Hey, welcome all to my blog today in this blog I am going to explain blockchain technology and how Flamingo finance uses blockchain technology.
Before getting started we should need to know about blockchain technology is an information recording technique that makes it impossible or difficult to change or remove or manipulate the recorder information.
Blockchain is a type of DLT in which transactions are recorded with an immutable cryptographic signature called a hash. Hash is a function that converts an input form of letters or numbers into an encrypted output of fixed length is created using an algorithm and is essential to the blockchain management in cryptocurrency. In terms of governance, it can be decentralized or centralized.
The flamingo ecosystem was built on the NEO blockchain resemble the mishmash top definition protocols built on the ethereum blockchain. Flamingo proves it as China's massive hunger for cryptocurrencies and decentralized Finance by locking 1.6 billion dollars in value.
Five important factors of the Flamingo ecosystem:-
- Wrapper
- Swap
- Vault
- Perp
- DAO
WRAPPER
In generally wrapped token is a cryptocurrency token pegged to the value of another Cryptocurrency in the native blockchain. For example, the DTUBE token is a native token of an Avalon blockchain but you can able to trade this token in Uni swap which is an ethereum network so you can able to wrap the token of the DTUBE Avalon blockchain to DTUBE token of ethereum blockchain and perform the action. With this method, you can get the advantage of many chains and enjoy the benefit of it.
You can get back to the Original DTUBE token of the Avalon blockchain from the ethereum blockchain which is an available token with a small number of fees for the liquidation provider.
SWAP
Swapping is a very simple process that we can able to understand by means of real-life purchases. For example, we are purchasing gold in the jewelry shop in exchange for cash. We can able to exchange the gold which we purchased from the jewelry for cash.
When the pool contract is created the initial token will be zero in the liquidity. So someone has to add liquidity tokens. so this liquidity provider will get the benefit of swap fees, when someone uses the swap there will be some amount of fees they should need to provide for the swap operation that will be going for the liquidity providers. Liquid provided token will be burnt when liquidity provider withdraws their liquidity and they can get back their deposited token.
VAULT
Users who take the white-listed Rapid tokens and liquidity provider tokens will get FLM tokens into the vault.
Vault has three-phase where I didn't have much knowledge here am going to provide the three different phases info from the whitepaper.
Phase 1 - During this "Mint Rush" period, 50,000,000 FLM will be distributed to users staking whitelisted wrapped tokens into Vault.
Phase 2 - During this "Mint Rush 2" period, FLM will be distributed to users staking whitelisted wrapped tokens into Vault as scheduled in the following Tokenomics section.
Phase 3 - Together with the launch of Swap, users can stake whitelisted LP tokens to receive FLM.
PERPETUAL
A perpetual contract is a derivative similar to a futures contract but without an expiry date.
Key features of Perpetual Protocol:
- 20x Leverage On-Chain Perpetual Contact
Traders can trade with up to 20x leverage long or short, have transparent fees, and 24/7 guaranteed liquidity.- Guaranteed Liquidity Provided by our vAMM
Every asset can be supported via a perpetual contract on Perpetual Protocol. Whether it’s gold, fiat, BTC, BCH, ETH, ERC-20s, XRP, EOS, LTC, ZEC, XMR, and more — Perpetual Protocol can support it all. All that Perpetual Protocol requires is a price feed for the underlying asset from an oracle.- Zero Impermanent Loss from Underlying Price Fluctuation
In contrast to popular DeFi protocols that utilize AMMs such as Uniswap and Balancer, the stakes on Perpetual Protocol do not suffer from any impermanent losses caused by price fluctuation.
Flamingo users can leverage the wrapped tokens for NEO BTC ETH USDT ONT with the help of a polynetwork. We can perform Margin trade with leverage of 5 * for that we have to know the basics like Position Opening, Position AdjustmentTransaction Fee, Liquidation.
DAO
DAO stands for DECENTRALIZED AUTONOMOUS ORGANIZATION. This stands for the Governance of the organization here in Flamingo finance decentralized autonomous organization. So lets we discuss our traditional organization vs decentralized organization.
In traditional organization method, it forms and hierarchical method of power to take a decision of an organization. You can see that in the below image the top of the organization edition so then it goes to senior management then goes to middle management and junior management supervisor and to the final staff. Here one person is responsible for the error caused inside the organization. The CEO of the organization unable to change anything inside the organization.
In a decentralized autonomous organization, there is no hierarchical formation the everyone who participated has a chance to submit their opinion. If everyone agrees with the opinion that it will be implemented in the decentralized organization.
Clear in Flamingo finance protocol the decentralized decisions will be e taken by means of voting the people who have the highest liquidation pool provider and the native FLM token holders have major power in the decentralized voting.
I am not a pro in these types of content so I used many external sources to create this content all the sources are mentioned below.
- Project Spotlight: Flamingo Finance, China’s Full Stack DeFi Protocol.
- Flamingo Litepaper.
- Tokenized Networks: What is a DAO?.
- What is Perpetual Protocol?.
- Liquidity pool.
Note:- All images used above are originally copyright free and sources are mentioned.