Amp is an open-source digital collateral and asset token that allows for instant, efficient, and irreversible collateralization of any type of value transfer. With a focus on security and immutability, the AMP token boasts a wide range of use cases. Thanks to the use of smart contracts that serve as collateral managers, Amp provides collateral partitions that enable tokens to be staked without moving wallet addresses. The first iteration of this was the Flexa network collateral manager. Moreover, Amp can be easily integrated into existing payment systems to facilitate the transfer of value for digital and physical assets.
In this article, we’re going to take a close look at Amp and the native AMP token (AMP). Also, we’ll discuss the background of the Amp project and the relationship between Amp and the Flexa network. Plus, we’ll explore the key value propositions of the Amp digital collateral model, along with Amp’s partitions and smart contract-based collateral managers.
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Amp’s Background
Following nearly a year of development and close support with one of the most successful blockchain software development companies in the industry, Consensys, the Amp asset token and staking platform was launched as the brainchild of the Flexa network. The team originally wanted to improve the security and transparency around the staking facilities of the platform’s native Flexacoin. However, they soon realized the full potential of the project was much bigger.
Amp is a digital collateral and asset token that can support the collateralization of any type of value transfer. This is achieved transparently, instantly, and digitally verifiably for a plethora of transaction types. This includes both digital and physical assets, like-kind or multi-assets.
Flexa Network & Amp
As of September 30th, 2020, Flexa network’s decentralized finance (DeFi) application Flexa Capacity ceased to support Flexacoin (FXC) as digital collateral. Moreover, Flexa destroyed ownership of the Flexacoin token contract. Flexacoin token holders were able to migrate their tokens to AMP tokens at a 1:1 ratio. Since then, Flexa Capacity network rewards have been distributed according to the number of AMP tokens held. Also from this date, AMP tokens began being used as collateral on the platform.
As one of the leaders in digital-only payments, Flexa network claims to be the fastest and “most fraud-proof payments network in the world”. Flexa can confirm merchant transactions almost instantly, by securing payment authorization whilst the underlying asset remains unconfirmed. This is thanks to using Amp partitions (mentioned further on) as collateral pools.
The Flexa network team dedicated two years’ worth of research and development towards the AMP token protocol. Furthermore, Flexa released the first open-source Amp collateral manager token contract.
What is Amp?
Amp is a digital collateral and asset token to “enable immediate settlement of payment transactions” in a simple three-stage process. Firstly, when users stake AMP tokens, this means any type of value transaction exchange can be guaranteed. This includes everything from loan distributions, property sales, digital payments, and the exchange of fiat currency. Then, once the tokens are staked, Amp decentralizes the risk of transfer with the use of collateral pools. This makes Amp incredibly secure, ideal for real-world use cases in need of fraud-proof networks. Finally, Amp rewards the network validators upon completion of the transfer of assets. A variety of rewards and incentive models are programmed into Amp’s smart contracts. This maintains the smooth operation of the project facilitating honesty, transparency, and security. Some of these incentives include automatic continuous compounding and micro-distributions.
Amp Token
The Amp asset token (AMP) is an ERC-20 compatible collateral token designed to facilitate the immediate settlement of payment transactions by implementing conditional rights using smart contracts in conjunction with a partition scheme. Created using the world’s largest smart contract-enabled blockchain, Ethereum, Amp boasts universal interoperability with other transaction protocols.
According to the Amp whitepaper, Amp resembles “a rudimentary token in that balances are assigned to Ethereum addresses, but the tokens also belong to a particular 32-byte partition which effectively serves as a second-dimension in the distribution array of the balances.” This means that the total supply of AMP tokens is equal to the aggregate amount of tokens across all wallet addresses and partitions.
Though Amp boasts greater functionality than Flexacoin, the tokenomic model is identical. This means that AMP token retains the same fixed fully diluted supply of around 100 billion tokens, plus the same distribution curve as Flexacoin. At the time of writing, Amp is priced at around $0.05 per token, with a market cap of $2.7 billion and a circulating supply of approximately 48 billion tokens according to CoinGecko.
How Does Amp Work?
The Amp collateral model uses a “collateral partition” concept. Collateral partitions work by representing particular subsets of AMP tokens used for specific purposes. These are distinguished on the Ethereum blockchain by the use of unique partition addresses. All collateral partitions can have unique sets of rules that allow for special functions and capabilities. This facilitates collateral models whereby token staking can occur without tokens leaving an address.
