Neo founder, Da Hongfei, has revealed Flamingo, a new Neo-based full-stack decentralized finance (DeFi) protocol. Under incubation by Neo Global Development (NGD), Flamingo is tentatively expected to begin rolling out in September 2020, with features such as a cross-chain asset gateway, automated market making (AMM)-based swaps, synthetic stablecoins, and AMM-based perpetual trading contracts.
In early August 2020, Da acknowledged that the Neo ecosystem is missing essential DeFi components and noted plans to pursue their development. Moving forward, Da states:
Flamingo aims to deliver a comprehensive array of modules and tools to support a variety of use cases, from asset cross-chain and on-chain liquidity provision to deposit assets and reward distribution. FLM is set to become a key Neo-based asset which will comprise fees, collaterals and governance functions.
What is Flamingo?
Flamingo is a DeFi protocol that seeks to improve the liquidity and capital efficiency of financial applications and reduce investor risk. It will be comprised of five components: Wrapper, Swap, Vault, Perp, and a decentralized autonomous organization (DAO).
The components are described as follows:
- Wrapper – A cross-chain gateway with support for BTC, ETH, and ONT tokens, among others. Wrapper is intended to mint assets based on the Neo token standard.
- Swap – An onchain exchange that will provide liquidity via AMM’s comprised of NEO, GAS, NEP-5 tokens, and tokens from other supported ecosystems.
- Vault – A “one-stop asset manager” where users can stake assets, mint synthetic collateralized stablecoins, or mine the FLM platform token. The Vault module is intended to provide functionality for token swapping by hosting liquidity pools of various baskets of tokens.
- Perp (perpetual contract platform) – A non-custodial exchange for any token supported by the Flamingo DeFi protocol. Perp aims to offer margins for leveraged traders through the synthetic stablecoin (FUSD) issued via AMM’s in the Vault.
- DAO – A component that allows the community to voice their input and shape the future of Flamingo protocol.
Together, Da hopes these components will enable Flamingo to “eventually [realize] the support of comprehensive cross-chain transfers, reward mining, swap transactions, liquidity pool construction, liquidity supply incentives, stablecoin mint, and perpetual contracts.”
Flamingo will feature its own Neo-based project token, FLM, which will be 100% distributed through contribution-based participation from the community – no pre-mine and no pre-distribution.
In the announcement, Da noted four different ways users can earn FLM:
- Staking of cross-chain assets
- Contributing to the liquidity pool
- Staking of synthetic a stablecoin (FUSD) to provide margin liquidity
- Participation in governance processes.
The earning of FLM via the staking of cross-chain assets will only be available for a two-week “Mint-Rush period,” for which dates have not yet been announced. During this time frame, BTC, ETH, and ONT, along with stablecoins such as USDT will be supported. NGD intends to distribute approximately 5% of the FLM token supply during the first two-week Mint-Rush.
Flamingo is Neo’s response to the recent DeFi movement in the blockchain industry. Though there are several similarities to other blockchain-based DeFi projects, the Neo platform offers various unique propositions.
First, the recently launched Poly Network will allow Flamingo to be interoperable across blockchain networks through cross-chain atomic swaps. Da noted, “With Poly Network, Flamingo will become the first financial protocol within the DeFi market to support multi-chain asset mobility, thus overcoming single-chain market limitations while delivering unmatched efficiency.”
Second, the Flamingo protocol will offer a fully integrated native AMM liquidity pool, which increases efficiency and liquidity by removing the fragmentation of AMMs and the over-collateralization of assets.
Lastly, Flamingo aims to incentivize long-term and sustainable community participation. To achieve this, the FLM token will be distributed to community members based on their participation within the Flamingo ecosystem.
Flamingo plans to launch Wrapper and Swap in September 2020, with Vault, Perp, and DOA following at a near-monthly cadence.
NGD also plans to gather feedback from the community on topics such as external asset types and the open governance mechanism of the DAO.
In concluding the announcement, Da stated, “This is just the beginning. As a community-driven open ecosystem, Neo welcomes all public chains, developers, and investors to build the smart economy of the future with us together.”
The full announcement can be found at the link below: