First, we would like to say we are sorry if we confused anyone with the N3 Migration announcement regarding the new pools. We now understand that we should have made it clear that the percentage on the image was the minting distribution and not the APY.
We would like to explain why there are some changes to the distribution and why it is essential.
First, we must understand how Flamingo actually creates utility for its users. The people who add liquidity can be called Suppliers, and the people who convert tokens can be called Consumers.
For Flamingo to succeed, we need to take care of the Consumers and the Suppliers. Something easy to forget from the perspective of a Maker. Without the Consumers, liquidity is not required. That is why we changed the minting distribution to move the liquidity to better fit how the Consumers has behaved on Neo Legacy. We understand that some Suppliers might get upset that their favorite pool gets a smaller distribution, but that does not necessarily mean that APY will be reduced. That just means that that pool will have less liquidity. And as a Maker, you must offer a product the Consumers wants and needs.
Why is it essential to have more liquidity in some pools than others?
Let’s look at where liquidity is needed according to where the transaction volume between tokens is. We will see that some pairs (like XYZ-USDT and NEO-GAS) do not provide much utility because they are over “liquified.” There will, of course, be days that are unusual where we have price spikes, and it will be impossible to predict where the transaction volume will go, but this will again result in higher fee earnings for the Makers in that pool.
We set the minting distribution on Flamingo to provide a better service for those who want to convert, so they don’t need to pay fees for converting multiple steps from/to FLM. This results in a smoother user experience as they convert between their FLM’s and different tokens. That way, we reward converting to/from FLM and not punishing it with double or triple fees. Flamingo should always put FLM token holders first and make the platform reward them, not punish them by having the token with the most diminutive utility/possibilities.
We need to adapt Flamingo to fit the market, and the minting distribution must be subject to change to adapt to the new demands. Remember, FLM will be used for much more than just staking in the coming months!
Why such a high distribution for FLM-bNEO?
This pool will give the most utility for the Flamingo platform as it will help utilization for the FLM token and at the same time help generate a lot of GAS that will be used to grow, secure, and develop the platform. No other pools have this unique utility on Flamingo. When Flamingo grows, FLM will be utilized in every significant feature and product on Flamingo.
Flamingo has three types of pools:
1. High utility pools (FLM-bNEO)
2. Medium utility pools (All other FLM or bNEO pools)
3. Low utility pools (fWBTC-fUSDT)
FLM-bNEO is the only pool that gives us high utility in the form of utilization for FLM and GAS from bNEO to fuel the platform.