Amp uses smart contracts as on-chain collateral managers that manage the transfer of AMP tokens for collateralization applications to “lock, release, and reward collateral”. Collateral managers work in conjunction with collateral partitions for transfer value activities and permissions.
This allows tokens to be transferred on behalf of a caller from a particular partition. When balances are tracked off-chain, two events occur. Firstly, the Transfer event contains address information and token amounts. Secondly, the TransferByPartition event contains the same data as the Transfer event, along with any partition data and metadata.
Amp can support any number of collateral managers. Plus, anyone can create and deploy collateral manager contracts to integrate Amp with existing applications. The original collateral manager built on Amp is the Flexa collateral manager. The Flexa collateral manager manages AMP tokens staked via the Flexa network to secure payments. The Flexa collateral manager incentivizes AMP token staking using collateral partitions as pools whereby a percentage of successful transfers is rewarded to contributors.
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Why Use Amp?
Amp allows for “instant, verifiable assurances for any pending or future value transfer”. This means that actions that depend on a transfer can go ahead without any delay. Also, when Amp is used as collateral, users benefit from the security, transparency, and efficiency of an immutable ledger.
Amp is an open-source collateral-as-a-service token that decentralizes risk using purpose-built smart contract features. All Amp asset token collateralization undergoes testing and auditing by ConsenSys Diligence and Trail of Bits and can be used by anyone to build applications and streamline lending and borrowing services.
Also, as more projects adopt AMP token, existing projects stand to benefit from higher levels of liquidity and decentralization. Resultantly, this can reduce volatility and improve the quality of collateral because the token has a fixed supply and is non-inflationary.
Additionally, Amp is asset agnostic. This means that no specific consensus mechanism or asset type is required for Amp to be used as collateral to secure physical and digital transactions. When Amp is used as collateral, the value of transfers is insured, even as it is unconfirmed. Moreover, Amp users can create bespoke collateral managers that allow existing applications to interface with Amp using customizable parameters.
Furthermore, because Amp has a fixed supply, the risk of price volatility is reduced. This has attracted the attention of a range of companies in many different sectors. Thanks to smart contract-based collateral management interfaces and partition strategies, the Amp asset token facilitates fast, efficient, and secure value transfer. This provides many new opportunities for payments, lending, borrowing, remittances, and more! Plus, because Amp is open-source, it can easily be integrated into third-party platforms and applications.
Amp Token Crypto Exchanges
Following the launch of the Amp digital collateral asset token and staking platform in September 2020, AMP tokens were initially available through major crypto exchange, Gemini. The New York-based exchange founded by Cameron and Tyler Winklevoss is a long-standing partner with Flexa network, supporting Amp’s release.
As one of the most versatile ERC-20 tokens in existence, Amp is available to purchase through many popular crypto exchanges. Investors have a wide choice of exchanges to choose from including leading centralized and decentralized exchanges.
One of the most popular decentralized exchanges (DEXs) to find AMP tokens is Uniswap. Also, Bancor Network, Balancer, and 1inch Exchange support AMP token listings. Furthermore, since April 2021, the popular Uniswap clone, Sushiswap, also facilitates AMP token trading. In addition to these DEXs, Ethereum’s layer-2 Loopring AMM (automated market maker) also supports AMP tokens. Plus, as a layer-2 solution, users can save on Ethereum gas fee costs.
You can invest in AMP tokens with the simplicity of centralized exchanges (CEXs) too! This includes Gemini, Crypto.com, and as of June 2021, the largest crypto exchange in terms of users, Coinbase.
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AMP Token Summary
Amp is a “cutting-edge and extensible” ERC-20-compliant token suited to a wide range of digital collateral types, including digital payments, fiat currency exchange, loans, and property sales. Also, when payments get stuck, fail, or take too long, AMP tokens used as collateral can be liquidated to cover any costs. Resultantly, vendors still receive their payments quickly. Plus, buyers and sellers benefit from the irreversibility and immutability of transactions.
Amp has solid fundamentals with a unique approach to an in-demand service. Also, Amp boasts an impressive array of partnerships including Poloniex, Bittrex, and the number one oracle project, Chainlink. You can keep up-to-date with Amp news announcements and protocol updates through the Amp Community Digest.
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