Amp Tokens – Collateralized Payments in Crypto

The Flexa network, through the use of AMP tokens, is looking to make cryptocurrency payments instant and secure at a large network of retailers.

The ability to use crypto for basic payments may be a missing piece of the puzzle in taking crypto from a cult-like curiosity into the financial mainstream.

The ability to exchange the currency you hold easily and securely in return for the products and services—which is the true purpose of a currency/cryptocurrency—seems to have been forgotten as many trades chase speculative profits over functionality.

AMP provides functionality, but unfortunately, the token’s price performance has been very weak through to mid-2023.

Let’s dig into what Amp tokens are, so you can decide if it is a good investment based on its functionality, price performance, and staking options.

What is Flexa? What is Amp?

Flexa is a network that is built on the Ethereum blockchain. It makes use of Ethereum’s smart contract functionality to allow users of its proprietary app, called SPEDN, to make instant payments at retailers using cryptocurrencies. When a payment is made, the crypto on the app is automatically converted into whatever currency the retailer accepts.

The Flexa network makes use of its native crypto token called Amp to make the whole system work. In order to add a layer of trust and security, Amp tokens from a general pool are locked up as collateral when a payment gets initiated.

The collateralized tokens provide backing for crypto transactions which can, at times, take a longer amount of time to confirm than what most people would deem convenient, especially if there are high levels of activity on the network.

There are other instances where traditional crypto transactions might actually fail after seeking confirmation, so the collateralized tokens give peace of mind and an instant resolution to both the spender and the retailer.

According to Flexa, there are over 41 thousand locations throughout the United States and Canada that already accept payments using the SPEDN app, with more development and expansion in the works. Their app allows you to make payments using dozens of popular cryptocurrencies and tokens, and also US and Canadian dollars.

It all sounds promising. Should I invest in Amp tokens?

Like other crypto tokens that rely on their utility in supporting a network, the current and potential value can depend a lot on the level of activity on the network, and if that activity is growing over time.

When considering where a functional cryptocurrency might fit into the system as a whole, you also have to consider that point-of-sale purchase transactions are overwhelmingly dominated by the traditional banking system and colossal credit card companies.

So the area that Flexa is attempting to break into is a crowded and well-protected market, with all its major players exerting a large amount of influence over the industry and policy decisions surrounding it.

These financial institutions also have enormous marketing budgets and partnerships with other large corporations that allow them to offer their own rewards to consumers for using the more traditional payment methods they provide.

Changing the minds of consumers who have been collecting points, travel miles, and receiving discounts on some purchases with their traditional credit card may be difficult, particularly if they have been long-time beneficiaries of those rewards.

Amp tokens can also be used for collateralizing transactions in decentralized finance and apps, but currently, this is a much smaller market than point-of-sale purchase transactions, which after browsing their website, seems to me to be the primary focus of Flexa.

How Has Amp Coin Performed?

Since late 2021, Amp coin has mostly fallen versus the USD or stablecoins, like Tether. In total, it has lost 96% of its value as of August 2023. While there have been occasional rallies, ultimately the price has ended up heading lower.

This may change in the future if there is greater demand for the coins. But as it stands, there has been little demand for the coin which has resulted in the continually decreasing price.

How to Stake Amp Coin

Holders of the Amp token can stake their tokens to the pool used for collateralization, and earn rewards for doing so. At the time of writing this, the pool had about 50 million dollars worth of tokens, so the network has a large capacity available for backing transactions at any given time.

Staking can be done directly from any cold wallet in which you choose to hold your Amp tokens. Keep in mind that the rewards you receive are directly related to the number of tokens staked, and the number of transactions that occur on that particular wallet app.

Higher traffic and a higher number of tokens staked will lead to a higher Annual Percentage Yield (APY).

Amp tokens can be unstaked and removed from the pool at any time, but may be subject to some delays if the Ethereum network has a high level of activity, or if your tokens have been locked for the purpose of backing a transaction on the Flexa network.

Final Thoughts on Flexa and Amp

AMP appears unique and functional in that it helps settle transactions using the Ethereum-based Flex network, which makes it useful for buying products or services at retailers. While 41 thousand retailers accept the app that uses Amp, so far there is little demand for the coin as it has continually fallen in price through 2022 and 2023.

The coin can be staked to earn rewards, but unless the coin itself holds steady or rises in value, earning interest on a depreciating asset isn’t ideal. Watch for demand to increase, and for the coin and crypto in general to make headway into everyday transactions.

These coins are facing stiff competition, but if they can do it, prices will increase along with demand.