Bitcoin's New Star Spark Emerges: Endorsed by a16z, Led by a PayPal Veteran, Building the Next BRC20 Myth?

Original Article Title: "a16z Support, PayPal 'Mafia' Founding, a Comprehensive Look at the New Bitcoin L2 Spark and Its Ecosystem"

Original Article Author: Golem, Odaily Planet Daily

Creating a new asset issuance protocol in the Bitcoin ecosystem is not difficult in itself; the challenge lies in having a community and project team continuously "doing things" around that protocol. Recently, the Bitcoin ecosystem has once again seen a wave of new protocol trends, with many anonymous project teams showcasing their creativity to the market. However, in reality, most of them are merely repackaging old ideas without any infrastructure, development, or support.

But in this dark forest, there are still legitimate teams. On May 20, the well-known Bitcoin ecosystem trading platform 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. On April 29, the project officially launched its mainnet test version, and on May 8, the first LRC20 token FSPK was born. Despite the poor minting experience, it still triggered FOMO in the Bitcoin ecosystem community. The first FSPK currently has an OTC trading price of $12-20 per token (1 token = 0.001 unit), with a cost of about $2 per token. The price has already increased by at least 6 times.

This collaboration between Magic Eden and Spark may also signify the upcoming launch of an on-chain trading market for LRC20. In addition to Magic Eden, Spark has also partnered with multiple projects, with the ecosystem taking shape. Furthermore, it has the support of the well-known VC a16z. Odaily Planet Daily will briefly introduce Spark, the currently issued LRC20 tokens, and its ecosystem projects in this article.

Spark: A Bitcoin Native L2 Designed for Payments and Settlement

Spark claims to be a Bitcoin native L2 designed for payments and settlement. However, Spark actually adopts an off-chain scaling solution, not an EVM-like chain or Rollup, does not support smart contracts, and does not have a virtual machine. Therefore, Spark enables users to achieve instant, low-cost, and permissionless self-custodial transactions for Bitcoin and other tokens (including stablecoins) off-chain. It also has native interoperability with the Lightning Network, allowing token transfers and receipts via the Lightning Network.

For Bitcoin, whether on-chain or off-chain scaling solutions, the primary concern for users is Bitcoin's security. That is, whether Bitcoin transitioning to L2 can be securely and smoothly withdrawn. The Spark network currently has only two operators, the parent company Lightspark and Flashnet (officially stated that more operators will be added in the future). Therefore, in theory, for all transactions that occur on Spark, at least one operator must authorize with the user for the transaction to be successful. This design naturally carries risks. If both operators are offline, the security of user funds is threatened.

However, even as a layer-two scaling solution, Spark still retains its trustless and Bitcoin-native characteristics. At the core of Spark is the usage of a Bitcoin-based shared signature scheme, running in the form of a distributed ledger without any additional consensus mechanism. Users' Bitcoin deposits are directly mapped to Spark without the need for any transfer bridges or wrapping. Additionally, users' funds always remain in a non-custodial state, allowing users to unilaterally withdraw back to the Bitcoin mainnet even if the Spark operator disappears, attempts censorship, or refuses to cooperate, ensuring fund security.

Lightspark is the parent company of Spark, founded by David Marcus, who previously served as the President of PayPal and Vice President of Messaging Products at Facebook. Marcus was also invited to attend the inaugural Cryptocurrency Summit held at the White House on March 8. In terms of fundraising, on May 13, 2022, Lightspark completed an oversubscribed Series A funding round of over $170 million led by a16z and Paradigm, with participation from Coatue Management, Ribbit Capital, Thrive Capital, Felix Capital, Matrix Partners, and Zeev Ventures, making for a prestigious lineup of investors.

On April 29, Spark launched the public testnet of its mainnet, with core features such as sending and receiving Bitcoin, creating tokens (e.g., stablecoins), and Lightning interoperability all fully operational. Developers can also utilize Spark's SDK to build applications. Regarding network fees, users are charged 0 fees for transactions on the Spark network. Depositing to or withdrawing Bitcoin from Spark incurs a certain on-chain Bitcoin fee (to be charged after 6-12 months), while moving Bitcoin from Spark to the Lightning Network requires a 0.25% fee plus routing fees. Although the official stance is that Spark has no native token and has no plans for any airdrops or token generation events, the market quickly embraced the LRC20 soon after the release of the Spark mainnet testnet.

Spark Native Token Protocol LRC20

LRC20 is the native token protocol launched by Spark in the summer of 2024. It is designed to be compatible with both the Bitcoin mainnet and the Lightning Network but is still under development. Currently, LRC20 can only operate on the Spark network.

LRC20 utilizes Bitcoin as the settlement layer, with Spark acting as the execution layer. Anyone can issue LRC20 tokens, but before issuance, users must broadcast a transaction on the mainnet embedding the token's identifier and metadata (name, supply, decimal points) in the OP_RETURN output. Upon successful broadcast, the tokens can be minted on Spark.

The LRC20 standard does not support a fair launch model. After token issuance, only the original issuing wallet can mint tokens. Other addresses can only obtain tokens through Dev airdrops or distributions. Additionally, LRC20 supports freeze and burn operations. The original issuing wallet can freeze tokens on any address, locking the tokens held by the frozen address, preventing them from receiving or sending the tokens unless unfrozen by the Dev; however, the original issuing wallet can only burn the tokens held at their own address, and burning is irreversible.

