Neo (NEO), the "Chinese Ethereum," is going to introduce a major update to its first-ever decentralized financial protocol, Flamingo (FLM). Neo inventor Da Hongfei is certain that this upgrade will be revolutionary for the entire landscape of the DeFi segment.
New assets for "yield farming" and cross-chain swaps
According to an official blog post by Mr. Da, Flamingo mechanisms are set to undergo the crucial upgrade. Two new assets will be introduced to allow Flamingo (FLM) traders to "yield farm" for liquidity provision and to try cross-chain interoperability instruments.
The first asset, yToken, introduces the concept of the "leveraged yield." In a nutshell, Flamincome (the "yield farming" instrument on Flamingo) will work like Yearn.Finance (YFI), but with leveraged income. As such, Mr. Da claims that its customers will enjoy higher APY rates than with Flamingo's competitors.
Periodic rewards for liquidity provision will be distributed between yToken holders. New mechanisms will be powered by liquidation-risk-free leverage while the accurate leverage rate will be determined automatically.
xToken will act as a cross-chain interoperability contract. It will be minted by the system in a decentralized manner. Flamincome clients will not interact with it directly, but it will be a medium of atomic cross-chain interaction.
Flamingo DeFi enables derivatives trading
The new asset pair will replace the initial concept of Collateralized Debt Positions (CDP) based on nToken and pnToken. xToken-powered channels may become a standard for interaction between Ethereum (ETH) and other blockchains.
Also, the Flamingo (FLM) team launches a vAMM, the unique mechanism for perpetual contracts "on every asset." Its design offers customers a risk-free option in the segment of crypto derivatives trading.
As covered by U.Today previously, Flamingo launched in Q3, 2020, to bring the achievements of the DeFi segment beyond the Ethereum (ETH) sandbox.
On this announcement, FLM token, a native asset of Flamingo, added 29 percent in a few hours. Now it is changing hands at $0.21 on major spot trading platforms.