Crypto Gem Series Part 3: Flamingo Finance

After Nexus Mutual, the next in our Crypto Gem series is Flamingo Finance. Built on the NEO blockchain, Flamingo Finance is a “full-stack” DeFi protocol that draws its liquidity from the cutting-edge interoperability protocol PolyNetwork. Originally, Flamingo Finance was based on the Ethereum protocols; however, it was later rebuilt on the NEO blockchain. At the heart of the project lies the interoperability between various blockchain networks and their related assets. Based on this, the Flamingo Finance ecosystem is built upon five main pillars: Wrapper, Swap, Vault, Perp, and DAO. The native governance token of Flamingo is known as FLM. 

The Flamingo project was incubated by the NGD, or Neo Global Development, in accordance with NEO’s vision of creating a Smart Economy focused entirely on decentralized finance. As a result, the primary aim of Flamingo Finance is to unleash the full potential of DeFi. This was also the first time that the NGD was incubating a Neo-based project. Earlier, NGD only committed to offering capital along with tech support.

The project’s early growth was to be aided by NGD, while its governance structure would gradually shift from POA (Proof-of-Authority) to DOA (Decentralized Autonomous Organization) and later be run by the community itself. 

Flamingo Background (Team and Advisors)

With the Neo blockchain being initially marketed and dubbed as the “Chinese Ethereum,” it was meant to be a Chinese phenomenon that would also promote the DeFi movement, which was gaining momentum in Asia at the time. As a consequence, Flamingo was founded by the same person who also co-founded Neo – Da Hongfei – a Chinese entrepreneur. 

When developing Flamingo Finance, Hongfei and his team consisting of Adam Yang and Yuan Gao wanted to bring about a completed DeFi project, particularly to those users who were already keen on pursuing the various applications of  DeFi. 

Hongfei is also the co-founder of another private blockchain-based service company known as OnChain. Before he learnt coding on his own and subsequently entered the blockchain field, Hongfei was also the CEO at IntPass Consulting, a consultancy firm based in Shanghai. 

Technology Architecture

The five pillars on which Flamingo is based are as follows: Wrapper, Swap, Vault, Perp, and DAO. 

Wrapper

The first pillar, Wrapper, is a cross-chain asset gateway that works similarly to DeFi projects like Synthetix and Ren, allowing users to build several “n-tokens” that can be pushed through various assets. Wrapper supports a number of different tokens, including Ontology, Ethereum, Neo, Kava, Terra, and others. Wrapper did not support Bitcoin at first, but this was added later. After wrapping tokens such as BTC, ETH, NEO, and others, users are able to convert them to NEP-5 tokens.

Swap

Swap, the Flamingo ecosystem’s second pillar,   allows you to exchange wrapped assets, FLMs, and other NEP-5 standard-based tokens. Swap is similar to Uniswap, which uses the CPMM (Constant Product Market Maker) model. Swap differs from Ethereum in that it only supports NEP-5 tokens, which are the Neo counterpart of Ethereum’s ERC-20 tokens. Users are also expected to provide two-sided liquidity and pay a 0.3 percent trading fee, just as they do in Uniswap.

Source: Linkedin 

Vault

The third pillar, known as Vault, is identical to yEarn Finance’s yVault feature. It serves as Flamingo’s one-stop asset manager, incorporating asset staking/mining and issuing guaranteed stablecoins, amongst many other things. Users can earn the flamingo governance token, FLM, by staking NEP-5 tokens in the vault. Users can also mint FUSD, a synthetic stablecoin pegged to the US dollar, using the Vault feature.

Source: Linkedin 

Perp

The fourth pillar, Perp, is a perpetual contract derivatives trading platform focused on AMM (Automated Market Maker), which enables users to leverage their NEP-5 tokens up to ten times. Traders can exchange perpetual contracts using the same CPMM model as they can in Swap. Traders can also stake FUSD in exchange for FLM.

The DAO

The DAO, or Decentralized Autonomous Organization, is the fifth pillar. Holders of the Flamingo token will vote on protocol changes and important topics like tokenomics, DeFi protocol features, and other governance operations through the DAO, and their participation will win them FLM.

Flamingo Token Economics 

There are 150,000,000 FLM, the governance token of Flamingo, in circulation, the supply of which is not capped. While there is no upper limit on the total supply of FLM, the issuance and distribution of new FLM tokens following the initial minting period were decided to be subject to the consensus of the ecosystem’s users.

Prior to its launch, it was determined that FLM would be fully distributed to the community on the basis of participation alone, with no pre-sale, pre-mint, or team distribution allowed. During the initial stages of Flamingo’s launch, users could earn these tokens by participating in various network activities. 

Approximately 50 million FLM was spread across various staking pools in the first week following the launch of the Flamingo Vault. It was decided that about 40 million FLM would be spread among liquidity providers from weeks 2 to 5 when Flamingo Swap was implemented. Between weeks 6 and 9, 30 million FLM was allocated to liquidity providers and FUSD minters once again. From week 10 to week 13, an additional $30 million was spread among liquidity providers, FUSD minters, and Perp traders.

Flamingo Milestone and Future Roadmap

In January 2021, Flamingo successfully completed the Perp Trading Competition, while they also launched FIP#2: Redesign of the Flamingo asset flow. The Perp Trading Competition was conducted from January 8 till January 21, while the Flamingo Asset Flow Redesign was launched on 28 January. On 3 March 2021, Flamingo also launched Asset Migration as part of the Redesigned Asset Flow project. 

Flamingo has always aspired to be a stepping stone in the growth of Neo’s DeFi ecosystem. However, Neo does recognize that its dedication to revolutionizing DeFi isn’t limited to Flamingo alone. From lending to insurance and asset management, both Neo and Flamingo are looking forward to several possibilities. 

Flamingo Price Performance History

The price of the Flamingo token is very similar to many yield farming distribution systems. Initially, FLM began trading at the peak of $1.59 per token, but with time, the token price came down to as low as $0.37 per token. The current token price stands at $0.98 per token. The current market capitalization of Flamingo finance stands at $146.80 million. 

It remains astonishing that the introduction of leveraged trading and a Decentralized Autonomous Organization, or DAO, had a significant impact on the token price of the FLM. Several prominent centralized exchanges like Binance, OKEX, FTX Exchange, etc., have FLM tokens listed on them, while liquidity mining sites LIKE Binance and OKEX even hosted Flamingo and its FLM token on their sites. 

Conclusion

Since Flamingo Finance is primarily based on the DeFi playbook of Ethereum, they are looking forward to improving their market share by bundling each protocol into one platform. Up until now, this has been a smart move which apparently could turn to be a massive success for Flamingo. 

However, due to its increased popularity, more active users are also entering the field, and this is where a lot of flaws in the Flamingo project became visible. High traffic to the website, in addition to an underdeveloped user interface, has not only caused confusion for users but caused several technical glitches as well. 

If Flamingo needs to scale to bigger heights, it definitely needs to check up on these issues and not rely on the strength of its large community alone, given the wide popularity of Neo and Flamingo Finance in the Asian community. 

If you’re interested in finding out more about Flamingo Finance, check them out below: 

Website – https://flamingo.finance/

Twitter – https://twitter.com/FlamingoFinance

Medium – https://medium.com/flamingo-finance

GitHub – https://github.com/flamingo-finance