Original Title: "a16z Support, PayPal 'Gang' Establishment, Understanding the New Bitcoin L2 Spark and Its Ecosystem in One Article"
Original Author: Golem, Odaily Planet Daily
In the Bitcoin ecosystem, creating a new asset issuance protocol is not actually difficult; the challenge lies in having a community and project team that continuously "works" around the protocol. Recently, the Bitcoin ecosystem has seen a wave of new protocol trends, with many anonymous projects showcasing their creativity to the market. However, most of these are merely "new wine in old bottles," lacking infrastructure, development, and any takers.
Yet, amidst this dark forest, there are still serious teams. On May 20, the well-known Bitcoin ecosystem trading market Magic Eden announced its integration with the new Bitcoin L2 Spark and will co-host an event on May 26. Spark is a new type of Bitcoin scaling solution, with the project officially launching its mainnet test version on April 29. The first LRC20 token, FSPK, was born on May 8. Although the minting experience was poor, it still triggered FOMO in the Bitcoin ecosystem community, with the current over-the-counter trading price for the first FSPK ranging from $12 to $20 (1 unit = 0.001), while the cost was about $2 per unit, resulting in at least a 6-fold price increase.
The collaboration between Magic Eden and Spark may also indicate that the on-chain trading market for LRC20 is about to launch. In addition to Magic Eden, Spark has also partnered with several projects, and the ecological prototype is already taking shape, backed by the well-known VC a16z. Odaily Planet Daily will briefly introduce Spark, the currently issued LRC20 tokens, and its ecological projects in this article.
Spark: A Bitcoin Native L2 Designed for Payments and Settlements
Spark claims to be a Bitcoin native L2 designed for payments and settlements, but in reality, Spark employs an off-chain scaling solution, not an EVM-like chain or Rollup, and does not support smart contracts or a virtual machine. Therefore, Spark allows users to achieve instant, low-cost, and unrestricted self-custody transactions of Bitcoin and other tokens (including stablecoins) off-chain, while having native interoperability with the Lightning Network, enabling token sending and receiving through the Lightning Network.
For Bitcoin, whether on-chain or off-chain scaling solutions, users are primarily concerned about the security of Bitcoin, specifically whether Bitcoin entering L2 can be safely and unobstructedly withdrawn. Currently, the Spark network has only two operators: the parent company Lightspark and Flashnet (official statements indicate that more operators will be added later). Thus, theoretically, for all transactions occurring on Spark, at least one operator must authorize the transaction along with the user for it to succeed. This design naturally brings risks; if both operators go down, the security of user funds is threatened.
However, even as an off-chain scaling solution, Spark still possesses non-custodial and Bitcoin-native characteristics. The core of Spark uses a shared signing protocol based on Bitcoin, operating in the form of a distributed ledger without an additional consensus mechanism. Users' Bitcoin deposits are directly mapped to Spark without any bridging or wrapping; simultaneously, users' funds remain in a non-custodial state. Even if Spark operators disappear or attempt to censor or refuse cooperation, users can still unilaterally force withdrawals to the Bitcoin mainnet, ensuring the safety of their funds.
The parent company of Spark is Lightspark, founded by David Marcus, who previously served as President of PayPal and Vice President of Messaging Products at Facebook. He was also invited to participate in the first crypto summit held at the White House on March 8. In terms of financing, on May 13, 2022, Lightspark completed over $170 million in Series A funding, led by a16z and Paradigm, with participation from Coatue Management, Ribbit Capital, Thrive Capital, Felix Capital, Matrix Partners, and Zeev Ventures, making for a very impressive funding lineup.
On April 29, Spark launched its public test version of the mainnet, with core functions such as sending and receiving Bitcoin, creating tokens (e.g., stablecoins), and Lightning interoperability fully operational. Developers can also use Spark's SDK to build applications. Regarding network fees, users trading on the Spark network incur 0 fees, while depositing or withdrawing Bitcoin to/from Spark requires a certain Bitcoin on-chain transaction fee (which will incur a fee after 6-12 months), and transferring Bitcoin from Spark to the Lightning Network incurs a 0.25% fee and routing fees. Although the official statement clearly indicates that Spark has no tokens and will not have any airdrop or token TGE plans, shortly after the release of the Spark mainnet test version, LRC20 was fully explored by the market.
Spark Native Token Protocol LRC20
LRC20 is the native token protocol launched by Spark in the summer of 2024, which is also compatible with the Bitcoin mainnet and the Lightning Network but is still under development. Currently, LRC20 only supports operation on the Spark network.
LRC20 uses Bitcoin as the settlement layer, while Spark serves as the execution layer. Anyone can issue LRC20 tokens, but before issuing, users need to broadcast a transaction on the mainnet, embedding the token's identifier and metadata (name, supply, decimal places) into the OP_RETURN output. Once successfully broadcasted, they can mint tokens on Spark.
LRC20 does not support a fair issuance model; after the token is issued, only the original issuing wallet can mint, and other addresses wishing to obtain tokens can only do so through Dev airdrops or distributions. Additionally, LRC20 supports freezing and burning operations, where the original issuing wallet can freeze tokens on any address, locking the tokens held by the frozen address, which cannot be sent or received unless the Dev unfreezes them. However, the original issuing wallet can only burn tokens held by its own address, and the burning is irreversible.
From the above characteristics, it is evident that LRC20 is indeed designed for stablecoin issuance, granting significant power to the original issuing address, but for other addresses holding tokens, if they do not relinquish the freezing power, it hides a centralization crisis. Nevertheless, several LRC20 tokens with strong consensus have already emerged in the market, but due to the need for computer terminals to mint and various manipulations by Devs in the early stages, the tokens are somewhat chaotic. Below, we will introduce them separately.
