DESCRIPTION OF BUSINESS

EXECUTIVE SUMMARY

Flare Network was launched in 2017 by Flare Networks Limited, as well as its native token, the Spark token (FLR). The team set out to solve two perceived problems present in the public blockchain space: Firstly, a significant portion of the value in blockchains (Ripple, Litecoin, Stellar) cannot currently be used with smart contracts in a trustless manner. Secondly, Proof-of-Stake (PoS) blockchains rely on native tokens to achieve safety.

In a nutshell, Flare is a next-generation Layer-1 blockchain that enables smart contracts with multiple non-Turing complete assets that settle on its native chain. Flare Network’s key features are:

  • Flare Consensus Protocol (FCL) – Flare uses the Avalanche consensus protocol with a key adaptation to a Federated Byzantine Agreement consensus (FBA) consensus topology.
  • Turing-completeness – Integrates Ethereum Virtual Machine (EVM).
  • The Flare Time Series Oracle (FTSO) – Provides externally sourced data estimates to the network.
  • The State Connector – Flare’s system to observe the state of underlying chains.
  • The Songbird Canary Network – A live testing venue for proposed Flare protocols.
  • Native tokens The Spark token (FLR) on Flare and Songbird (SGB) on the Canary Network. The Project issued both tokens via an airdrop.

A team of experts contributes to the Flare Network, and a well-known group of investors is backing the project. Token holders will eventually govern the Flare network.

In terms of project progress, it is currently observational on Flare’s Canary network, Songbird. Songbird offers Flare’s underlying blockchain and FTSO functionalities at the moment. The Songbird network has so far produced over 2.2 million blocks and shows over 221.5k wallet addresses. The network also achieves a block time between 1.7-2 seconds. Before moving to the Flare mainnet, Songbird has to test other vital elements like the State Connector and F-Assets.

The team has not set a timeline for the Flare mainnet launch.

Our researchers gave Flare Network a final rating of 61.60%. The breakdown of this rating is available at the end of this report.

PRODUCT & COMPANY DESCRIPTION

Flare, a project launched back in 2017 by Flare Networks Limited, is a distributed network that uses Flare Consensus Protocol (FCP), a new construction of the Federated Byzantine Agreement consensus (FBA). Flare’s distributed network of nodes run the Avalanche consensus protocol with a key adaptation to an FBA consensus topology. Flare leverages the Ethereum Virtual Machine (EVM) to achieve Turing-completeness, meaning that it can run full smart contracts. This combination of FBA and EVM makes Flare a scalable smart contract platform that does not rely on its native token for safety.

The Spark token (FLR) functions as the native token of Flare Network and performs two key functions in it. The first one of these is to impose a cost upon transactions to disincentivize superfluous network spamming through network fees. The second is the Spark token’s use in network governance and Spark Dependent Applications (SDAs). Some examples of the Spark token’s usage are to trustlessly issue tokens from non-Turing complete networks (such as XRP) onto Flare, and to be used as collateral whenever necessary.

Other vital components of the Flare Network are:

  • Protocols to trustlessly issue, use, and redeem non-Turing complete assets. These are called F-Assets, and the first protocol subject to them was XRP, which on Flare is called FXRP. State Connector is one of the most critical protocols on the Flare Network. State Connector is the system to observe the state of underlying chains.
  • The Flare Time Series Oracle (FTSO).
  • Network governance mechanisms for Spark token holders.
  • Other projects building on top of the Flare Network.

Flare attempts to solve two main issues in the industry to improve upon the current status quo:

  • A significant amount of value in public blockchains cannot currently be used trustlessly with smart contracts. Simply put, these networks do not support smart contracts and therefore their currencies have limited utility. (e.g., Ripple, Litecoin, DOGE, Stellar).
  • There are issues implementing scaling for smart contract networks today. Proof-of-Stake (PoS) protocols achieve safety through their native token, which Flare considers problematic and not scalable.

Flare Network tries to address these issues in two ways. Firstly, with Flare, non-Turing complete tokens could be used trustlessly with smart contracts allowing them to be interoperable (with developments in bridging the technologies of Cosmos, Polkadot, Ethereum, and other EVM compatible chains) and composable. Secondly, unlike other platforms, Flare aims not to link the safety of its network to the value of a native token. None of these problems is new to the world of crypto, and Flare isn’t the first one to try and tackle them.

