Flexacoin (FXC)

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Flexacoin
TypeETH Token
Total supply100,000,000,000 FXC
Websitehttps://flexa.network

Basics

"Flexacoin is a digital collateral token for facilitating instant cryptocurrency payments, originally developed to collateralize retail payments on the Flexa network. Flexacoin is designed to mitigate the friction between customers paying with crypto and merchants accepting fiat. Users scan a QR code at the point of sale, and the Flexa Network Protocol (FNP) trades the crypto spent for fiat which is then returned to the merchant. Flexa returns a percentage of every processed transaction to users. Flexa’s FNP uses the ERC 20-compliant token called Flexacoin for transactions and a variety of members-only network incentives.

The name “Flexa” is an abbreviation of flexibility, according to the team. Flexa requires no additional hardware at the point of sale and optimizes for seamless payment and receipt for the consumer and merchant."

History

"Because of the nature of the interfaces required to implement the new capabilities of Amp, it wouldn’t have been possible to simply upgrade the Flexacoin token using its existing smart contract or at its existing contract address. Therefore, Amp was necessarily developed as a new, separate token, which is now available to be migrated from Flexacoin at a rate of 1:1.

Although the functionality of Amp as collateral vastly exceeds that of its predecessor, the supply and economics of Amp remain identical to that of Flexacoin. Amp will retain Flexacoin’s fixed and fully diluted supply of 100 billion tokens, as well as the same long-term token distribution and supply curve that have previously been outlined.

As of today, Flexa has begun using Amp as the primary collateral for securing all transactions on its pure-digital payments network. Starting now and continuing for the next three weeks, Flexa Capacity will use a combination of Flexacoin and Amp to collateralize payments on the Flexa network, and Flexa will continue to distribute network rewards based on any wallet’s combined FXC and AMP balance.

On Wednesday, September 30, 2020, Flexa Capacity will stop supporting Flexacoin as collateral, and Flexa will destroy its ownership of the Flexacoin token contract. At that time, network rewards in Flexa Capacity will begin to be distributed on the basis of AMP balances alone. Any Flexacoin remaining in Flexa Capacity after September 30 will still be available to migrate to Amp; however, at that time, Flexacoin will stop being used by the Flexa network as collateral for payments, and Flexacoin balances will no longer earn any network rewards."

Token

Launch

  • According to Messari the token sale was from 1-3-2019 until 1-10-2019 and has collected $14.100.000. However, on the website of Flexa itself, they write: "The Flexacoin token sale ended in December 2018. All tokens have now been distributed."

"Rather than hosting a traditional ICO, the team conducted a private sale for $14.1 million in funding, led by Pantera Capital, 1kx, Nima Capital, Access Ventures, and other strategic partners."

Token allocation

25% Merchant Development Fund

25% Developer Grants

20% Founding Team Pool

20% Token Sales

10% Network Development Fund

  • The team tokens are vested over five years, starting after year 1, with monthly cliffs thereafter.

Utility

"Flexacoin (FXC) is used to stake wallets on the Flexa network. Stakers help to collateralize payments made by those wallets, and in return, they earn stake rewards based on transaction volume."

  • From an AMA (21-4-2019):

"The FXC token is used as collateral to secure the Flexa Protocol. As projects adopt the Flexa protocol they will need to guarantee their access by *staking* FXC. These FXC are used to ensure that as transactions occur the project settles in a timely manner in the appropriate amounts."

Token Details

"Flexacoin ($FXC) is Flexa’s native token used as collateral to support seamless cryptocurrency transactions via the SPEDN application. For each transaction that occurs on the network, FXC is used as a proxy to front fiat currencies to a merchant. When the transaction is processed, Flexa receives the cryptocurrency that was spent and issues fiat to the merchant thanks to its partnership with Gemini.
For individual token holders, FXC can be staked within SPEDN, granting the owner rewards based on overall transaction volume.* At the time of writing, Flexa currently supports payments in Bitcoin ($BTC), Ethereum ($ETH), Bitcoin Cash ($BCH), Litecoin ($LTC) and Gemini Dollars ($GUSD). *Please note that staking is currently not available and is expected to be rolled out towards the end of 2019."

Stablecoin

Tech

  • Whitepaper can be read here. (15-8-2018) "The whitepaper is currently being re-written. Expect a new one to be released in the near future." (21-4-2019)  As of 18-6-2020 the (technical) whitepaper is still ‘coming soon’ according to their CEO.
  • Code can be viewed here (14-6-2020).
  • Built on: Ethereum, ERC20
  • Programming language used:

Transaction Details

How it works

"Flexa leverages a unique form of closed-loop payments to provide a seamless transaction process. Using traditional QR codes, Flexa verifies a user’s cryptocurrency balance against a public index rate and generates a proprietary flexcode for payment."

