What Is the Future of AMP Staking

What Is the Future of AMP Staking

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Jonathan
Jonathan

An editor at Coincrop


22 Sept 2022 | 23 min read
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MP is a digital collateral token designed to facilitate fast and efficient value transfer, especially for use cases that prioritize security and irreversibility. AMP acts as insurance for the value of any unconfirmed transfer, a process which can take seconds to hours to days.

AMP tokens that have been used to collateralize a transfer are typically released when consensus for a specific transaction is obtained, allowing them to be used to collateralize another transaction. If consensus for the transfer does not exist, the AMP collateral may instead be sold to cover losses.

AMP allows for immediate, verifiable assurances for all pending or future value transfers, allowing any activities contingent on the transfer to proceed without delay.

Individuals and organizations may profit from the security and efficiency of collateral that is transparently attested on an unchangeable ledger by taking advantage of AMP as collateral.

History of AMP

To understand AMP, first you need to know the history of Flexa and its road to understand why and where AMP has come from. 

Flexa is a cryptocurrency payments firm based in New York that was established in 2018 by Daniel Maccabe, Trevor Filer, Tyler Spalding, and Zackary Kilgore. Tyler has been the public face of Flexa since its creation; he is an MIT and Harvard graduate who previously worked for major aerospace firms including Lockhead Martin and NASA. 

Flexa was funded through three private sales of the Flexa coin or FXC token in 2018 and early 2019. The April sale raised $14.1 million from well-known venture capital firms, including Pantera Capital and Access Ventures.

Flexa launched their SPEDN App not long after, which enables customers to pay at over 30,000 merchants in the United States using Bitcoin, Ethereum, and Geminis GUSD Stablecoin. After adding litecoin and Zcash to their supported cryptocurrencies, Flex expanded their operations into Canada, onboarding an additional 10,000 merchants.

Coinbase announced in July 2020 that Flexacoin was one of the currencies they were considering adding to their exchange. However, only a short time after Flexa made the announcement, it revealed a new crypto token to be known as AMP. Flexa said that it had been in preparation for over 6 months with the help of consensus. 

Flexa created AMP because their existing smart contract, Flexacoins, could not be upgraded to support the new functionalities they desired.

In September 2020, they enabled users the ability to convert their FXC into AMP at a 1:1 ratio. In June 2021, Coinbase listed AMP.

How Does AMP Work?

Flexa and AMP are two separate technologies that work together to create a unique payment solution. Flexas payment protocols enable you to pay with over 20 cryptocurrency and four stablecoins at over 40,000 merchants in the United States and Canada. 

What separates Flexa from other crypto payment methods is that the merchant has the option to automatically convertcrypto payments into their desired Fiat currency.

Flexa cryptoexchanges partner with these merchants to automatically and inconspicuously convert the digital assets into cash, which is then wire-transferred to the merchant's bank account, and this separates the from other crypto payments.

Not only is this cleaver, but it's also scalable. Exchanges such as Coinbase and Gemini are available in 100s of counties and have bank accounts in most major regions. This makes for quick and easy payments to merchants.

Simply scan a single time QR code on the phone in the same manner you would for other products. Because Flexa is created by a business, its payment method isn't open source.

Also, to utilize the SPEDN App and Gemini pay out, which both employ Flexas payment system, a merchant must go through know-your-customer (KYC).

The AMP token is open source, meaning that any company looking to break into the crypto payments market can use it as part of their own payment protocol.

The aim of the AMP token is to serve as collateral for transactions made using the Flexa payment system.

To appreciate how this works and why it is significant, consider if you're buying a donut and Dunkin Donuts using Litecoin (LTC) (this sale can truly be completed).

It may take Dunkin Donuts around 30 minutes to confirm your payment, but this is due to the 12 confirmation blocks that are needed. Although it's not ideal, there is no other way at the moment.

If the merchant considers a LTC transaction to be good as soon as it is completed, there's a chance (however small) that the transaction will fail for any reason, such as a chain halt or a hard fork. For every cryptocurrency- even those that offer instant transaction finality like Algorand when a block is made- this possibility exists. Not only that, but this risk endures until the cryptocurrency is exchanged for fiat behind the scenes and sent to their bank, which takes time.

