*IMPORTANT* XRP/SPARK AIRDROP FLARE NETWORK UPDATE

No intro on this one. We need to talk about the Flare and Spark token airdrop, folks. They have begun running into the problem that I foresaw months ago, and this problem actually led me— or was one of the reasons I did not claim my Spark tokens. And I didn't— I did set it up, but I didn't put the XRP in the account to take a snapshot. And this is, this is crazy. So Basically, the problem was that airdrops are taxed as ordinary income. If you get free crypto as an incentive, right, an airdrop is an incentive to invest, um, in a certain thing. And then if you have this certain thing, which was XRP, if you had XRP, you get airdropped an equal amount of Flare. So they're running into the problem. People are coming out saying Like, we're gonna go over this whole thing. There's a community vote, just to tell you what's going on. There's a community vote. They're letting the community decide what's gonna happen with this. I do think Flare is a monster. I've already told you this. But, um, basically, what if— like, many people are coming out right now saying, yo, Flare, like, this is gonna be taxed as ordinary income. Um, and I'm— imagine holding 10,000 XRP or something like that, maybe 5,000 or 10,000. Imagine holding 10,000 XRP and getting airdropped 10,000 Flare, and the Flare token was looking like it was $1.50. So you would be getting airdropped like $14,000 essentially for free. Now to be clear, that doesn't happen all at once. The original plan was 15% the Spark token holder, uh, or the recipient of the Spark airdrop would, um, hold would get 15% of their bag. Makes sense, right? So, so it controls all the price crashing, um, and it controls a bunch of stuff. Uh, it controls a bunch of stuff, just makes it easier. And then you get distributed the Flare slowly, you get the airdrops slowly over time. That's a way better way of doing it. But so, so the tax implication and the tax hit would be less than So if you have $10,000, it'd be 15% of that, which is $1,500. Um, so you would only pay tax as ordinary income, not capital gains tax. You would have to pay ordinary income tax on this. So that is what stopped me from claiming it. Also, there was an idiot who told me that it wasn't available in Canada, and I believed him, and then I didn't set it up. Um, why would it be not available in Canada? So what we've got here is a new blog post, Applying Governance to the Spark Distribution. There have been a number of questions regarding the tax impact of the Spark Flare distribution. Specifically, there is a concern that due to the Spark token becoming priced subsequent to the launch of mainnet, that the long-term distribution of 3% per month not the initial. So the initial distribution would be 15%. You get the airdrop, 15%, um, and then it would be 3% per month. And it says could be considered as income for tax purposes. Various parties claiming authority on the subject matter, predominantly from a U.S. perspective, have publicly given widely differing opinions. So Um, the purpose of the lengthy distribution is to make sure that liquidity aligns with the most efficient economic functions of the FTSO and F-Asset protocols. So they have commissioned a research— they have commissioned research and advice into the US tax implication by a respected tax scholar. Okay, um, the This research has resulted in the distribution option number 1 below. So there's 2 options and you're going to be able to vote for this, which involves the recipient burning a small amount of Spark to buy the remaining distribution, which was previously discussed by Hugo, the Flare co-founder. This option will not be implemented by default but will be brought to governance vote. So this is a vote. They're giving the power to the community's hands. So, um, okay, we've got this right here, and here's the first option. Wait, this— before I get into that, the Spark flare distribution will now be set up as follows: 15% of the total distribution of 100 billion Spark will be made. There will then be a 5-month period whereby the community can come to consensus over at least 2 possible governance proposals. 5 months? A 5-month period? If no new option wins, the distribution will continue from month 6 as previously defined, as 3% of the initial 100 billion. So option 1, here we go. I'm gonna go over the 2 options and then I'm gonna go over these little tweets that Flare has retweeted talking about this and kind of the community's reaction to this. Um, So option 1 is buy-through burn. This option is based on the legal research commissioned by Flare. A recipient of Spark would receive the initial 15% as previously detailed at the inception of the network. So you're still with this option— if you vote for this option, you would still get the 15%. The recipient would then optionally burn a small percentage of their Flare tokens in order to buy the remaining distribution. The remaining distribution would then occur at 3% per month from month 6. So basically they're doing a little tax-like swindle right here. A little tax swindle. Look at this. The legal research commissioned— hold on, let me zoom in. The legal research commissioned argues that the remaining distribution would have then been purchased and not given to you. And thus subject to cap— and the— and thus subject to capital gains tax upon sale instead of income tax upon receipt. A full governance proposal, blah blah blah. Okay, so the first option— I like the first option because that's like a little tax loophole right there. Basically, they make you buy it instead of just giving it to you as an airdrop. Option 2, which is pretty hard to understand, I think Distribution halt. This option would halt any further distributions. The remaining 85 billion would not come into existence. This would turn the initial 15 billion Flare into the total distribution. So basically that's a burn. Like, that means that the total supply of Flare would just be 15 billion. Instead of $100 billion. Now this doesn't change anything. Like, this is not, not bullish, right? That's just— it's all subjective. The value is just ratioed the same. So it's not bullish to vote for an $85 billion burn and move the supply down. Okay, so the first one, uh, where is it actually? Hold on. Let me go to Credible Crypto. Um, damn, Twitter, bro. Twitter is bad for that. Hold on. So here he explains it pretty good. So basically, this guy Shane Ellis, when it comes to Flare, the community needs to vote for the burning of 85%. You don't want another shitcoin with 100 billion tokens like XRP. If they burn 85%, we could see Flare reach double digits easily. This, this has nothing to do— so Credible Crypto replies, supply has nothing to do with anything as long as it's capped. If you own 3 out of 10 tokens, it's the same as owning 30 out of 100 or 300 out of 1,000. Value is all the same in all cases. Um, and there's some, there's some, uh, arguments here. There's some arguments here, but That makes sense to me. So Flare, these are all tweets that Flare Network has retweeted. Okay, this one says, I am baffled by the people who can't understand basic math and that nobody loses anything. Whatever option is decided is essentially the same thing. Nobody loses anything or gets less. Let the community and the majority decide. That's what decentralization means. Facts. Um, this is the same thing with Pundi X. People don't understand that they didn't lose any money. The price might have been down now, but they didn't— there wasn't any money taken from them. So we've got this long thread right here as well. Um, it's unknown how many people Flare would be affected by taxation. If it's a very large amount Um, regarding option 1, it is unknown at this point how exchanges would deal with the burn mechanism. Governance period should be lengthy. Option 2 is the equivalent of dropping the total supply. Um, if option 2 is triggered, the total initial supply going to all recipients would be 15 billion. Yeah, how do they deal with the IOUs? Because we've already bought up this stuff. We've already bought up Flare. I have Flare. I'm sitting on a bunch of Flare. Um, basically Flare retweeted a bunch of stuff that's like, like supporting the decision. So option 1 is just distribute Flare like it was planned. Option 2 is burning supply. In simple, in simple, that's from King Doggo right there. So what do you guys think? You guys can vote on this, I believe. Um, I don't know how or when, so we'll see, we'll see. But that's interesting. I, I had to do this update because there's a lot of people holding XRP. There's— we did a whole Flare video back in the day, a couple months ago. So very interesting stuff going on. I don't really— I'm in Flare for the long term. I'm in XRP for the long term. We'll see what happens. But what do you guys think? Option 1 or Option 2? Drop it in the comments. Also make sure to drop a like. But thank you all for watching and goodbye.