In an uncommon move in the blockchain industry, German-American Dirk Lueth decided with his co-founders to headquarter in Silicon Valley, the tech heart of the US. This meant that business strategies and product designs always had to take into account the harsh token climate since the SEC began actively pursuing ICOs in 2017. While most companies building in the web3 space decided to do so outside the US, Dirks’ start-up, Upland, was designed with regulatory compliance in mind so that changing regulatory landscape would not materially impact their project.. Instead of launching a tradable token, Upland focused on the development of the gaming platform and saw it grow from a metaverse replica of the planet Earth to an increasingly complex ecosystem complete with user-generated features, games and entertainment in an open economy.
As a Layer 1 Metaverse, Upland is open for players, entrepreneurs, creators, partners, and developers to build and expand it within and beyond its boundaries (“Ecosystem Partners”). These Ecosystem Partners utilize the foundational infrastructure and services provided by the platform for them, so that they may focus on value creation within the economy. In 2021, Upland introduced Spark into its economy as a foundational in-platform utility token. Spark is required for any stakeholder to create value in the form of world-building, community development, user-generated content, and unrestricted development of games, experiences, and services. Since its launch, Spark has never been sold to investors or given out to the team and cannot be tradable within the Upland metaverse. There are currently over 130,000 Spark holders in Upland and 93.6% of those who purchased Spark have used it to build in Upland.
The ruling in the Ripple case in the US in July 2023 created a new path for Upland to bridge out its existing in-game token to other chains. In addition to true ownership, this would allow holders to trade it. . The landmark case between Ripple and the Securities and Exchange Commission (SEC) ended with the Judge declaring that Ripple’s premier token, XRP, does not classify as a security when sold to the general public in programmatic exchanges, as in, when the buyer’s identity is unknown. However, the sale of XRP to institutional investors was deemed an unregistered sale of securities.
Realizing the opportunity and impact of this ruling, the Upland founders created a White Paper in September 2023 with the core idea of launching Sparkt as an ERC20 token on Ethereum.
In October, the community voted by an impressive 87.25% to approve the decision in a governance vote. The overwhelming support that followed a community review and comment process greenlighted the initiative to bridge Spark to Ethereum, where it will be mirrored and minted and equivalent to a one-thousandth of Spark named Sparklet.
Lueth explains that they are now preparing the bridging event, marking a unique case in the web3 space where rather than launching a token and then building an ecosystem, Upland is taking its 2-year in-app token externally.
“Adhering to our mission to build the largest digital open economy, Sparklet allows us to take the next step towards progressive decentralization in a responsible way while having mechanisms in place that can shield and protect Upland’s economy from unwanted externalities,” says Lueth. “The upside of Sparklet availability outside the Upland app includes higher visibility within the web3 gaming community, a higher degree of true ownership of digital assets for our users and ways to incentivize new creators, developers and builders to join the ecosystem.”
Sparklet equals one-thousandth (1/1,000) of one Spark and will exist on Ethereum as an ERC-20 token. Sparklet tokens will be able to be uploaded from Ethereum to Upland, where they will be converted into Spark at x/1,000 factor, while Spark tokens can be reclaimed from Upland to Ethereum using the reverse calculation.
As a non-inflationary token, a total of 1,000,000,000 Sparklet tokens as finite supply will be issued on Ethereum. These tokens will be mirrored by 1,000,000 Spark that will be minted in Upland on the EOS blockchain. The community-approved Sparklet White Paper highlights that the amount of Spark that is under ownership in Upland will always be exactly equal to the amount of Spark that is present in an escrow on the Ethereum bridge.
Ahead of the Sparklet launch and the bridging event, Upland is also conducting a number of airdrops, many of which operate on a reward system where supporters fulfill certain tasks to earn points which will in future be swapped for Sparklet. Lueth is not particularly concerned about the presence of airdrop farmers.
“We already have a strong community with 3M users, over 300,000 NFT holders and some 130,000 players in Upland who hold Spark. Many of them are strategy-gamers, others come for the ‘Roblox for Growups’ type experiences, but the value proposition goes beyond gaming. There are entrepreneurial opportunities in the platform where people can create value and make money – not through speculation but by creating digital assets, experiences and services which they can sell to others. Upland built the infrastructure to allow them to do that without the need for blockchain knowledge, through no-code minting, API connection to its economy, and more. Spark is the gas that fuels these actions, utilized for ecosystem partners to build value.”