Flare Network will support several F-Assets, such as XRP (Ripple), LTC (Litecoin), DOGE (Dogecoin), XLM (Stellar), and ALGO (Algorand). These assets have a combined market capitalization of ~$133 billion.

The project has published three scientific papers/whitepapers: The Flare Network and Spark Token, Flare Consensus Protocol (FCP), and FXRP. These papers are considered of good quality and very comprehensive. However, the average user may find them difficult to understand. Our research has shown that the Flare Network does not own any patents.

Flare Network provides a Layer-1 infrastructure, and therefore other projects can build on top of it. For example, even at this stage, several projects have plans to develop on top of the Flare network. E.g., Flare Finance is the first DeFi platform built on the Flare Network and Sparkles is an NFT platform on Flare). Other integrations are also already running atop it (for instance, wallet support). However, at present, the network is very observational, and full functionalities are not enabled, the rest only available through Songbird. Therefore, any developers will have to watch out for guidance from Flare Network before building on top of it.

Flare Network hosts its codebase on GitLab and, currently, all the contributions to it are committed by the core team at Flare. Anyone is free to deploy network software that is under an MIT license. Flare’s GitHub does not list any public members at this moment. Its GitHub repository pertains to Flare’s node implementation, Coreth and the C-Chain.

Therefore, the project is currently highly centralized (the core team makes all decisions relating to changes to the codebase). This concentration is understandable since the network is still at its early stages. However, with the proposed governance model, the network could gradually move towards more decentralization assuming voting power is not concentrated.

Flare’s proposed comprehensive plan is appealing given the market opportunity ahead of them. Nonetheless, the Flare Network is still heavily being tested. At the outset, network testing was carried out on the Coston Test Network. The Coston Testnet went offline since the recent release of the Songbird Canary network. Songbird is also a test venue before the Mainnet launch of the Flare Network. Core components and protocols on the Flare Network are tried and tested (in terms of functionality, stability, reliability, and security) on Songbird before any decision on its mainnet launch is made. At present, only the FTSOs system is functioning on Songbird with about 47 signal providers. The next step for Songbird will be State Connector System testing. There is currently no specified date for when this will begin.

Therefore, the Flare Network is far from being fully functional as a product. However, we note that there is excitement and enthusiasm in the community since the airdrop of Songbird tokens (SGB) and subsequent entitlement to Spark tokens (FLR).

From a Product-Market-Fit (PMF) standpoint, Flare scores well thanks to its potential market opportunity and strong team. However, the product still needs to be commercially ready to be scored higher.

SUCCESS FACTORS

Based on our understanding, there are several success factors for the project. These factors are listed below:

  • Layer-1 infrastructure featuring unique characteristics.
  • Interlinked to long-standing, strong projects (Ripple, Litecoin, Stellar) with readily available support and community.
  • A strong core team.

MARKET CONDITIONS AND COMPETITION

Market Conditions

The overall cryptocurrency market is growing quickly. The total market capitalization of the industry reached $3 trillion recently, a key milestone. Similarly, the smart contract platform market has grown at a rapid pace over the last several years. The total market capitalization of the smart contract platform segment currently stands at around $952 billion.

The wrapped assets market also indicates the market’s potential and growth. Currently, over 239k BTC (approximately $15.3 billion) is wrapped on the Ethereum network. In our view, F-Assets on Flare could deliver similar, if not better, use cases for several different networks.

That said, we also note that efforts to bring smart contract capabilities and programmability to Bitcoin (the largest cryptocurrency) have not gained much fanfare compared to Ethereum or other platforms. For instance, a list of such initiatives are platforms like Stacks (Total Value Locked~$1.01 billion), RSK (TVL ~$219.73 million), and Liquid Network (~L-BTC, in circulation 3,378).

Competition

It was identified that Flare is operating in a highly competitive market. Layer-1 smart contract platforms strive to differentiate themselves in several different ways (scalability, transaction speed, security, and interoperability are some of these traits).  However, Ethereum has emerged as the clear dominant player as of now. We are also witnessing the emergence of other alternative networks like Solana, Avalanche, Algorand, Cardano, Binance Smart Chain, Polkadot, Cosmos, Tezos.

