The Flamingo Finance DeFi token, launched on the NEO blockchain, is an attempt to undermine Ethereum’s hegemony.
Over-centralization can be an obstacle for NEO.
FLM has dropped 40 +% since listing on Binance.
The NEO blockchain launched the new Flamingo Finance DeFi protocol in an attempt to compete with the Ethereum DeFi boom.
The hype around the decentralized finance (DeFi) segment, now unfolding in the Ethereum ecosystem, haunts other blockchains. Now and then Ethereum’s competitors try to infringe on its hegemony in this area.
Flamingos have arrived
Another attempt to take over some of the liquidity was the launch on September 23 of the Flamingo Finance DeFi protocol, which was developed on the basis of the NEO blockchain, also known as “China Ethereum”.
Unlike the original, the “Chinese version” of Ethereum has not been able to reach a wide scale, despite all the efforts of the developers. Accordingly, now no one was surprised by the project’s attempt to adopt such a fashionable phenomenon as DeFi.
It is planned to issue 150 million Flamingo Finance (FLM) NEP-5 tokens, which will be distributed among liquidity providers. Popular cryptocurrency exchange Binance added a new token to the Binance Launchpool sandbox listing on September 27.
According to Flamingo Finance on Twitter, the total amount of funds locked in FLM tokens has now reached $ 1.6 billion, which is equivalent to the value of deposits in four Uniswap ETH pools.
Flamingo vampire mining attack on Ethereum is doomed to failure
The crypto community reacted rather ambiguously to the emergence of Flamingo. For example, Cinneamhain Ventures partner and expert in the DeFi industry, Adam Cochran, called the launch of the new token a “vampire attack” on Ethereum. The emergence of the “vampire mining” trend has been noticed in the DeFi industry lately when projects achieve the goals sucking liquidity from competitors.
Cochran posted a lengthy post on Twitter listing a number of points that should not be overlooked.
So, he mentioned the technical problems inherent in the NEO network, and cited as an example its recent outage of more than 45 minutes. “My transactions were frozen for 5 hours,” he said. “Why am I willing to pay higher fees on ETH? Because it works … ”- added the expert.
Cochran also noted the high level of centralization of Flamingo due to the involvement of two such heavyweights of the crypto industry as Binance and OKEx in the project. According to Cochran, 50% of all new token emissions go to NEO, BNB and OKB holders.
In conclusion, he suggested that even if the FLM token succeeds in taking over some of the liquidity, it will still flow back soon, since there is little point in storing your ETH assets on an alternative blockchain, where it is difficult to find application for it. Overall, Cochran called the launch of FLM “the most sophisticated attack on ETH”, doomed to complete failure.
Indeed, finding the best profitability could be an obstacle for NEO. Recent situations with SushiSwap and Uniswap have clearly demonstrated that investor money is actively and constantly circulating within the DeFi ecosystem.