and the value built on top of it increases, the value of the staking token must increase or the network will become unsafe. This diverts tokens away from staking and cannibalizes the safety of the network. If a token holder can obtain a higher yield (and with no possibility of slashing) by providing collateral to create a stablecoin than they can from staking, then as economic rationalists, they will likely do so. The immediate issue inherent in Proof of Stake is that the consensus design doesn’t yet safely allow for alternate uses of the native token. These protocols derive network safety from their native token. The majority of new networks use Proof of Stake or its variants. Second, and of both short term and long term consequence, there are potential issues with how scaling is being implemented for smart contract networks today. (A TL DR is at the end of this post.) What is Flare and why are we building it?įirst, and of immediate importance to the building out of our industry is that 75% of the value that exists in public blockchain cannot currently be used in a trustless manner with smart contracts. A minimally technical overview of each important component will be posted over the following weeks, starting later this week with a walkthrough of Flare's trustless integration of XRP, FXRP. In this post we aim to highlight what we consider to be the most important aspects of Flare. There should not be changes that materially deviate from the overview provided below.

The papers are in draft form and there will be optimization changes between now and the day Flare goes live. These plans can be fully explored by diving into our draft white papers covering the Network and its native token, Spark ( here) and the trustless integration of XRP with Flare ( here). Today we are delighted to make our detailed plans for the deployment of the Flare Network public.

Spark token