Collateral managers and token partitions.Ĭollateral managers resemble escrow accounts in traditional banking, but they can be customized according to rules and specifications and can be used as collateral to support applications. Not all financial transactions need collateral, but the cryptocurrency market is full of stories related to scams and money laundering issues that should lead to a global regulation at some point.Īmp has not one but two innovations to transform digital transfers. With a market capitalization of approximately $1.18 billion, Amp seems to have an excessive premium for the collateral service it offers.įast and efficient transfers in the real world are highly sought but I have my doubts whether Amp can act as universal collateral for anyone. In essence, the biggest advantage of Amp gets eliminated. That is a massive amount.Īmp claims it wants to “ take money into the 21 st century” by providing “instant, verifiable assurance for any real-world application.” Is this not a great utility? Taking it one step further you can decentralize risk by using smart contract features for collateral.Īssuming there is no top urgency for making a digital transfer, there is no need for collateral or speeding up the process. Sending a Bitcoin as payment would require having more than 1.5 million Amp tokens. Take for example the price of Bitcoin ( BTC-USD) that as of March 2, is near $44,000. I would say it is possible but for rather small amounts. What about the actual figure of the transaction though? Is it also possible to cover the total cost of the transaction including the additional fees? Should the transactions take too long to process AMP tokens, it can be liquidated to cover the costs so that the receiving party receives the payment. Here is when the collateral use gets tricky. How is this transaction speed up achieved? Amp users can put their Amp tokens as collateral for transactions on cryptocurrency networks. “ AMP, the native cryptocurrency of the Amp blockchain, is a collateralized token designed to speed up transactions in cryptocurrency networks, including the two largest in the world - Bitcoin and Ethereum.” Utility and scalability are key drivers that can gain the attention and interest of both retail and institutional investors. In 2022 and beyond one of the most critical questions to ask about any coin or token to decide to invest in it or not is the technology of the blockchain protocol if it is a coin and whether there is a potential for massive utility and scalability.
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