On the 15th of June is the snapshot for the next Flux parallel asset. It will be dropping parallel assets for Flux-ETH and Flux-BSC, bringing the current number of parallel assets to three. With seven more parallel assets and airdrops to come, here is a primer on Flux airdrops and economics.
This article is a primer on Flux airdrops and economics. You’ll learn some of the basics about Flux economics and parallel assets as well as the why, what, and how of Flux airdrops.
The Basics — The Flux hard fork and parallel assets
So Flux actually started out in 2018 as ZELcash ($ZEL) and has been in constant development since then. On March 27th, 2021, ZEL was discontinued and relaunched as Flux in what is called a ‘hard fork’. For the sake of simplicity, think of the hard fork as an upgrade like going from Windows 7 to Windows 10.
The hard fork was done to provide the best foundation for the continued development of the Flux ecosystem, provide the best incentives to loyal Flux holders, miners, and node operators, and also to integrate Flux with all the major decentralized finance (Defi) platforms such as Uniswap, Pancake Swap, KADDEX and so on. The hard fork also introduced a major new component of Flux called parallel assets.
A parallel asset is a token that is part of the Flux ecosystem, but that resides on another blockchain.
You can compare them to expatriate citizens. A native to Flux but living abroad. They have all the benefits of the foreign country they reside in, but can always return home, it’s like holding two passports.
For example, a Flux-ETH token lives on the Ethereum blockchain and is no different from any other token on that chain. It can partake in trading on Uniswap, being in a liquidity pool, staking, and so on, it also abides by all the rules on that blockchain such as fees and structure.
You will be able to swap parallel assets 1:1 with native Flux by using an app called Fusion that is part of the official Zelcore wallet. This feature is not launched yet but will be here soon.
In this way, Flux will have parallel tokens on 10 different blockchains to start with. This will provide many opportunities for Flux holders as Flux can ‘travel’ to other blockchains and give holders access to the benefits and decentralized exchanges on those chains. The parallel assets can be returned to native Flux via Fusion and be used for node collateral or other things that require native Flux.
Economics & Distribution; Snapshots, Block rewards, and Parallel Mining
In the new economic model introduced at the hard fork, the maximum supply of Flux was increased. This was necessary to support the continued incentivization of miners and node operators as well as enabling the distribution of the new parallel assets.
At the time of the hard fork, the circulating ZEL supply of 123 million was converted 1:1 to Flux and the new maximum circulating supply for Flux was set at 440 million Flux. Over time the Flux circulating supply will thus grow from 123 million to 440 million.
How this growth happens is a matter of distribution and the planned distribution is what governs Flux Block rewards, parallel asset airdrops, and parallel mining rewards.
The Flux economic model defines the distribution targets and end state. Initial distribution will ensure that there are 220 million native Flux and 220 million in parallel assets. A 1:10 ratio between native Flux and each of the ten parallel assets.
Once distributed Flux and parallel assets can move between blockchains through Fusion, but the circulating supply can never be more than 440 million native Flux and parallel assets combined.
Distribution is done in four ways:
- Airdrop for the Flux foundation, a one-off airdrop at the time of the hard fork.
- Block rewards for GPU miners and Flux node operators.
- Parallel asset airdrops.
- Parallel mining rewards.
At the hard fork, an airdrop was made for the Flux foundation to replenish the foundation funds and to ensure that the foundation could continue to grow and develop. A total of 10 million native Flux and 10 million in parallel assets (as they launch) were dropped to the foundation. This is a locked supply to be governed by the coming Decentralized Autonomous Organization (XDAO) governance model for Flux once implemented.
To distribute the remaining native supply of Flux, block rewards are given to miners and node operators. About every 2 minutes a Flux block is generated and a total block reward of 75 Flux is distributed to Flux GPU miners and node operators in a 50/50 split.
For each parallel asset, only 21 million tokens need distribution as the last million is airdropped to the Flux foundation. To distribute the supply of parallel assets, two methods are used; Airdrops and parallel mining.
The airdrop method is used to distribute the parallel assets related to the established circulating supply of Flux at the time of the hard fork. The airdrops will always distribute about 12.3 million of a parallel asset as this was 10% of the Flux supply at the time of the hard fork.