On the other hand, an interchain ecosystem has been developing steadily over the past few years. As a result, it would become easier to achieve interesting different use cases for assets like Bitcoin. Interlay is an exciting project that tries to bring Bitcoin to Polkadot. The Internet Computer implements similar capabilities by integrating threshold ECDSA signatures into the Internet Computer so that Canister smart contracts can hold BTC and ETH. Similarly, wrapped assets platforms (mainly centralized/trusted) are now moving to other assets like XRP and Litecoin in the recent past. Read the story here. RenVM is another player bringing BTC, BCH, and ZEC currencies to decentralized applications. We consider these to be competing alternatives to Flare’s F-Asset solution.

It appears that the industry is moving in the direction of a multi-blockchains environment with interoperability.

How is the project different from its competitors?

Flare is aiming to differentiate itself from the competition in three ways:

  • Flare’s security mechanism is a deviation from other PoS networks.
  • Flare’s block production mechanism is a ‘merge mining’ approach and rewards host chain participants.
  • Flare distributed its native token under what they called a ‘Utility Fork.’

TECHNOLOGY REVIEW

Product

The Flare Network is yet to be fully launched. However, Flare ran its Testnet, the Coston Test Network, until it released the Canary network called Songbird. Songbird is similar concept to Kusama on Polkadot. It is a testing ground for the Flare Network and any project planning to build on Flare in the future.

We find several projects already building on Songbird, such as Flare Finance, DeFiOracles, FlareIndex, Kings of Strategy, FlareMetrics. Furthermore, as per Songbird explorer data, Songbird currently has around 221.1k wallet addresses. In comparison, Kusama network has approximately 242k holders. That said, we also note that SGB holders currently have limited use cases with their tokens and would naturally be attracted to delegate them given the higher yield possibilities.

For now, though, Songbird is only testable with the FTSO function, and one of the network’s most critical elements, State Connector system testing, has not started. Up until State Connector is tested, the project could not implement the F-Asset protocol. The Flare mainnet will only launch after these stages are complete. A time for these milestones is not set.

FXRP Overview (Flare Network ARS)

Overview of FXRP: How XRP is represented on Flare. Source: FXRP Paper v1.0

Blockchain

The Flare Consensus Protocol (FCP) is a Federated Byzantine Agreement framework. FCP is leaderless, asynchronous Byzantine fault-tolerant, has totally-ordered transactions, and is highly scalable due to its usage of a novel networking complexity-reduction technique called federated virtual voting. Asynchronous totally-ordered networks are scalable since they create a Directed Acyclic Graph (DAG) data structure rather than a hierarchical blockchain.

Flare is a Layer-1 infrastructure project, and as per the Songbird explorer, the network currently achieves a block time of around 1.7 – 2 seconds, in contrast to Ethereum’s average of ~13.5 seconds. If Flare reaches similar block times and higher transactions per second (TPS) at mainnet, that’s a comparatively better outcome.

Consensus Mechanism

Flare is built on a fork of Avalanche. Nodes run the Avalanche consensus protocol with a key adaptation to the Federated Byzantine agreement (FBA) consensus topology. This Flare Consensus Protocol (FCP) is discussed in the FCP Whitepaper. Flare implements a Unique Node List (UNL) mechanism to thwart single-node failure scenarios present in pure FBA settings. Two concepts in this UNL topology are the Unique Node List (a list of nodes that one node relies upon for consensus) and the UNL Intersection Set (a subset that overlaps a node operator’s UNL).

FCP is a simplified and fair Federated Byzantine agreement (FBA) construction, proven to Byzantine Fault Tolerance. The Flare Consensus Protocol significantly reduces communication complexity through the Federated Virtual Voting technique (and is hence leaderless). As discussed in the FCP paper, the network control becomes fair due to leaderlessness, which is very important for achieving fairness in many contexts, such as darkpool trading.

