Flamingo Finance is a DeFi (Decentralized Finance) platform built on the NEO blockchain and its Poly Network protocol which is designed for cross-blockchain interoperability. DeFi has been revolutionizing the financial transactions by using the secure distributed ledgers, similar to that which is used in the blockchains. In fact, DeFi often operates on top of cryptocurrency blockchains. DeFi removes the control of the third parties like banks and other financial institutions on money and financial services, eliminating fees that they impose when their services are used. DeFi gives the users more control of their money since it’s stored in digital wallets rather than in banks. Transactions are also completed much faster since there is no need for an intermediary to complete the transactions.
Flamingo Finance consists of an ecosystem of several DeFi applications, providing the users everything they need in one platform. Flamingo Finance has launched five services since its inauguration in 2020: a cross-blockchain asset gateway, blockchain interoperability, an on-blockchain liquidity pool, a blockchain asset vault, and a perpetual contract trading platform.
Here’s an overview of the services offered by Flamingo Finance:
Income (Flamincome) - combines yield farming and cross-chain functionalities. Users can either deposit their income and earn a reward or wrap their tokens and use them on other services without earning rewards.
Wrapper - enables blockchain interoperability on the platform. Wrapper works with tokens from different platforms such as Bitcoin, Ethereum, and Ontology. These tokens need to be “wrapped” or converted to NEP-5 tokens before they can be used on the NEO network.
Swap - provides liquidity options to users. In the platform, Liquidity Providers provide NEP-5 tokens and converge on a pool. Users can exchange their token assets directly on Flamingo’s Liquidity Pool or they can stake their assets into the swap pool and earn the LP tokens as rewards.
Vault - provides asset management, mining, and staking services. This is where the FLM token is distributed to stakers who deposit their assets in the vault and where the issuance of collateralized stablecoins is handled.
Perp - handles the vAMM-based perpetual contract on Flamingo’s platform. A perpetual contract has no expiration date or settlement, hence perpetual, where “Perp” is also derived.
Flamingo practices distributed governance or DAO (Decentralized Autonomous Organization), involving its community in running the platform. The community is involved in whatever’s happening in Flamingo’s services and in issues such as token economics, functionality changes, and parameter configuration. [1]
Flamingo’s Native Token
FLM is Flamingo’s native token which was built on NEO’s NEP-5 standard. FLM is dedicated to governance and is distributed according to one’s participation on the network. FLM is earned when users add liquidity to liquidity pools, stake their liquidity pool tokens, and when they vote for proposals made on Flamingo’s DAO.
FLM was initially handled by the Flamingo team which was distributed only to participants that staked their assets on the protocol. The release of FLM tokens was pre-scheduled and selling was not allowed back then.
Flamingo’s team later passed on the handling of the FLM tokens to its DAO community and it can now be bought, sold, and traded in crypto exchanges such as Binance, Gate.io, and OKEx.
Flamingo operates on the Proof-of-Stake consensus mechanism. Thus, FLM tokens can be staked so that the users can earn more tokens while keeping the network secure.
Proof-of-Stake and Staking Tokens
Staking is one way to earn a passive income by depositing your digital assets and earning interest afterwards, similar to how the banks pay you the interest for your deposits to be used for other services such as loans. Staking is only possible for platforms that use the Proof-of-Stake mechanism where the validators are randomly selected from a pool of stakers, who then earn the right to add blocks to the blockchain. Validators earn rewards for every verified transaction or blocks. To keep the network secure, the block added by the validator will be verified and if found invalid, the validator will lose a portion of the staked assets or in some cases, the whole of it.
How to Stake FLM
Crypto exchanges also offer staking services where they do the staking on the user’s behalf and earn a commission from the user’s rewards. Flamingo Finance has integrated staking in the Vault which allows the users to stake their LP tokens to earn extra tokens. If you don’t have LP tokens yet, you can follow the following staking process to start staking in Flamingo Finance’s platform:
First, you need a wallet supported by the Flamingo platform. Currently, Flamingo supports MetaMask and NeoLine wallets for converting the ETH to NEP-5 tokens, Neoline or o3 Wallet for wrapping NEO to nNEO, and Cyano plugin wallet and NeoLine wallet for converting ONTd to pONT. Next, go to Wrap to wrap your tokens to NEP-5 standard so they can be used on Flamingo’s platform. For example, if you have NEO tokens, these will be wrapped as bNEO tokens. Next, you need to go to Swap to obtain your LP (Liquidity Pool) tokens. This is where you connect your wallet. Once your wallet is connected, go to the Pool tab, click Add Liquidity, and select the token pair that you want to add liquidity to. Then, click Supply and confirm the transaction. Finally, you can go to the Vault to stake your LP tokens by simply clicking Stake.
If you want to check the FLM tokens that you can claim, navigate to the Claimable FLM section of the Vault interface. You can also claim your FLM rewards from this section by clicking Claim.
Flamingo has also launched three new features in 2022 that would make staking easier: Reverse Pools, PoolSwap, and Restake. Reverse Pools allow the users to stake FLM + another token, and receive the other token as rewards, instead of just FLM. PoolSwap makes the moving of liquidity from one pool to another easier with just one click. This removes some of the steps in the staking process to make it faster. ReStake combines claiming and converting the FLM into both the tokens in the LP, adding liquidity to the LP, and staking the FLP with just a single click instead of performing each step individually.
Conclusion
Flamingo Finance is a flexible and versatile DeFi that houses multiple applications in a single platform. It also provides low transaction fees and blockchain interoperability making it a cheaper and better alternative to most blockchains. Flamingo Finance also offers staking services that rewards the users with its native FLM tokens and recently, other tokens, too. Flamingo Finance has a lot more potential to be explored and with its powerful features, it certainly has a promising future in the DeFi space.