As the Flux supply increases the ratio of Flux held to airdropped parallel asset received will increase. It went from 1:10 for the first parallel asset airdrop to 1:12 for the coming one. This is offset by counting both the Flux and the parallel assets you hold towards the airdropped amount you receive.
So keep holding to maximize the airdrops received.
This leaves about 8.7 million per parallel asset to be distributed by the parallel mining method. Parallel mining adds a 10% parallel asset distribution on top of Native Flux block rewards for each parallel asset. This has been tracked for all block rewards since the hard fork and will soon be claimable via the Fusion app in the Zelcore wallet.
For example: If you receive a 5.625 block reward for your Cumulus node on native Flux, you will also receive 0.5625 Flux-KDA, 0.5625 Flux-ETH and 0.5625 Flux-BSC on their respective blockchains. This applies to both GPU mining and node block rewards and for all ten parallel assets once they’re launched.
So to summarize, the airdrops distribute the parallel assets for the Flux supply that existed before the hard fork, and parallel mining is distributed with all the Flux block rewards for blocks created after the hard fork. Flux holders qualify for airdrops, GPU miners qualify for parallel mining, and node operators qualify for both.
The Flux economic model and distribution plan ensure that everyone involved with Flux receives their fair share of Flux through airdrops, block rewards, and parallel mining.
You can get more details on Flux and its economic model in this video.
A primer on Parallel Asset Distribution
The Flux parallel airdrops are the initial distribution of the parallel asset to Flux holders based on the circulating supply for Flux at the time of the hard fork (at block height 825000).
Each Flux parallel asset has an initial circulating supply of 12,313,786 tokens which is 10% of the circulating Flux supply at the time of the hard fork.
When a new parallel asset is introduced a snapshot is taken to capture all the Flux and parallel assets in circulation at that time. The new parallel assets are then distributed evenly to Flux holders based on their individual holdings at the time of the snapshot. Since the origin supply of a new Flux parallel asset will always be 12,313,786 then the ratio of Flux holdings to airdrop received will increase as the circulating supply of Flux increases. This is offset by counting both the Flux and the parallel assets you hold towards the airdropped amount you receive.
So keep holding to maximize the airdrops received.
The formula to calculate the ratio of Flux held to airdrop received is a bit complicated. But no worries, the Flux team will always communicate this ratio ahead of airdrops. For the June 15th airdrop you will receive approximately 1 Flux-BSC and 1 Flux-ETH for every 12 Flux you hold (Flux-KDA count as well).
How to do the exact calculation on your own will be covered in an upcoming article detailing how to calculate Flux airdrops, node rewards, and parallel mining rewards.
You’re eligible for the airdrop if you hold Flux, and or Flux-KDA, in the official ZelCore wallet, an approved exchange such as CoinMetro, or in Fluxnodes at the time of the snapshot.
Airdrops will be claimable in the Fusion App in the official Zelcore wallet. The local fees for the specific parallel assets will apply when claiming your airdrop. To minimize fees you can gather your Flux on a single wallet address rather than have them spread out on multiple wallet addresses as you would incur a fee for each one.
Airdrops will not be claimable on the snapshot date, some time will pass before you’re able to claim in Zelcore Fusion. Watch out for team announcements on when you’re able to claim in Fusion.
Over time Flux will introduce 10 parallel assets in total, so a total of 10 airdrops will be conducted. Flux-KDA airdrop is completed and Flux-BSC and Flux-ETH snapshot will be done on June 15th 2021. There are seven more airdrops to come.
The Flux hard fork not only opened the door to decentralized finance but also created strong incentivization for Flux holders, node operators, and miners.
Be sure to hold your Flux, and or Flux-KDA, in the official ZelCore wallet, an approved exchange such as CoinMetro, or in Fluxnodes at the time of the snapshot so you will be eligible for the coming Flux-ETH and Flux-BSC airdrop.
Another article is on the way that will dive deeper into how to calculate rewards on the Flux ecosystem, such as the future airdrops. That article will be a more technical description of how rewards are calculated, so get your calculators ready-.
Until then stay informed with the latest news on the official Flux website.
Also, drop by the Flux discord to meet the Flux team and community.
And check out the latest team AMA video.