Flash Protocol Explained

Zainab Hasan
December 4, 2020

 |4 min read

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Flash Protocol

Flash protocol enables users to stake tokens and earn rewards immediately. Staking is not new, however, in different protocols, the staking process is different or users earn incentives in a different manner. Such as sBTC staking, where users have to provide ETH/sBTC both, or AMPL on which you can stake your LP tokens and earn AMPL tokens as a reward.

Flash is permissionless protocol allowing anyone to stake $FLASH tokens and earn upfront reward instantly.

How Flash Protocol Works?

Flash protocol uses its own tokens, known as, $FLASH. These mintable and burnable tokens don’t have a fixed supply. The process of minting can only be done via the FlashProtocol contract or FlashClaim contract.

The flash protocol’s main contract has two basic functions, which are,

  1. Stake
  2. Unstake

Both functions have the following parameters:

  • amount: This is the $FLASH amount that the user may stake.  
  • duration: The time duration for which the user staked tokens. Flash protocol enables users to stake in different time units, from minutes to years.  
  • toAddress: This parameter may hold the address of an externally owned accounts or a contract. This address will receive rewards. 
  • data: Contracts can utilize the rewards to build dapps on top of the flash protocol. The encoded data code goes in this parameter.

Stake:

In the flash protocol, the user stakes $FLASH and receives newly minted $FLASH as rewards. The Mathematics to calculate $FLASH to be received include:

The percentage of annual reward that the user will receive is FPY. 

What the user receives is an instant reward which is the minted $FLASH. This amount of $FLASH to mint is calculated using 

Unstake:

In unstake user is essentially withdrawing the tokens which they once staked. Users may choose to unstake using either the normal unstake method or early unstake methods. Let’s have a look at both of these.

Normal Unstake Method:

In the normal unstake method, the user withdraws $FLASH after the staking duration expires. However, the unstake amount is transferred to the account of the user who staked, whether the unstake themselves or someone else does it for them.

Early Unstake Method:

In the early unstake method, the user withdraws $FLASH before the staking duration reaches its end. As a result, the user doesn’t get back all their $FLASH, a portion of it is burned. This portion is calculated with:

Flash protocol contract also provides a way to maintain reserves. When the stake method is called, flash protocol contract mints $FLASH, referred to as matchRatio. These go directly to the XIO foundation reserves. Currently, this amount is 0%, but this may change in the future. However, this will not exceed 20%.

What More Will Flash Protocol Offer In Future?

Flashstake For Wallet:

Using flash protocol you can stake an externally owned wallet. This opens doors for flashstaking for yourself and earning the reward. 

You can also imagine another use case, where you are rewarding community members for their contribution. You can stake for them and they’ll earn the reward.

Build DApps On Top Of It:

Flash protocol allows you to build dApps on top of it. The receiver contract just needs to implement the IFlashReceiver interface. This allows it to receive the reward and utilize it according to the contract logic.
Staker data is stored in the FlashProtocol contract.

Flashstake To The Future:

FlashStake app is built on top of the flash protocol. The app allows users to stake for a pool and earn rewards instantly. Users can also swap ALTs for $FLASH. The application will hit mainnet on January 1st, 2021.

To learn more, refer to XIO Network.

Xord is a Blockchain development company providing Blockchain solutions to your business processes. Connect with us for your projects and free Blockchain consultation at https://xord.com/contact

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