"For payments, Flexa allows users to send crypto and the Flexa Network Protocol (FNP) exchanges it for fiat via FXC to return fiat to the merchant. Every Flexa transaction has two parts:

1. A Flexible Primary Account Number (FPAN) is a one-time authorization for merchants to debit a local fiat currency against the customer’s crypto wallet balance.

2. A Flexcode is a proprietary and backwards-compatible barcode format for communicating the FPAN through the merchant’s point-of-sale system.

Flexa’s beta launched with support for Bitcoin, Litecoin, Bitcoin Cash, and Ethereum."

  • From their blog (19-11-2019):

"Before a point-of-sale transaction takes place, the Capacity smart contract locks the commensurate amount of FXC against the fiat value of the purchase. Then, the wallet making the purchase sends the equivalent amount of digital currency to an exchange address. Finally, once the digital currency transaction is sufficiently confirmed on chain, the lock on the FXC collateral is released, enabling it to support any future network activity."

"The Flexa Protocol acts as a bridge between crypto and Point of Sale (POS) terminals around the world. When a project enables the Flexa protocol, and the user utilizes the project app/dapp/webapp to make a purchase Flexa conducts a simultaneous sell of crypto (on an exchange) and deposit of dollars into the merchants account.

Today, it’s not feasible to scale this type of “lock and release” activity on a digital ledger. Instead, Flexa uses off-chain mechanisms to secure FXC collateral for each purchase and publishes the resulting output as a root index to the Ethereum blockchain, on a recurring schedule. In order to secure FXC collateral against wallet activity, Flexa requires each wallet app to have some FXC collateral allocated—and that’s where Flexa Capacity comes in."

  • A deeper explanation can be read in their own blog post here (20-5-2020).

Staking

"Anyone can stake Flexacoin and support an app on the open Flexa network. In return for using their collateral to secure Flexa payments, stakers are paid a small percentage of each transaction that’s processed through the app they choose to collateralize. What’s more, stakers will soon be able to select projects from a transparent network index representing how much stake is allocated across the network at any given point in time (look out for details of this process in a forthcoming update).

In this way, Flexa really represents the first-ever participatory payments network — wherein the total value of Flexacoin staked is exactly equivalent to the total amount of payment volume that can flow through the system, unconfirmed, at any given point in time."

"Please note that staking is currently not available and is expected to be rolled out towards the end of 2019."

  • In a video by the CEO he explains it is not really staking but more something like 'part-time holds'. People stake tokens into a smart contract but after that the network can spend these tokens. It is more a collateralization, a bit like SNX.
  • From their blog (21-8-2019):

"Once a staker collateralizes a particular Flexa-enabled app, they will earn network rewards corresponding to the payment volume enabled by the collateral they’ve contributed. For example, if a staker is the only contributor to the collateral for a particular app, they’ll receive 100% of the network rewards processed for that app. Alternatively, if a staker’s contribution only accounts for half of an app’s collateral at all times, they’ll receive 50% of the app’s network rewards for the duration of their stake."

  • As of 16-12-2019 more than 15% of circulating FXC was staked:

"Starting today, you may withdraw any Flexacoin you have previously supplied, simply by de-allocating capacity and proceeding through the withdrawal process. At this time, however, Flexa Capacity does not support the withdrawal of earned network reward balances. While we work to establish a universal and globally consistent compliance framework for reward withdrawals, any FXC you deploy to Flexa Capacity will continue to earn network rewards commensurate with your allocation, and your rewards will continue to accumulate in the Flexa Capacity smart contract."

"The FXC to pay the staking rewards will be purchased from the market using the low fees charged to the merchant. These fees are much lower than the merchants currently pay to VISA/MC etc. All fees charged are returned to the stakers. No percentage is kept by Flexa, all fees are used to purchase FXC on the market and return that FXC to stakers pro-rata, depending on the percentage of the total each staker has staked."

  • From their Discord (27-6-2020):

“The rewards at the moment are coming from the Network Development Fund to kickstart the network as described here.”

Interoperability

  • From their whitepaper (5-2019):

“Flexa is designed to be backwards-compatible with existing POS systems, and as interoperable with as many platforms and partnerships as possible.”

Other Details

Privacy Method being used

  • From their website (26-6-2020):

"Payments on Flexa are both GDPR– and CCPA–ready. Our privacy-first approach to payments ensures that your business stays compliant with evolving data privacy regulations around the world while giving your customers confidence to spend freely.

To facilitate enhanced transactions—such as age-restricted purchases, loyalty punches, and offers—Flexa also enables customers to share specific personal data on either an individual or recurring basis, and audit their data sharing at any time. This granular level of control is novel to the Flexa network, and opens up a new world of possibilities for dynamic loyalty and marketing."