Another property of FBA is that it is unique as a consensus topology in that it achieves safety without relying on economic incentives that can interfere with high-value and high-risk use cases. This is because it enables individual participants to effect quorum slice decisions independently. Therefore, Flare is not a Proof-of-Stake (PoS) network.

The other property of FCP is that transactions are totally-ordered and asynchronous (similar to DAG based data structures).

Security Audits

As per the community discussions, security audits on the protocol are ongoing.

ROADMAP

The project has not published a detailed and time-bound roadmap. We note that the project team is careful not to declare timelines to achieve milestones. This strategy could lend them the time to focus on the product without being driven by the need to meet deadlines. However, prolonged timelines could hurt the project in the long run due to many reasons (community frustration, waning investor support, macro level changes in the industry, etc.)

We also note that the project has evolved through time, with design and structural changes implemented over the years. For example, Flare’s very first blog post discussed a native stablecoin. The project does not pursue this idea any longer. Its early plans of integrating Interledger for node remuneration have also been abandoned. Similarly, the Songbird Canary network is an idea launched later in the process.

TEAM

Flare has put together a team of around 20 highly technically skilled professionals. They all have a wide range of experience in Machine Learning (ML), Artificial Intelligence (AI), Computing & Projects. In addition, the team also possesses community, communications, and ecosystem-related skills.

Hugo Philion, Co-Founder and CEO, previously founded Future Generations, a modular building system. He also worked as a commodity derivatives portfolio manager. He obtained his Bachelors in Investment and Financial Risk Management from Cass Business School and his MS in Machine Learning from UCL.

Sean Rowan Co-Founder, and CTO, has been active in the blockchain space since 2015. He is part of INOX Labs and Interledger. He was an R&D Engineer at RAIL in Dublin, where he developed backend networking software for a healthcare-assistive robot. Sean received his BA and BE from Trinity College Dublin and earned his MSc in Machine Learning from UCL.

Dr. Nairi Usher is the Chief Scientist at Flare Network. She was previously a post-doctoral researcher in Quantum Machine Learning at UCL, where she obtained her Ph.D. in Quantum Computing.

Joshua G. Edwards functions as the Vice President of Engineering at Flare Network. He has co-founded several businesses in the past, namely Quicksilver Web, COUP Discount, Estates Tech. Joshua’s engineering experience spans full-stack development, cloud architecture and DevOps. He graduated from Northumbria University.

Advisors

Eight advisors have been appointed to the project. All advisors bring business acumen and specific expertise in blockchain-related projects. Their combined experience and education are relevant to the project. We believe that the core team at Flare could benefit significantly from such a diverse group of advisors.

Dr. Boris Horvat has experience as a CEO and co-Founder of several businesses. He also held advisory roles with SunContract, CargoX, TraderShub, and Blockchain Think Tank Slovenia projects. Boris also moonlights as an Assistant Professor and Researcher. He has a Ph.D. in Computer Science and Mathematics.

Vanessa Pestritto is currently the Director of Partner Programs at Agoric. She functioned as a Director of Strategic Growth at Ripple, where she built up partner relationships. Vanessa also has a venture investment background working for Lattice Ventures and New York Angels. She’s a graduate of New York University, Stern School of Business.

Jules Miller was a partner at IBM Blockchain Ventures and led IBM’s Blockchain Accelerator. She currently plays multiple different roles with venture firms like Mindset Ventures, Prose Ventures, and Priori. She was a Kauffman Fellow. Jules is an alumnus of The London School of Economics and the University of California.

LEGAL AND COMPLIANCE SPECIFICS

Jurisdiction

Flare will eventually be governed entirely by Spark token holders through voting. There will be a Flare Foundation to help implement the voted decisions.

The Foundation will be a non-profit with responsibilities in five key areas: grants, investments, research and development, education, publicity, and partnerships. As per community discussions, the team will release more details about the Foundation around the Mainnet launch.

Flare Networks Limited is a for-profit entity involved in the project.

The project is registered in the United Kingdom (UK). The UK is a blockchain-friendly jurisdiction. Regarding crypto assets matters, the Financial Conduct Authority (FCA) acts as the regulatory body. The FCA carries out work in this regard to ensure that consumers are protected, market integrity is upheld, and that competition works in the interest of consumers.

Flare has not obtained any licenses or permits as per our research.