From the above features, it can be seen that LRC20 is indeed designed for stablecoin issuance, granting significant power to the original issuing address. However, for other addresses holding the tokens, if they do not relinquish freeze power, it also poses a centralization crisis. Nevertheless, there are already several LRC20 tokens with strong consensus in the market. Due to the initial requirement of using a terminal to mint and various tricky Dev operations, the tokens are somewhat chaotic, as will be separately discussed below.

FSPK (Ending in 8b93): The First LRC20 Token

· Token Supply: 21 tokens

· OTC Trading Price: $12-20 per token

· Public Key: 02b1d59c286bb79b39d0b3f14dc2a532b1e97e5c32c6376caea41e0b8c39708b93

· Issuance Date: May 8th

The FSPK ending in 8b93 is the first LRC20 token issued by @fspk_spark. The original total supply of the token was supposed to be 21 million; however, due to a supply setting error by the project team, the final total supply is 21 tokens (the worst Dev in history). Therefore, the current quantity of one FSPK (ending in 8b93) is 0.001 token, with a cost of 0.000021 BTC to mint one token, approximately $2. However, LRC20 itself does not allow for fair minting. Thus, the minting process essentially involves users sending money to the project wallet, and then the project manually distributing the tokens to the users, earning a total of 0.441 BTC, around $47,187. Currently, the OTC price of FSPK (ending in 8b93) ranges from $12 to $20 per token.

FSPKS: Correcting the First FSPK (Ending in 8b93)

· Token Supply: 21 million tokens

· OTC 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 initial supply of 21 FSPK was too small, so in order to better support upcoming DEX AMM or Spark DEX swaps, on May 21, the project team announced the issuance of a new token FSPKS to replace the original FSPK. The new FSPKS token will be airdropped to FSPK holders at a ratio of 1:1000. At the same time, the project team stated that the old FSPK is no longer valid and will not appear in future AMMs.

FSPK (Ending in 6c82)

· Total Token Supply: 21 million

· OTC Trading Price: $4-10 per unit (1 unit = 1000 tokens)

· Public Key: 0374f5629ac68dbdf9600cc14c763b8be9f1ebb198b3c568b47f9811efbcf56c82

· Issuance Date: May 11

Due to the significant challenges faced by players in using the initial FSPK (Ending in 8b93), such as transactions not confirming, tokens not being received, etc., and with only a total of 21 initial FSPK (Ending in 8b93) tokens, the @Flashspark_ team airdropped the new FSPK (Ending in 6c82) to the first 21,000 transactions' addresses of the initial FSPK (Ending in 8b93) in chronological order, including both confirmed and unconfirmed transactions. The current OTC trading price is $4-10 per unit, but its consensus is weak.

SAT

· Total Token Supply: 210 trillion

· OTC Trading Price: N/A

· Public Key: 02757529fa69b70e55cee583c03d58936c39fff134b83808745db1ff41c1603bdb

· Issuance Date: May 11

SAT is also an airdrop to all addresses that minted the initial FSPK (Ending in 8b93) by the anonymous Dev. Due to its massive total supply and zero cost, SAT has garnered community attention, although it currently has no OTC price.

SNOW

· Total Token Supply: 21 million

· OTC Trading Price: $19 per unit

· Public Key: 0377abadfbab8cc1fd7382fab87835ab062fd72c3ae7662fa6b579210fca16cd59

· Issuance Date: May 17th

SNOW is launched by the Spark ecosystem project sparksat and is the first LRC20 token endorsed by a legitimate project team, hence the community's high recognition of it. Currently, its over-the-counter trading price is $19 per token, with a cost of only $1 (this fee is also charged by the project team), and the current price has increased 19 times.

Early Ecosystem Projects and Tools

One major difference between Spark and other short-lived new protocols is that, although still in its early stages, it has a few steadfast builders in its ecosystem, reminiscent of the early days of the BRC20 ecosystem. In addition to partnering with Magic Eden, Spark has also partnered with the stablecoin issuance protocol brale, planning to launch a stablecoin within the Bitcoin network; and partnered with the Web3 infrastructure Privy to help projects build dApps on Bitcoin.

Here are introductions to early Spark ecosystem projects and tools:

sparkscan

sparkscan is a browser for the Spark network, where users can enter a Spark network address on the website to view token balances, transaction records, etc., or enter a token public key to view information such as the number of token holders, total supply, transaction history, etc.

SparkSat

SparkSat is the first feature-rich web wallet tool on the Spark protocol and is also the project team behind the LRC20 token SNOW, not operated by Spark officially. By importing the mnemonic phrase into SparkSat, users can clearly view their asset situation and can directly perform Bitcoin mainnet deposits and withdrawals and Spark network and Lightning Network transactions through the front end of SparkSat. Users can also issue LRC20 tokens using this tool and have an all-in-one view of all LRC20 tokens, making it the "Unisat" of the Spark protocol.

Flashnet

Flashnet is one of the only 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 financing, with participation from UTXO Management, Accomplice, Soma Capital, etc. Flashnet is dedicated to building a permissionless, non-custodial, Bitcoin-native DEX and may also launch a Spark ecosystem DEX in the future. It has also collaborated with the stablecoin issuance protocol brale to launch the Bitcoin stablecoin USDB.

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