Amp is a universal collateral token designed to facilitate fast and efficient transfers for any real-world application. When using Amp as collateral, transfers of value are guaranteed and can settle instantly. While the underlying asset reaches final settlement, a transaction that can take anywhere from seconds to days, Amp is locked by a decentralized collateral manager. Once the transaction successfully settles, the Amp collateral is released and is available to collateralize another transfer. Amp exists to serve as universal collateral for anyone and any project.
Currently, the primary use-case for Amp is to secure transactions on the Flexa network. Flexa uses Amp to enable instant, fraud-free payments to merchants across its digital payment network. Users stake Amp to apps, ensuring Flexa payments can be settled in real-time regardless of the asset or protocol used. Acceptance fees generated within the network are then automatically distributed pro-rata to stakers. This means that the collateral providers and users of the platform earn the entirety of value generated within the network.
Token economics
On Flexa, since every asset spent requires at least an equivalent dollar amount of Amp tokens securing the transaction, each wallet or app can only spend as much as the total dollar value of the Amp collateral pool staked to it. For example, if Wallet A had a collateral pool with $100,000 worth of Amp deposits, cumulative users of Wallet A would be able to spend up to $100,000 worth of assets at any given time.
At first glance, this may seem like a limitation of the system but as the amount spent approaches the pooled collateral value, the proportion of rewards generated to the Amp staked would significantly increase. (Rewards are generated directly from the fees paid by merchants to accept Flexa payments.) Additionally, each new app that integrates with Flexa, such as your favorite wallet app or loyalty point app, requires its own distinct pool of collateral.
The higher proportion of rewards for one wallet may attract stakers from other lower transaction generating apps. So, a natural equilibrium will evolve as existing stakers move to more undercollateralized apps. Additional market participants may also stake Amp to balance collateral pools as they seek to earn rewards generated by increased spending.
Staking process
To stake Amp tokens, anyone can go to the Flexa Capacity dApp and select which app to stake their Amp towards (step-by-step guide). As new wallets are added to Flexa Capacity, stakers are always able to un-stake from existing pools and re-allocate Amp as desired. Note: Always confirm the Amp token contract and Capacity contract address from official sources.
As a reminder, if the Ethereum network is congested (high gas fees) it may not be economical to re-allocate staked Amp. This calculator created by the Amp community can be used to estimate the net cost of adjusting your stake. Currently, there is also active work to enable Flexa Capacity on Ethereum scaling networks and alternative layer 1 protocols. Please visit the discussion forum to provide community feedback and also find ways to contribute.
