In a long-awaited move, Japanese cryptocurrency exchange GMO Internet Inc. has announced it will distribute previously delayed Songbird (SGB) tokens to select XRP holders — not in the form of cryptocurrency, but as a yen-denominated cash payout. This decision marks a significant update for investors who have been waiting since 2020 for full realization of benefits tied to the Flare Network ecosystem.
Background: The Flare and Songbird Airdrop Promise
Back in December 2020, Flare Networks launched an ambitious plan to bring smart contract functionality to the XRP Ledger by creating two parallel blockchains: Flare (FLR) and Songbird (SGB). As part of this initiative, a dual airdrop was promised to all XRP holders at the time of a snapshot taken on December 12, 2020.
Under the original terms:
- For every 1 XRP held, users were entitled to receive 0.1511 FLR and 0.1511 SGB.
- The Flare (FLR) tokens were eventually distributed after a lengthy delay caused by regulatory uncertainty surrounding Ripple’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC).
However, while FLR reached users in early 2023, SGB remained undistributed — until now.
Why the Delay?
The primary reason behind the SGB distribution delay was the same legal uncertainty affecting the broader XRP ecosystem. Since Flare’s launch depended on interoperability with XRP and its classification under U.S. securities law, the outcome of the Ripple vs. SEC case created hesitation among exchanges and custodians about distributing related assets.
GMO, being a regulated financial entity based in Japan, chose caution over speed. Rather than risk potential compliance issues, the exchange held back on issuing SGB until clarity improved — a decision that has now culminated in a practical resolution: distributing the value of SGB in Japanese yen.
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How the Yen-Based Distribution Works
Instead of delivering actual SGB tokens, GMO will credit eligible users with the JPY equivalent of their entitled SGB amount based on market valuations at the time of payout.
Key details:
- Eligibility: Users who held XRP on GMO’s exchange during the December 12, 2020 snapshot.
- Calculation: 0.1511 SGB per 1 XRP held, converted into yen using fair market value at distribution.
- Form of payout: Direct fiat deposit into user accounts — no wallet setup or crypto handling required.
This approach simplifies tax reporting for Japanese investors and aligns with local regulatory expectations, making it a strategic and user-friendly solution.
Understanding Songbird (SGB) and Its Role
Songbird is the canary network for Flare Network, designed as a testing ground for new features before deployment on the main Flare chain. Think of it as a “testnet with real economic value” — where developers can experiment without risking mainnet stability.
Core functions of Songbird include:
- Testing cross-chain messaging protocols (CCIP)
- Experimenting with decentralized finance (DeFi) applications
- Validating upgrades to Flare’s State Connector technology
While SGB itself has no direct utility outside the test environment, its distribution serves as both a reward mechanism and a way to decentralize network participation early.
Why This Matters for Crypto Investors
This development highlights several important trends in the digital asset space:
1. Regulatory Caution Shapes Distribution Models
As seen with GMO’s yen-based payout, compliance considerations are increasingly influencing how airdrops are executed — especially in highly regulated markets like Japan.
2. Value Preservation Through Alternative Payouts
Even when direct crypto distribution isn’t feasible, exchanges are finding ways to honor commitments through fiat equivalents, ensuring users don’t lose out due to external delays.
3. Long-Term Holder Rewards Are Becoming Standard
Projects like Flare reinforce the idea that long-term holding can yield unexpected rewards — sometimes years after the initial snapshot.
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Frequently Asked Questions (FAQ)
Q: Who qualifies for the SGB yen payout from GMO?
A: Only users who held XRP on GMO’s exchange at the time of the December 12, 2020 snapshot are eligible. Off-exchange wallet holders or users on other platforms do not qualify.
Q: Will I receive actual SGB tokens in the future?
A: GMO has not indicated plans to distribute SGB tokens directly. The yen payout is considered final compensation for the entitlement.
Q: Is the payout taxable in Japan?
A: Yes, under Japanese tax law, income from cryptocurrency-related rewards — including airdrops and cash equivalents — is treated as miscellaneous income and must be reported.
Q: How is the yen value of SGB determined?
A: GMO will use a fair market valuation method based on SGB trading prices around the time of distribution. Specific pricing mechanisms will be communicated to affected users.
Q: Can I still claim if I sold my XRP after 2020?
A: No. Eligibility is strictly based on holdings at the moment of the snapshot — December 12, 2020. Subsequent trades do not affect qualification.
Q: What is the difference between Flare (FLR) and Songbird (SGB)?
A: Flare is the mainnet blockchain enabling DeFi and smart contracts linked to XRP Ledger. Songbird is its experimental counterpart used for testing upgrades and protocols before mainnet deployment.
Looking Ahead: What’s Next for Flare and XRP Ecosystems?
With both FLR and now SGB distributions progressing — albeit in modified forms — confidence in Flare’s long-term viability is growing. Developers continue building decentralized applications (dApps), oracle networks, and cross-chain bridges on Flare, aiming to unlock smart contract capabilities for XRP holders without altering the core ledger.
Meanwhile, GMO’s decision sets a precedent for how regulated exchanges might handle future airdrops involving contested or delayed assets. By opting for fiat settlements, they balance user fairness with legal prudence.
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Final Thoughts
The delayed SGB payout by GMO may not have come in the form many expected, but it underscores a maturing crypto industry — one where regulatory alignment, user protection, and innovation coexist. For eligible XRP holders in Japan, this yen-based distribution represents closure on a years-long wait and a reminder that patience in crypto can indeed be rewarded.
As blockchain ecosystems evolve, expect more hybrid models like this — blending traditional finance mechanics with decentralized incentives — to emerge across global markets.
Core Keywords:
XRP holders, GMO exchange, Songbird SGB, Flare Network, cryptocurrency airdrop, yen payout, blockchain rewards