To address this problem, a quantity of AMP tokens roughly equivalent to the value of your LTC transaction is trapped in a special smart contract for a brief period.

For example, this is $3 worth of AMP for your $2 donut. So, if your LTC payment fails, these AMP tokens are instantly sold for fiat on Gemini or Coinbase to ensure that the merchant receives their money. AMP is slightly collateralized so that the merchant will be guaranteed to get their $2 even if the crypto market crashes.

This is the best form of centralized-decentralized finance in practice.

AMP Staking

AMP Staking is the process of holding tokens in a wallet to support the operations of a blockchain network. By using AMP Staking, validators (those who stake their tokens) help to keep the network secure and running smoothly. In return for their service, validators typically earn rewards in the form of newly minted tokens or transaction fees on the AMP staking network.

AMP Staking offers a number of advantages for those looking to stake their tokens. First, AMP staking uses a unique Dual Token System that provides holders with two types of tokens: AMPs (ERC-20) and Airdrops (EOS). This system allows for increased security and flexibility when using AMP staking, as it separates the functions

The collateral from AMP staking used for crypto payments comes from the user who stake their tokens with payment providers leveraging the Flexa payment protocol are SPEDN and Gemini pay, AMP Staking. 

AMP Staking with these cryptocurrency payment providers transforms them into a single large smart contract that serves as a sort of Collateral reserve. This Reserve smart contract will occasionally lock small portions of AMP into smaller smart contracts, within AMP Staking. This way, transactions like the one we just covered can be collateralized with specific cryptocurrencies. 

The AMP token (AMP) is a cryptocurrency that powers the AMP Network, a decentralized lending platform based on the Ethereum blockchain. The AMP Network's goal is to offer borrowers quick loans and give lenders a chance for greater earnings than they would receive from conventional lending products.

AMP staking is the process of holding AMP tokens in your wallet to support the network, known as AMP Staking. The more AMP tokens you have and the longer you stake them, the higher your rewards will be within the AMP Staking system.

AMP Staking may be done on the Metamask wallet on the Flexa capacity app page, in exchange for AMP Staking, users earn a small cut of the merchant fees that those payment apps receive, and this transaction can be collateralized by AMP, within AMP Staking.

However, these fees will not be very profitable right now because these apps are only starting to get adoption. That is why an additional 1 billion per year will be issued to AMP stakers (AMP Staking) for the next few years.

Unfortunately, even with the additional token issuance, AMP staking rewards are not particularly rewarding, according to the website for AMP staking rewards.

Though some tokens may be locked from time to time with the AMP Staking platofrm, there is no lock-up or unlock period, which is a great function.

Because the protocol assumes that not everyone will withdraw at the same time, it merely transfers you AMP from the reserve contract if yours is locked up as crypto transaction collateral.

The AMP token is used to pay fees on the AMP Network, including loan origination fees, interest payments, and liquidity provider fees. Users are rewarded with AMP tokens for AMP staking them to help support the network.

AMP Staking is a method for users to earn rewards by keeping AMP tokens in their wallets and supporting the network. Users may help secure the network and receive interest payments by AMP Staking.

Although the AMP Network is new, the AMP token is not currently listed on any major exchanges. The project's creators are, however, working hard to have the currency listed on additional exchanges and get more people involved with the platform.

Send AMP

Once staked to a partition, AMP is ready to collateralize a transfer. With the use of collateral pools, AMP effectively decentralizes the risk of asset transfer—especially suitable for fraud-proof networks and real-world applications.

To send your AMP, you will need to have some ETH in your account to cover gas fees.

1. Go to https://AMPtoken.org/ and sign in or create an account

2. On the main page, select "send" from the top menu

3. Enter the amount of AMP you wish to send and the receiving address. Select "collateralize" from the dropdown menu.

4. Click "Send"

5. A pop-up window will appear asking you to confirm the transaction. Click "Confirm"

Your transaction is now complete! The recipient will receive their AMP shortly. If they do not have a collateral pool, they can create one easily by following the steps above.