  • From their blog (19-11-2019):

"Transaction privacy is inherent to Flexa’s design: since consumer wallets send payments directly to network exchange addresses, merchants receive settlement off-chain, and collateralization is calculated with zero-knowledge contracts, we ensure that it’s not actually possible to monitor spending inputs or outputs based on collateralization activity alone."

Oracle Method being used

Their Other Projects

SPEDN

"Flexa establishes an open standard for seamless cryptocurrency payments in retail stores and online marketplaces. Unlike competing services, Flexa allows merchants to accept a host of cryptocurrencies all while preserving security and data privacy. Vendors are paid in their local fiat currency and best of all, the network doesn’t require merchants to pay transaction fees, use physical cards or upgrade their point-of-sale systems.

SPEDN

In order to connect consumers to merchants in an intuitive fashion, Flexa developed their first application, SPEDN, to do just that. Since it’s launch at Consensus in May, 5,000 users have registered to the SPEDN public beta on iOS with Android support being rolled out last month. As of writing, Flexa currently supports payments at 30,000+ retail stores including Barnes & Noble, Nordstrom, Crate & Barrel, Office Depot, Lowe’s, Dunkin Donuts and Whole Foods."

DEX

Governance

  • The Spend app is live right now in the US and Canada, and will try to expand to other jurisdictions. Europe and Mexico are up next. Due to the banking and compliance restrictions, Flexa will have to be permissioned in some way or form.  

"Flexa is not a blockchain and will never be a blockchain. We process everything the old-fashioned way through all of our merchant integrations in back end software."

  • From their blog (19-11-2019):

"The FXC that collateralizes Flexa transactions for Flexa Capacity resides in a smart contract on the Ethereum network, which includes fallback withdrawal mechanisms in the case of the contract’s unavailability over an extended period of time. Although the payments infrastructure that enables Flexa transactions for merchants requires some degree of centralization, we believe that the wallet app interface for Flexa payments needs to be as open and accessible as possible. While we’re presently launching Flexa Capacity through a proprietary dApp interface, all of the underlying smart contracts are fully extensible. Soon, we’ll enable support for interfacing directly with the smart contracts themselves — through addresses specific to each wallet being collateralized — and we hope that this will enable the development of even more tools and services that interact with live Flexacoin collateral more seamlessly and autonomously."

DAO

  • There are no current plans for community governance to be found on any of Flexacoin's websites (27-6-2020).

Upgrades

Roadmap

  • There is no clear roadmap to be found as of 27-6-2020. However bits and pieces have been hinted towards.
  • Flexa wants to be a bridge (11-5-2020) between all possible currencies; different crypto currencies, different fiat currencies and things like Air Miles. 
  • The live SDK is only for custodial apps. They claim to release a non-custodial Spend SDK before the end of the year (18-6-2020). 

Audits

  • Has had 2 audits and another one is on its way (18-6-2020). The first audit was done by their own advisor and was minor but showed Flexa's smart contract and its funds are in the end under control of the smart contract's owner. The second audit was more thorough, possibly so because the project itself became more mature. It showed 7 findings, of which two were highly severe (one was related to double spending). Flexa remediated five issues, mitigated one issue off-chain, and accepted the risk of one (informational) issue.
  • Has first been audited by their own advisor David Hoover (9-5-2018):

"The Flexa contracts are extremely well tested, with both unit tests and an integration test (simulation). Notably, there is no on-chain token sale involved in these contracts. The deployer of FlexaCoin will initially possess all 100,000,000 FXC ERC-20-compatible tokens. There is vault functionality that will allow the deployer of FlexaCoin to allocate tokens to whoever they want, with possible vesting periods. Most of the complexity in these smart contracts comes from the upgradeable functionality, which was based on TokenMarketNet’s implementation. All Flexa contracts leverage the widely-used foundational contracts in OpenZeppelin.

The Flexa contracts have no interaction with untrusted contracts, assuming that the owner of the FlexaCoin contract can be trusted. Therefore, there should be no risk of bad actors attacking FlexaCoin. But this does introduce a point of trust in the system. The FlexaCoin owner does have the power to provide any UpgradeAgent that they choose. This risk is mitigated by the fact that FXC token holders have control over whether they upgrade or not. They can choose to leave their tokens in the original FlexaCoin contract, or choose to migrate their tokens to the upgraded token contract.

As mentioned in the summary, setUpgradeAgent is the biggest source of risk in this system as it requires that token holders trust the contract owner to establish a safe token upgrade contract. Extra precautions should be taken to secure the private key of the contract owner’s account. It may also make sense to consider using Multiownable to mitigate the risk of theft or loss of a single owner’s private key.

