Cryptocurrencies are revolutionizing the way we think about money, especially in the digital age. Many cryptocurrencies are powered by new technologies like blockchains and smart contracts, giving a picture of what decentralized financing can be like. However, given that the middleman is either digitized or decentralized through validator nodes and mechanisms, transactions can either be slower to validate or have the potential to get lost. To have a faster transaction, networks charge large fees. But these transaction fees do not always guarantee that the transaction goes through. AMP seeks to address the transaction fee charges and risk of security problems.
The AMP Token
In addition, AMP is an open-source protocol built on ETH. It works as a universal collateral token designed to facilitate fast and efficient transfers for any real-world application. According to its website, the AMP token’s exclusive purpose is to “serve as collateral for any asset transfer” that may be physical or digital. Tokens are used as collateral to power faster and more secure transfers. When transfers do not push through, the AMP token is burned so that the receiver still gets money at the end.
The AMP was initially used to power the Flexa network, the network developed by AMP’s parent company. As such, it is also a governance token of the Flexa network. It replaced the Flexacoin, the native token of the Flexa network, at a rate of 1:1 in 2020. Unlike Flexacoin, AMP can be used even outside of the Flexa network.
The AMP token has two main components: the collateral managers and the token partitions. Collateral managers are the collateral used in applications whenever efficient value transfers or escrow services may be beneficial. The managers make sure that the transaction is completed quickly and securely. Token partitions are the partitions within the token contract that allow different collateral managers to enforce rules on separate, distinct spaces that have the same digital address. These partitions allow for the execution of different commands within the token, including the staking of the token without transferring it to a smart contract.
The AMP is designed to be a non-inflationary, fixed supply of tokens. It has a supply cap of 100 billion tokens. The AMP is also gaining popularity because Flexa has many partnerships that have adopted the AMP.