Flare Network has engaged independent tax counsel group Tjong and Hsia to provide an opinion on the tax implications of the staggered token release plan.

XPRING, the investment arm of Ripple Labs, has made a strategic investment in Flare. In addition, Flare Network raised funding from a group of institutional and individual investors.

Partnerships

Flare Network entered into partnerships with several different parties. Its partnership with Gala Games enables and incentivizes the minting of Gala Games’ game-related NFT’s onto Flare. Panther Protocol will be building on Flare Network to expand its interoperability. Flare Network also partnered with PAC Protocol, AllianceBlock, and Global Esports Federation.

The project has many other ecosystem partnerships, which are mainly Signal Providers and node operators. For example, XRPLORER and Towo Labs.

Flare’s airdrop is supported by numerous exchanges and trading venues where the XRP token is traded. Flare also announced a set of users and partners (e.g., Securitize, Singularity, BuenoBit, Neuhanse Network, Custody Digital Group). However, these partnerships are uncommitted yet, and we do not notice any significant developments in this regard.

Legal Advisors

Flare Network has not appointed any legal advisors. One of the advisors, Steve Einstein, was admitted to the Bars of the States of New York and New Jersey (inactive).

Nonetheless, it does seek external advisory support when there is a requirement (as evidenced by the appointment of a Tax counsel).

KYC & AML

Flare Network did not conduct a token sale, but instead, the project has undertaken token airdrops of two types of tokens, namely, the Songbird token (SGB), the native token to its Canary network, and secondly, the Spark token (FLR), the native token to the Flare Network. FLR holders can not claim their tokens until the network goes live.

The tokens were airdropped to XRP token holders. However, the project published an excluded group that was not eligible to receive the airdrop. This group included Ripple Inc and certain former employees, non-participating exchanges, and other certain individuals. Any accounts known to have received XRP due to fraud, theft, and scams were also excluded.

There were no other KYC procedures conducted.

Token Classification

The Spark token fulfills several utilities in the network:

  • Can be used as collateral on FXRP arrangements (SDA).
  • Allows owners of Spark tokens to contribute to the Flare Time Series Oracle (FTSO).
  • Network governance.

The Canary network token (SGB) also performs the same functions. 

The project has not registered the token as a security under any authority. There was also no indication that the project plans to register the tokens with any regulatory body.

Flare network conducted the distribution via what they called a ‘utility fork’ to holders of XRP. If XRP is judged as security under the ongoing lawsuit, Flare Network tokens risk being classified as securities as well.

Legal/Compliance Risks

There is a lack of legal clarity when it comes to airdropped tokens. Moreover,The Songbird (SGB) and Spark token (FLR) tokens were airdropped to Ripple’s XRP holders. Ripple, in turn, is fighting a prolonged lawsuit in which the SEC has alleged that XRP constitutes an unlawful offer and sale of securities in violation of the US Securities Laws. At this stage, it is difficult to gauge the regulatory or legal implications of the lawsuit’s outcome on tokens issued on the back of XRP.

Flare’s website does not contain any terms of use or GDPR/privacy statements.

TOKEN OFFERING

Spark Token (FLR)

The total supply of FLR tokens is 100 billion, and eligible XRP holders will claim ~45 billion FLR through the airdrop.  The starting supply of the Spark token would be 15 billion.

Flare Spark (FLR) Token Allocations

 

Songbird Token (SGB)

Similarly, all the Spark token recipients are eligible to receive SGB tokens (in the same ratio to the same recipients of the FLR distribution). The total starting supply of SGB would be 15 billion with initial inflation of 10% per annum through the FTSO and validator rewards systems.

The Flare Network did not conduct a public sale. 

Spark Tokens (FLR) were freely distributed to XRP holders via a mechanism called a “Utility Fork.” XRP holders, other than Ripple Labs and an excluded group, could claim approximately a 1:1.0073 amount of Spark to their XRP holding.

FLR Claim Formula

FLR Claim Formula. Source: Flare Network Blog

 

The Spark token (FLR) distribution would be as follows:

  • 15% of the total distribution of 100Bn Spark (FLR) will be performed at the launch of mainnet.
  • The distribution will continue from month 6, at 3% per month of the initial 100Bn. This process could last between 25 – 34 months.