FSPK (ending in 8b93): The First LRC20 Token
· Total Token Supply: 21 units
· Over-the-Counter Trading Price: $12-20 per unit
· Public Key: 02b1d59c286bb79b39d0b3f14dc2a532b1e97e5c32c6376caea41e0b8c39708b93
· Issuance Date: May 8
The FSPK token ending in 8b93 is the first LRC20 token issued by @fspk_spark. The total supply of this token was originally set at 21 million units, but due to an error in the token supply setting by the project team, the final total supply is 21 units (the worst Dev in history). Therefore, currently, one FSPK (ending in 8b93) amounts to 0.001 tokens, with a single minting cost of 0.000021 BTC, approximately $2. However, LRC20 itself cannot be minted fairly, so the minting process essentially involves users sending money to the project team's wallet, after which they manually distribute tokens to users (which is also quite labor-intensive), ultimately earning 0.441 BTC, approximately $47,187. Currently, the over-the-counter price for FSPK (ending in 8b93) is $12-20 per unit.
FSPKS: Correcting the First FSPK (ending in 8b93)
· Total Token Supply: 21 million units
· Over-the-Counter Trading Price: Not available
· Public Key: 029e4d50f931c170e100c1b7129e353cddd69c8ae50bf274e7a68b05144ef8b55e
· Issuance Date: May 12
This is also a token issued by @fspk_spark. The project team realized that the total supply of the first FSPK being 21 units was indeed too low. Therefore, to better support subsequent DEX AMM or Spark DEX swaps, on May 21, the project team announced the issuance of a new token, FSPKS, to replace the first FSPK. The new FSPKS tokens were airdropped to FSPK holders at a ratio of 1 to 1000. The project team also stated that the old FSPK would no longer be valid and would not appear in subsequent AMMs.
FSPK (ending in 6c82)
· Total Token Supply: 21 million units
· Over-the-Counter Trading Price: $4-10 per unit (1 unit = 1000 tokens)
· Public Key: 0374f5629ac68dbdf9600cc14c763b8be9f1ebb198b3c568b47f9811efbcf56c82
· Issuance Date: May 11
Due to players encountering too many difficulties in minting the first FSPK (ending in 8b93), such as transactions not confirming and tokens not arriving, and with the first (ending in 8b93) having only 21 units, the @Flashspark_team decided to airdrop FSPK (ending in 6c82) to the first 21,000 users who transferred the first FSPK (ending in 8b93) based on the order of transaction time, including both confirmed and unconfirmed users. Currently, its over-the-counter trading price is $4-10 per unit, but its consensus is relatively weak.
SAT
· Total Token Supply: 210 trillion units
· Over-the-Counter Trading Price: Not available
· Public Key: 02757529fa69b70e55cee583c03d58936c39fff134b83808745db1ff41c1603bdb
· Issuance Date: May 11
SAT is also an airdrop given by an anonymous Dev to all addresses that minted the first FSPK (ending in 8b93). Due to its inheritance of the large total supply tradition of SAT and zero cost, it has garnered community attention, but currently, there is no over-the-counter price.
SNOW
· Total Token Supply: 21 million units
· Over-the-Counter Trading Price: $19 per unit
· Public Key: 0377abadfbab8cc1fd7382fab87835ab062fd72c3ae7662fa6b579210fca16cd59
· Issuance Date: May 17
SNOW is launched by the Spark ecological project sparksat and is the first LRC20 token backed by a legitimate project team, which has led to a higher level of community recognition. Currently, its over-the-counter trading price is $19 per unit, with a cost of only $1 (this fee is also charged by the project team), and the price has increased 19 times.
Early Ecological Projects and Tools
The biggest difference between Spark and other fleeting new protocols is that, although still in its early stages, there are some steadfast builders within its ecosystem, reminiscent of the early BRC20 ecosystem. In addition to collaborating with Magic Eden, Spark has also established a partnership with the stablecoin issuance protocol brale, planning to launch a stablecoin on Bitcoin; and has partnered with Web3 infrastructure provider Privy to help projects build dApps on Bitcoin.
Below are introductions to early projects and tools in the Spark ecosystem:
sparkscan
sparkscan is the browser for the Spark network, where users can enter a Spark network address on the website to view token balances, transaction records, etc. Users can also input token public keys to see the number of token holders, total supply, transaction history, and more.
SparkSat
SparkSat is the first fully functional web wallet tool on the Spark protocol and is also the project team for the LRC20 token SNOW, not operated by Spark officially. By importing a mnemonic phrase into SparkSat, users can clearly view their asset status and can directly deposit and withdraw Bitcoin on the mainnet and conduct transactions on the Spark network and Lightning Network through SparkSat's frontend. Users can also directly use this tool to issue LRC20 tokens and view all LRC20 tokens in one place, making it the "Unisat" of the Spark protocol.
Flashnet
Flashnet is one of the two operators of the Spark protocol and is also the developer of the Spark browser sparkscan. On February 4, 2025, Flashnet completed a $4.5 million seed round of financing, with participation from UTXO Management, Accomplice, Soma Capital, and others. Flashnet is dedicated to building a permissionless, non-custodial, Bitcoin-native DEX and may also launch a Spark ecosystem DEX in the future. Additionally, it has partnered with the stablecoin issuance protocol brale to launch the Bitcoin stablecoin USDB.
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