Hi everyone,

I've been around this subreddit since there were about ten or twenty people and it has been extraordinarily exciting to watch it grow. I have seen many recent posts of people posting price targets, holding amounts, partnership and exchange speculations, people pleading to buy the dip, people pleading not to pump and dump, people equating this to DOGE or GME and everything in between. There's nothing wrong with those kinds of posts. I welcome people's thoughts and ideas with open arms, and will listen to anyone with anything to say, although that does not mean I agree with everyone. With that said I want to explain why I have become fascinated with the Flexa Network and its Amp token collateral. This project has a serious chance to create a paradigm shift in how people spend money, value digital assets, and sell goods and services. It quite literally can create a new way of life for people existing in global economies attached to the internet. Here are my thoughts. Get ready for a deep dive with an academic flow.

To start it is important to understand how payments networks are currently structured. Many understand this quite a lot more than me, but here's a basic rundown. The current payments industry is set up with a vast amount of middle-men in between the customer's payment to the merchant's wallet. These middle-men include financial institutions and banks which charge high fees (generally can reach over 3% of a transaction). The bureaucracy of the process leaves merchants at high risk of fraud. The merchants themselves eat these costs while the banks and financial institutions profit. This process is highly centralized and thus disadvantages merchants, and in the end it disadvantages customers because merchants must ultimately choose: raise costs for customers to cover merchant fees or provide lower quality goods and services and eat the payment costs. Example listed below:

https://preview.redd.it/egptatltyhh61.jpg?width=359&format=pjpg&auto=webp&s=b1e9ab81d4053f519d220ca4a38fbcae0b4d2269

The payments and fraud costs for some merchants range in the Billions annually. For example, in 2013 Walmart paid over $3 billion in interchange fees (0.64% of revenue). The interchange rate represents a cost for just one of those single steps above (between the issuing bank and acquiring bank). Most or all of those other steps above also cost fees. With so many steps costing merchants money, and so many steps leaving them open to fraud, merchants spend a considerable amount of revenue on simply allowing their customers to spend their money. Americans alone spend $10.7 trillion) dollars a year. With that figure in mind, it is costing merchants in the US hundreds of billions of dollars a year to simply sell their goods and services to people ($10.7 trillion x 3% = $321 billion).

How can merchants cut these costs? In comes Flexa Network and Amp token, which helps merchants cut these costs by orders of magnitude. While I have had a hard time finding Flexa's exact calculations on how much lower payment costs are on its network, from my time in the community I believe Flexa/Amp can lower payment costs down to around 0.5%. This can equate to hundreds of billions of dollars in savings to merchants. How does Flexa/Amp accomplish this? Look at the chart below.

https://preview.redd.it/ku19fgewyhh61.jpg?width=978&format=pjpg&auto=webp&s=a95093c3e673da9cf10f0be5d24b9d3399c9a6dc

Flexa provides a streamlined payment method that cuts out the middle-men, thus reducing costs and preventing fraud. Now you may ask, what does Amp token have to do with this?

Amp token acts as an entirely novel concept: decentralized collateral. Anyone (individuals, businesses, merchants, hedge funds, Flexa Network, other payment processors, digital asset exchanges, stock exchanges, etc.) can purchase the Amp token and stake it thus collateralizing payments. Now onto what that actually means.

When you stake Amp to capacity you are participating in the process that lowers fees and reduces fraud to merchants. The staked Amp tokens act as a vital piece to the entire process. When a customer spends through Flexa Network, the transaction is verified instantly and protects the merchant from fraud. The staked Amp tokens act as collateral. For example: The customer spends $50 of BTC (or even a stable coin like GUSD) > the stakers put in $50 of Amp tokens to the support the transaction, for now (automatically through the audited smart contract) > the transaction clears > Flexa pays the merchant $50 (minus the small transaction fee) and the $50 of the Amp token collateral returns to the stakers, plus the small transaction fee the merchant pays to the stakers - which is still a much smaller fee than the current centralized payment systems. The merchant saves money, and the Amp token stakers receive a fee for their service.

Now what happens if the transaction does not clear? For example: The customer spends $50 of BTC (or even a stable coin like GUSD) > the stakers put in $50 of Amp tokens to the support the transaction > the transaction does not clear (e.g., the transaction bounces or is fraudulent) > Flexa pays the merchant $50 and liquidates the Amp token collateral. The Amp token stakers lose their $50 this time.