The Songbird Network token distribution followed a similar process. We also note that certain exchanges that supported the FLR distribution did not support SGB distribution.

Overall, the Spark token allocation was conducted transparently.  The process met with different obstacles due to concerns over taxes (especially for US recipients) and complexities in determining the exact XRP holdings of Ripple Labs. The Songbird token distribution seems to have added further complexities due to certain exchanges excluding support for its airdrop.

Interestingly, Flare Network does not rely on native tokens to achieve network security, unlike PoS networks. The Spark token holders could, however, enjoy voting rights in governance matters relating to the network. As per initial distribution, Flare Networks Limited retains 35% of its voting rights since the Flare Foundation will not engage in any governance matters. The rest of the voting rights (65%) are with other holders, and based on the Whale Cap, no other single holder could own more than 1.4% of the total voting rights (this could change later since anyone may purchase tokens from exchanges). Flare Networks Limited is a for-profit entity with external investors and is expected to act in the network’s best interest.

There was no specific token allocation for the team except that Flare Networks Limited was allocated 25 million Spark tokens. (FLR)

Numerous exchanges supported flare’s Spark token (FLR) airdrop. However, FLR is not available for sale on exchanges until the mainnet launch. The Songbird Canary chain token, SGB, was not supported by all the exchanges due to several reasons. SGB is currently trading at several exchange venues.

FLR IOUs are trading on several exchange venues. Based on the current market price of FLR IOUs ($0.19) and assuming FLR trades at similar prices, FLR fetches a market capitalization of ~$2.85 billion and a fully diluted market capitalization of ~$19 billion. However, we note that the IOU market is not as active and liquid.

SGB is currently trading at ~$0.4081.

TOKENOMICS

Both FLR and SGB tokens are inflationary. There are two ways in which inflation works:

  • FTSO paying out newly minted Spark. This rate is set at inception to 10% per year, without compounding, of the total Spark tokens. The FTSO is set to behave from initiation of the network “as if” the entire 100 Bn tokens were fully distributed and unlocked (subject to adjustment from token burns). Since Spark tokens unlocks over time, early network participants can potentially earn a much larger percentage return.
  • F-Asset & FXRP Incentive Pool: This incentive pool is created from the excluded groups.

The project did not discuss token allocation for marketing purposes. However, the Flare Foundation is allocated 30% of the total amount of the Spark token, which could potentially be utilized for marketing among other things.

Any tokens that are not claimed during the designated period (6 months after the snapshot date) will be burned. There is also an extended unlock process whereby only 15% of the tokens are initially unlocked and 3% every month after the given six months window.

An algorithmically managed incentive pool of at least 10Bn Spark is set up to reward users who mint F-Assets. The entire incentive pool will be unlocked from day one but only earned incrementally as F-Assets are minted and held on the network.

Flare is assumed to have been self-funded until it raised $11.3 million in funding from external investors. It did not conduct any other fundraises. Presumably, such investors invested in Flare Networks Limited. Any future funding funds are expected to come from Foundation grants or investments.

Supply and Demand Dynamics

Token Supply

Award Rate: Inflationary rewards (newly minted tokens) are paid to participants in the FTSO. The inflation rate is set at 10% per year, without compounding, of total initial Spark tokens.

Progressive token unlocks: Flare tokens are progressively unlocked for the holders at a rate of 3% a month. These tokens can be inflationary until all the 100 billion FLR tokens are released to the market.

 

Token Demand

FTSO contribution: The Spark token can be used as a contributor to the FTSO system. Moreover, Spark holders could also delegate their tokens to other data providers if the holders are not going to act as FTSO data providers. In the long run, the total percent of tokens contributed to FTSO will be dependent upon FLR’s market price and its yield potential.

Collateral:  The Spark token can be used as collateral within applications, e.g., on the FXRP system.

The demand side of the Spark token (FLR) will be highly correlated with the network’s adoption rate.

The SGB token also has a similar tokenomics pattern as it performs a similar role in the Canary network. However, Songbird could take a different path in the future, and governance could decide to change its tokenomics.