Developers note: The contract owner will be Flexa's multi-signature wallet, mitigating the risk of key theft or loss."

Bugs

  • So far 11-5-2020, Flexa has not had any, publicly known, bugs, frauds or hacks. 

Usage

Projects that use or built on it

Pros and Cons

Pros

  • What Flexa brings is quick settlement, less fees for merchants compared to Visa, and fiat (or the currency of choice) straight to merchants.
  • Flexa focusses on being easy to integrate.

Cons

  • Weak use case. It is essentially just a payment processor, for which many successful centralized companies already exist, including free decentralized alternatives. 
  • Admin keys of the smart contract are highly centralized and have an unclear (26-6-2020) OpSec, appart from a multi signature wallet.
  • Centralized token distribution. With 20% of tokens sold in a private sale, the coin distribution is highly centralized.  
  • Not keeping to the promised schedule and neither giving updates on it later on. One example is talking about rewards being able to be withdrawn from the contract, quite an important thing. More than half a year later it is still not possible, and the team answered when questioned “Still planned.”

"Flexacoin’s primary use is as collateral to secure network transactions. Unlike many other currencies, FXC is not intended to be used as the primary payment mechanism and can be compared to the role that MKR plays as a form of last-resort collateral in the MakerDAO ecosystem.

As such, price volatility does not have an adverse (or beneficial) effect on partnered merchants. With this in mind, FXC’s current use-case may have security implications as individuals purchasing the token on secondary exchanges are likely to do so in order to earn rewards and future profits by staking in the SPEDN app."

Risks

While Flexa has certainly established a very robust payment mechanism, their current system places heavy reliance on Gemini to issue spot-rate conversations and ensure that transactions are processed and liquidated properly.
With no mandatory KYC requirements necessary to use the SPEDN application, there remains an ongoing risk that FXC may be deemed a security by the United State’s SEC at some point in the future.

Flexacoin is currently only listed on a number of obscure exchanges with only 16% of the total supply circulating on secondary markets. As such, retail investors should note that around 10B FXC will be added to the circulating supply come January 4th of 2020. While the majority of unlocked tokens (5.5B) will be held by core team members, there remains a risk that circulating supply being increased by ~63% will likely create strong sell pressure and reduced demand impact.

We would also like the note that the current 24h volume for FXC is dangerously low - trading less than $10,000 per day. Again this is largely due to FXC not being traded on major exchanges. We expect this would drastically change upon the network launch and FXC is being used on a daily basis as collateral for payments at thousands of retailers across the United States and the rest of the world."

Competition

  • In their Reddit AMA someone asked: "What makes Flexacoin different than current PoS options like Bitpay?" They answered:

"Flexa functions with most major retailers in the US (without additional equipment) and settles instantly. Bitpay builds a fee into the spread (charging you) and charges the retailer, Flexa gives you the market rate and charges the retailer. Those are the major differences."

Coin Distribution

  • At the moment (14-6-2020) 50% of all the tokens are still held in one address. 

Team, Funding, Partnerships, etc.

Team

  • Full team can be found here (5-2019).
  • Tyler Spalding; CEO and co-founder. Holds to master degrees from MIT.
  • Has a team of 8 people and 15 advisors (9-2019) from all kinds of big companies (Walmart, American Express, Nike, etc.)
  • From Token Tuesdays (13-8-2019):

"Prior to founding Flexa, Tyler has had extensive experience as a serial entrepreneur and CTO for two other startups (Raise and Tastebud Technologies) combined with lead engineering roles for the United Space Alliance, US Air Force, and NASA’s Space Shuttle Program. 

Other notable positions include Trevor Filter’s time as a Senior Product Manager at American Express, Zack Kilgore’s role as a front-end engineer for Warby Parker and Ryan Records involvement with the rollout of Starbuck’s mobile application.
All in all, out of the 8 team members currently listed, 6 of them have extensive development experience with the other two members playing crucial roles surrounding the onboarding of new merchants."

Funding

  • Had a $14.1M private sale and plans to keep the company funded until 2045 through their own FXC reserves.

Partners 

  • According to their Reddit AMA (4-2019): "Flexa has no announced partnerships. Expect to hear more at Consensus 2019!"
  • But according to this blog post they work with Gemini: "For each transaction that occurs on the network, FXC is used as a proxy to front fiat currencies to a merchant. When the transaction is processed, Flexa receives the cryptocurrency that was spent and issues fiat to the merchant thanks to its partnership with Gemini."
  • Nexus Mutual provides (16-12-2019) possible covers for Flexa's staking network.
  • Works together (17-1-2020) with Gemini and NCR, the words largest POS hardware company.
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