Receive AMP

To receive AMP, you will need to have a collateral pool set up. If you do not have a collateral pool, you can create one easily by following the steps below.

1. Go to https://AMPtoken.org/ and sign in or create an account

2. On the main page, select "receive" from the top menu

3. Enter the amount of AMP you wish to receive and your receiving address. Select "collateralize" from the dropdown menu.

4. Click "Receive"

5. A pop-up window will appear asking you to confirm the transaction. Click "Confirm"

Repeat With AMP

AMP also simplifies network reward distribution once a transfer is complete. The AMP smart contracts offer a variety of built-in incentive models, including micro-distributions and continuous compounding. These allow for creative ways to design around the trade-offs of different staking strategies, risk appetites, and return objectives.

To learn more about how this work, or to explore other features of AMP, check out the documentation within their website or join the community on Discord.

Tokenomics 

The maximum AMP supply of the new cryptocurrency is 100 billion, the same as that of Flexacoin.

Because not every FXC token was redeemed for AMP, the total supply is just north of 99 billion. On the face of it, it would seem that there are over 800 million missing, however, AMP can still be created using the FLEXA capacity App, and quite importantly there is no deadline for completing this conversion.   

The FXC, AMP pie is divided as follows:

25% Merchant development fund

25% Developer grants

20% Flexa Founder and employees

20% Sold during 3 token sales

10% set aside for network development fund

These tokens will all be subject to vesting schedules until 2045, and this information available with the company website/app.

AMP Road Map

Flexa is soon to merge with Shopify, providing 1.7 million new merchants in the process, this is a massive move for Flexa.

Flexa is also working on integrating the ability to stake AMP tokens directly from within certain wallets, such as Coinbase and Gemini. The reason behind this move is because AMP Staking using Metamask on Flexas capacity app is an expense cost and is down to the Ethereum gas fees.

To make it easier to move and stake AMP tokens, Flexa is also investigating ways to connect with layer 2 scaling technologies on Ethereum.

Flexa is also working on making AMP a spendable token within the SPEDN mobile app, as well as numerous additional assets.

How Much Interest Can I Earn on AMP?

Below are a number of ways to earn interest on AMP:

OrganizationDeposit assetsReward assetsAPY Rate
CoinUnited

Saving

Deposit AmpAmp (AMP)

Earn AmpAmp (AMP)

15.2% - flexible

Bitrue

Saving

Deposit AmpAmp (AMP)

Earn AmpAmp (AMP)

5.00% - flexible

Vauld

Saving

Deposit AmpAmp (AMP)

Earn AmpAmp (AMP)

1.00% - fixed (30 days)

Vauld

Saving

Deposit AmpAmp (AMP)

Earn AmpAmp (AMP)

0.50% - flexible

Gemini

Saving

Deposit AmpAmp (AMP)

Earn AmpAmp (AMP)

0.45% - flexible

Data provided by Seedling

Conclusion

Keep in mind that the price of AMPs is largely affected by FLEXA's actions or lack thereof. This is a technical distinction that does not change the fact that it is, in essence, a new cryptocurrency with features enough to avoid being banned by regulators. It is why AMP has its own website, its own social media its own blog and no road map. AMP has its own website, social media accounts, a blog, and no road map since it is completely autonomous, you must remember that nobody controls the token.

However, because the conversion was carried out via Flexas FSC to AMP, it may be an effortless sidestep of securities laws since regulation is adapting, as it was listed on both Coinbase and Gemini, both of which are known for being among the most scrupulous in the crypto world.

The biggest risk to AMP is its own Tokenomics, as the value of AMPS comes from its use as a form of collateral for crypto payments.

The need for AMP collateral with probably continues to rise and so too will the price, but the problem there is if AMP pumps to much, most of the AMP being staked will be sold and this will cause the price to drop or worse.

Of course, this assumes that FLEXA, Gemini Pay, and other AMP-based payment projects will be able to acquire enough adoption to create the demand for AMP and make AMP Staking worthwhile.


Jonathan

Jonathan

An editor at Coincrop
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Jonathan is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely sailing.


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