The Neo leadership has indicated it will not use the majority of its NEO holdings to accumulate FLM tokens during the Flamingo Finance Mint Rush. Neo plans to accumulate a “minority share” during the Mint Rush, expected to begin on Friday, September 25th.
Recently, concern within the Neo community sprung forth that the Neo Foundation (NF) would use its approximately 42.24 million NEO under management to mint FLM tokens. The anxiety was rooted in an inequitable FLM token distribution to NEO token holders, or that NF may tap into coffers designated to fund the development of the Neo ecosystem.
In a recent Neo News Today podcast, Yuan Gao, NGD head of marketing, confirmed the NF has allocated a percentage of its holdings to participate, but do not intend to use it all unless deemed necessary.
The Neo Foundation won’t stake all of its NEO into [Flamingo]; there is too much. It doesn’t make sense for the Foundation to mint most of the FLM because it’s a [decentralized finance] project, and won’t work that way if one party takes the majority stake of the token. So, the Neo Foundation is going to have a minority share.
Gao noted the NF will acquire FLM for two primary reasons.
First, NF intends to provide liquidity to Flamingo’s upcoming Swap module, an on-chain exchange. For the Swap module to work, there needs to be an available pool comprised of NEO, GAS, NEP-5, and other supported tokens to trade. Gao noted:
When the Swap launches, there needs to be some party to bootstrap the liquidity pools. The Foundation is going to take on that role. That’s why they will also need to have FLM to [take part].
Secondly, NF intends to participate in future voting and governance processes, in which FLM tokens will play a key role. During its initial phases, the NF and Neo Global Development is managing the Flamingo project directly. However, in December 2020, this responsibility is scheduled to be passed to the community to make decisions about the direction of Flamingo via a decentralized autonomous organization (DAO) governance model. Gao said:
The Foundation and NGD want to have a minor influence on the future governance of Flamingo. So, that’s one of the [other] major reasons why Foundation wants to participate.
Through the DAO, FLM token holders will have the ability to vote on an operation plan for future FLM token distributions. Also, DAO participants will be able to vote on other issues such as parameter configuration and functionality improvements.
A Mint Rush user guide can be found at the following link:
The full interview can be found below: