AMP cryptocurrency token, As an Investment, Has Some Drawbacks.

The Amp cryptocurrency launched in September 2020, and its tokens have appreciated more than 430%. These tokens are unique because they feature programmable agreements ( smart contracts) that lock and release Amp as collateral for transactions made with other cryptocurrencies, such as Ethereum (ETH -2.67%).

Cryptocurrency transactions can take minutes, hours, or days to settle during peak network activity. And no vendor wants to wait that long for certainty that the customer's payment has gone through.

A Promising Crypto

Amp was created by Flexa, which operates a payment solutions app. The wallet developers partnered with Flexa to bring out the payment solution. Consequently, Amp is now the cryptocurrency collateral of choice on the Flexa app.

More than 41,000 retail locations across the U.S. and Canada use Flexa to facilitate digital payments. On the user end, anyone with a recognized digital wallet such as MetaMask or TrustWallet can use it to spend their digital currencies.

But it's Not Without Risks.

First, the problem that Amp solves isn't necessarily a big one. To spend money on a blockchain peer-to-peer network is a digital wallet and the recipient's wallet address. It can take days for transactions to settle when a network is overloaded, but all of them eventually go through. If they didn't, there would be no way cryptocurrencies would trade at anything near their current market caps.

Amp gives vendors the peace that they don't have to wait for a cryptocurrency transaction to finalize before moving on to their next customer. Amp token is a work in progress. And it could expand its utility to collateralize trades on decentralized exchanges.

How AMP & Flexa Work Together.

In a single sentence: by insuring against loss, the Flexa network allows a merchant to accept an instant crypto transaction without forcing the customer to wait a long time. The simplest way to think about Flexa and AMP is as insurance for transactions.

The merchant pays a fee to accept cryptocurrency payments via the Flexa network. The Flexa fee is usually about 1%, compared to the 3% or higher fee merchants must pay to credit card companies.

If a customer pulls off a double spend or there is some other problem with the crypto payment, the Flexa network reimburses the merchant.

That's great for the merchant, but what does that have to do with the AMP token?

AMP stakers receive a passive income while taking the risk that a small portion of their tokens could be sold to reimburse a merchant. The merchant can accept instant (zero confirmation) payments since they are insured against loss. With this model, AMP and Flexa work together to create a decentralized solution to crypto payments.

The more merchants that accept crypto payments via Flexa, the higher the staking yield. What's brilliant about this model is that the staking yield comes from real-world use and does not depend on constant token inflation. Currently, Flexa is propping up the staking yield by distributing tokens from the treasury. However, that will end once enough merchants use the protocol to support a generous staking yield.

Why AMP Could Succeed

There are three key reasons that AMP and the Flexa network could succeed in bringing instant crypto payments to the world:

1) Regulatory Approval

Unlike Ripple XRP, which is currently facing a massive lawsuit from the SEC, the Flexa payments company has gained regulatory approval. Flexa is registered in Delaware as a corporation (a prevalent practice), but its headquarters are in New York. Regarding financial regulations, N.Y. is the strictest state in the union. By working in New York, Flexa has deliberately set itself up to conform to an authoritarian regulatory regime.

2) Staking Drives Flexa Adoption

The more AMP gets staked, the more payments Flexa can process. Since AMP's staking yield is sustainably generated, users don't have to worry that the value of their tokens will be diluted over time.

3) Merchants Want to Use AMP

High credit card transaction fees cut into a merchant's bottom line in a big way. Most credit card companies charge a 3% fee for transactions, although the fee can be even higher in some cases. Wal-Mart, for example, pays about $5 billion a year in credit card processing fees.

Switching to Flexa, and accepting crypto instead of a credit card, can save a merchant 66% or more on their payment processing fees! That's a lot of money saved, meaning the Flexa network doesn't have to force its solution on anyone. There is organic demand. Furthermore, merchants can easily integrate Flexa into their POS (Point of Sale) terminals. In most cases, they

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Created on Jul 29th 2022 02:01. Viewed 106 times.

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