There’s a new Decentralized Finance (DeFi) trend taking the world by storm, and it’s something you’ve probably never heard of. The NEO blockchain currently offers the Flamingo Finance token (FLM), which is made for people who can’t afford the costly nature of Ethereum. In this quick brief, let’s check out why it’s been attracting so many DeFi enthusiasts.
No idea what we mean by DeFi? Check out our introduction to DeFi before you keep reading!
Ethereum’s Latest Competitor
The Flamingo Finance protocol is the NEO Foundation’s answer to Ethereum’s overpopulated and overly-famous DeFi protocols. The new protocol offers a platform that takes care of crypto miner’s front and back end issues, centralized in one convenient location, all thanks to NEO Global Development (NGD).
Flamingo Finance: The New Underdog
This new DeFi protocol is full-stack and interoperable thanks to the NEO blockchain. To access it, you must first get yourself a NeoLine wallet if you’re looking to work with NEO assets, the Cyano wallet for ONT tokens, and the Metamask wallet for ETH. The entire platform works smoothly, as they’ve successfully compartmentalized their entire systems of operations.
Everything You Need to Know About Cryptocurrency Wallets
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The Five Pillars of Flamingo Finance
For it to work, Flamingo uses Wrapper, Perp, Swap, Vault, and DAO to successfully build a fully-functional ecosystem inside the NEO blockchain. But what exactly do these terms mean?
Flamingo makes use of Wrapper for inter-chain interaction of several assets of blockchain. Because it can interact with NEO, Ontology, Ethereum, and Bitcoin, these assets can be easily converted to NEP-5 tokens for use inside NEO.
Perp uses automatic market-making for a perpetual contract exchange that helps in working with several hosts of assets. In other words, what’s good about it is that it gives you leverage for either long or short contracts for up to 10x the value in place.
Swap is the part that handles the tokens from Wrapper for the parent blockchain, making use of the automatic on-chain market to give everything liquidity inside the system. From here, centralized liquidity occurs as everyone enters assets through NEP-5.
Vault is primarily for staking, mining, and managing assets. Moreover, Vault gives out collateralized stablecoins, as it rewards its users with FLM, the native token of the NEO blockchain.
DAO stands for Decentralized Autonomous Organization. Above all, it allows for community involvement all across the platform, as it makes sure that the other pillars are working in the best way possible. It takes care of parameter configuration, functionality changes, and token economics.
Flamincome: What Is It & How Does It Work?
Of course, the protocol is self-aware, so it works in a DeFi fashion. That’s why it’s now a dedicated side quest for liquidity mining and yield farming.
Self-awareness is always key to a successful business. It works a lot like Yearn Finance, with an optimizer and normalizer in tow. The normalizer transforms interest-based assets into synthetic assets, while the optimizer turns staked assets into interest-focused assets.
It’s basically a cyclical food chain. To make things even better, the synthetic assets coming out of the normalizer can easily be used on other DeFi networks for mining convenience.