Flamingo is a DeFi-based platform where users can convert and wrap assets, offer liquidity, and earn income through staking.
When a cryptocurrency is “wrapped,” its value is pegged to that of another token or asset, such as stocks, gold, shares, or real estate, and the token is then created for use in transactions on other platforms.
Flamingo is an initiative of NEO Global Development, the operational arm of the Neo Foundation.
The Neo Foundation is a non-profit that operates a blockchain-based network for the automated management of digital assets via smart contracts.
According to the Flamingo litepaper, the platform offers features including “Convert,” “Add,” and “Remove” liquidity, as well as “Stake” and “Unstake” tokens. Flamingo’s Automated Market Maker (AMM) on the chain is Convert.
The feature intends to let people trade any token for another. Flamingo’s Add liquidity function allows customers to contribute funds to Liquidity Pools (LP).
To gain incentives in FLM, the platform’s governance token, users can stake their LP tokens using the Stake and Unstake tool.
And users can always unstake their LP tokens with this capability. If a user unstakes his tokens, he still has legal possession.
However, he can always cut off access to funds for exchanging LP tokens for their underlying assets.
What is Flamingo Finance
Flamingo is an open, NEO-backed, full-stack DeFi protocol. The platform’s functionality depends on the network’s operations being separated into their respective components.
You can use the NeoLine wallet to store your NEO tokens, the Metamask wallet to store your Ether (ETH), and the Cyano plugin wallet to store your ONT tokens, and the system currently supports all three.
Who Are the Founders of Flamingo?
Flamingo was created by the Chinese entrepreneur Da Hongfei, who is also known for creating Neo, a blockchain network that competes with Ethereum. In addition, Hongfei established the private blockchain services firm OnChain.
Before training himself to code and breaking into the blockchain scene in 2013–2014, Da Hongfei was the CEO of the IntPass Consulting firm and a graduate of the South China University of Technology with a degree in English and technology.
What Makes Flamingo Unique?
Flamingo presents itself as a unified platform that integrates many Neo decentralized financial instruments into a single ecosystem that its members will administer through a decentralized autonomous organization.
It is becoming increasingly common for cryptocurrency blockchains to serve as the foundation for a wide range of decentralized financial solutions, collectively known as “decentralized finance.” DeFi platforms, which function as a secondary industry, share a central tenet with the cryptocurrency sector as a whole: the removal of intermediaries and single points of failure from monetary and financial systems.
DeFi companies arose in early 2019, and by mid-2020, they had amassed approximately $4 billion in collateral assets that were locked down.
Cryptocurrency lending, yield farming, and decentralized exchanges are among of DeFi’s most important use cases.
However, for most cryptocurrencies and their corresponding DeFi settings, these services are often supplied by a single, standalone platform.
Flamingo’s competitive edge is that it intends to provide a unified, user-governed platform for all the essential financial instruments for the Neo cryptocurrency token (token wrapping, liquidity pooling, asset vault, and contract trading).
Flamingo’s 5 Key Components
Here, automated on-chain market making is taken care of. Tokens that have been wrapped can access the parent blockchain’s liquidity using this module. Uniswap, a dominant DeFi platform, influences its strategy for automating market making. The NEO ecosystem’s Liquidity Providers (LPs) form a pool by contributing NEP-5 tokens.
This part of Flamingo allows blockchain assets to communicate with one another. Tokens from Bitcoin, Ethereum, NEO, and Ontology can be “wrapped” by being converted to NEP-5 tokens and used on the NEO network, thanks to Wrapper.
The Vault interface facilitates asset management, mining, and staking. Collateralized stablecoins are also issued on this network. Tokens of the FLM blockchain, exclusive to the Vault platform, are the medium of exchange for staked prizes (more on the token later).
Vault’s release dates are between September 25 and September 29, 2020.
The name “Perp” is an abbreviation for “perpetual,” The program was made specifically for use with agreements that will last forever. Various assets can be traded on an endless contract exchange powered by automated market creation. Both long and short positions on the exchange can use a leverage of up to 10X.
DAO – Decentralized Autonomous Organization (DAO)
Everything, including government, should be decentralized in a truly free and equal society. Flamingo uses DAO to provide maximum participation from the user base in the platform’s administration. Token economics, functionality updates, and parameter configuration are all concerns that fall under DAO.
Wrapper, Swap, Perp, and Vault are all modules where DAO typically has some say.
Flamingo Finance Token (FLM) and Flamingo USD (FUSD)
The native currency of Flamingo is FLM, which is used for governmental purposes. NEO’s NEP-5 standard was used in its construction. Interesting, there is no limit on the total number of tokens that can be created.
The circulation of FLM coins is based on user activity within the network. Staking cross-chain assets, LP tokens, FUSD, depositing stablecoins as a margin when engaging with perpetual contracts, and contributing to governance proposals will all result in the token being awarded to the stake.
Remember that the Flamingo team will deal with governance issues via proof-of-authority before DAO takes over (POA). Anyone interested in participating in the NEO DeFi ecosystem is welcome to hold FLM. In addition, FLM holders have the right to make suggestions to the DAO and to vote on those suggestions.
Flamingo supports FIP and FCCP proposals.
Features of the system’s design, such as those for risk management, liquidation, and liquidity enhancement, are all included in the Flamingo Improvement Proposal (FIP) scope. On the other hand, the Flamingo Configuration Change Proposal (FCCP) includes suggestions for modifying the Perp module’s FLM distribution method, the staking process, and the fee structure.
The platform’s stablecoin, FUSD, is tied to the US dollar (USD). To create a stablecoin, LP tokens must be staked. However, they need to burn the newly created FUSD to access their collateral.
Important features of Flamingo Finance
The NEO and Poly network ecosystems both include Flamingo as a key component. Poly was built on top of NEO by the Switcheo Network and Ontology. Cosmos, Bitcoin, Ontology, and Ethereum are just some of the blockchains with which the protocol is compatible.
Flamingo connects to NEO, which connects to Poly, and Poly, in turn, connects to other decentralized networks, bringing interoperability to the table.
Common DEXs that rely on a fully automated market maker model waste LP money. Flamingo improves capital efficiency by centralizing features like the liquidity pool (LP) and the collateral pool.
Example: Swap manages the LP while Vault stores the collateral. As a result, LPs can invest their tokens in Vault while still providing liquidity through Swap.
The lack of pre-mine support on the platform ensures a level playing field for all participants in the launch. Additionally, there is no coin distribution to the company’s original employees. In contrast, every single FLM token is shared among the users.
How Many Flamingo [FLM] Coins Are There in Circulation?
The intention is to release FLM tokens in multiple waves, with distribution determined by how actively each user uses the network. The Flamingo team stresses that no FLM coins will be sold, created, or distributed to the development team before the platform’s public launch.
During the “mint rush” period immediately following the introduction of the Flamingo Vault, 50,000,000 FLM will be awarded to staking pools.
Forty million extra FLM will be issued to liquidity providers after the launch of Flamingo Swap (weeks 2-5).
There will be a further 30 million FLM issued to liquidity providers and FUSD minters over weeks 6-9.
Lastly, the liquidity providers, FUSD minters, and Flamingo Perp dealers will split another 30 million FLM throughout weeks 10-13.
After the minting phase and the establishment of the governing decentralized autonomous organization, the issuance of additional FLM tokens and their distribution will be determined by a majority vote of the ecosystem’s users, and there is no hard cap on the overall FLM supply.