SOCIAL MEDIA AND VIRALITY

There are open communication channels on social media platforms to ask questions and contact team members directly. There are official channels for the project on Telegram, Discord, and Twitter. The management team communicates with the community via Telegram and Discord. There are 19.6k followers on the Telegram channel. Flare’s Discord channel is also very active (13k members). It is the best place for developer-related queries and discussions. Link to Discord here.

Flare Network boasts over 181k followers on its Twitter account. Flare’s Twitter account is very active. Interestingly, three other eco-system Twitter channels are showing significant followership, namely Flare Finance (86.3k), XUMM Wallet (42.8k), Flare Community (80.7k), and Songbird Community (24.4k).

Flare’s LinkedIn channel is comparatively less active and has 1.3k followers. Flare is not present on Facebook.

Flare does not have its own official YouTube channel. However, Flare has many mentions on YouTube. Flare Community is a dedicated unofficial channel for information about the Flare Network and the projects building on it. We note a couple of influencer channels either discussing or mentioning Flare Network. These videos gathered over 100k views each.

There is no ongoing bug bounty program at present. However, in the project’s GitHub repository there is an open invite to disclose any security bugs. As per the notice, valid reports would be eligible for a reward subject to terms and conditions. Specific details of this initiative are not provided publicly.

LinkedIn profiles of all except for one advisor lists Flare Network. The advisors are not very actively or visibly promoting Flare Network. However, they are occasionally retweeting Flare Network’s Twitter posts. The project’s Co-founder and CEO Hugo Philion is very active on Twitter. He has over 36k followers.

The Flare Network tokens airdrop also helped create awareness about the project. As witnessed from Google search trends, the search term Flare Network shows increased interest over the airdrop period and afterwards.

Flare Network google trends

Google Trends for search term Flare Network. Source: Google Trends

RISKS TO THE PROJECT

  • Technological vulnerabilities: Flare Network uses a complex blockchain architecture. Understandably, most of the value on the network will be via bridged assets held across several different chains (e.g., XRP, LTC). Therefore, any technical vulnerabilities could be damaging for the project.  Realizing this, the team has introduced a Canary network to function as a testing ground before launching any features on the mainnet. We also note that security audits are necessary and currently underway.
  • Dependence on other networks: Spark Dependent Applications (SDAs) rely on third-party networks to spur their pace of adoption. For instance, the FXRP system relies on XRP, which in turn is entangled in lawsuits. Furthermore, wild swings in these supported currencies/tokens could potentially cause collateral issues for Spark holders.

RATINGS

Everything you see in this report is the aggregate result of an extensive research process carried out by a distributed team of researchers and crypto enthusiasts around the world. The process consists of 60 questions divided into three phases. Researchers are called to answer these questions about a project, while providing links or screenshots as evidence to support their answers. For every answer, they also provide a rating from zero to ten. The average of their ratings is detailed below. 

Our researchers gave Flare Network a final rating of 61.60%.

Flare Network rating

DISCLAIMER

This Report is for informational purposes only and/or all or any of its content thereof, should not, may not and will not be taken to constitute, either as a whole or in part, any investment advice or recommendation or similar, regulated, or authorized advice, and D-Core by producing, disseminating, giving away, or making available this Report does not, should not, may not and will not be taken to advise on investments, or carry out any similar activity, or any regulated activity or any other authorized activity. D-Core is not authorized by the Financial Conduct Authority or by any other competent EU or elsewhere or otherwise competent authority to carry out any regulated activities and/or any activities within the scope of these authorities’ competence.

D-Core excludes and disclaims all liability and/or responsibility whatsoever and/or howsoever caused, arising out of any actions, or omissions taken, or made by any authorized and/or other recipient of this Report in reliance on, or arising out of, or in connection with any or all content of this Report. Any authorized and/or other recipient of this Report acknowledges, accepts and agrees that they carry out their own independent research and act in their own sole risk in reading or using any or all information contained in this Report. In any event, recipients of this Report are urged to seek professional advice before making any potential investment decision in relation to the project described herein. Any authorized and/or other recipient of this Report accepts this Disclaimer in full. For the avoidance of doubt, this Disclaimer is binding against any recipient of this Report whatsoever.