So the merchant wins in both situations, but in one situation the Amp token stakers take the risk. Why would they do this? Trevor Filter (Flexa co-founder) has said on these risks, " At scale, we expect the market for app staking to become very efficient. Flexa's obligation here is to surface as much information about how apps are connected to Flexa, and related metrics, as feasible. In an efficient market, the ratio of defaulted/failed transactions to successful transactions will be very low. (Sidenote: this also means that the network itself can become exceedingly effective at reducing fraud. Think of it like a decentralized market for payment risk, with perfect incentives to ferret out fraud before it happens.)" So the idea is that fraud is reduced to the point where the fees for Amp token staker's services should far outweigh the Amp token liquidations.

Either way, the system is set up for massive merchant adoption. Now what are some other great features of this system?

Instant verifications help unlock and fully realize the value of digital assets. For example, BTC transactions can take several minutes, or even up to an hour to confirm enough blocks to completely verify the transaction. This is a major problem for merchants to accept BTC directly, because people simply cannot wait around in the store for 30 minutes while their transaction is confirmed over three blocks. Flexa and Amp stakers help solve this problem. BTC (and several other digital assets) can be fully realized as liquid money, and through Flexa/Amp the merchant has an incentive to allow people to spend these digital assets at their stores. As Trevor puts it, "One of the coolest features of Flexa for merchants is the ability to receive payment in whatever currency they like. Most of our merchants today have chosen to get paid in USD. Importantly, merchants can accept digital assets through Flexa without ever knowing what Amp is."

Customers can spend several types of digital assets, including stablecoins, on several (eventual) apps. Currently you can spend on the SPEDN app or the Gemini Pay app, with more to come. You spend by simply scanning a QR code on your phone with the payment system. The systems integrated into Flexa include major systems like NCR, Clover, and Shopify. Flexa plans to integrate more systems through APIs and SDKs, making it easy for nearly any merchant to adopt the system.

The eventual goal (briefly hinted, and also in my mind) is to live in a world where I can spend my Dollars, my BTC, my ETH, my USDC, my GUSD, or even a CBDC (central bank digital currency) at any merchant, anywhere in the world. I can use my phone as my wallet, travel anywhere humans can reach (my own country, another country, outer-space) and spend my assets. If I want to travel to another country I can do that without having to worry about converting currency/assets because it's all converted seamlessly at a low-cost through the Flexa network.

Many then ask, "how does Flexa benefit from this?" Trevor has recently spoken to this lately too, "Flexa doesn't intend to become valuable in and of itself. In the current network design, all of the value (100%) of the Flexa network accrues in the Amp that's staked to Flexa Capacity. The Amp whitepaper speaks to this a little bit, as well... In other words, Flexa doesn't need to be profitable to be successful. There's no plan to IPO or sell the company to any other entity; instead, someday we'd like to be able to transfer governance of the Flexa network over to the merchants themselves."

Finally, I'd like to speak to Flexa's dedication to remaining compliant in the jurisdictions where it operates. Compliance and satisfying regulations (both domestically and internationally) is a massive undertaking for both payments and digital assets companies. Flexa is both. While I won't bog everyone down in the compliance details, this is one of the main things I look for now in how cryptocurrency companies operate. While there are a lot of philosophies out there on whether regulators are friends or foes, I tend to be on the side of things where I'd like to see these brilliant inventors create products that governments simply cannot ignore, with benefits that make it impossible to snuff out. The eventual goal will hopefully be to restore more semblance of power and wealth to the common people, thus allowing those common people to take further control of regulatory systems. Easily summarized, I'd like to see us regulate ourselves in a fair and equitable way. The path forward here is to act transparently and with honesty.

So in full conclusion, I'll sum up why I think Flexa/Amp will create such a paradigm shift in how we live. Staking the Amp token itself allows me personally to participate directly in this paradigm (as can you). I am the one servicing the merchants with my own Amp tokens (as are you). The merchants pay me (and other stakers) for helping people (myself included) spend their money, and ensure those merchants are not victims of fraud. At the end of it all, this means so much more to me than simple financial speculation, like so many cryptocurrencies I come across. This is part of the foundation for building a new way of life powered by tenets of decentralization in a self-sustaining global economy.