Cryptocurrency Flow (FLOW) from the creators of CryptoKitties
The first blockchains with smart contracts, such as Ethereum, introduced the world to the innovative concept of allowing users and developers to issue their tokens and decentralized applications (DApps). However, as the number of users grew, it turned out that these blockchains were not high bandwidth and could not be scaled.
Due to the high popularity of the CryptoKitties game, the Ethereum blockchain was even suspended in 2017 as the network could not handle the load. The problems of Ethereum and similar blockchains prompted developers to create more modern networks, one of which was Flow.
What is Flow?
Flow is a new generation blockchain based on a Proof-of-Stake consensus mechanism oriented to various Web3 services: DeFi, NFT, Metaverse, DAO, PFP-projects and others. The Dapper Labs team developed the platform from scratch based on its proprietary Cadence programming language, which was created specifically for decentralized projects and digital assets.
The Flow blockchain was developed by the team behind the creation of the very popular CryptoKitties game that brought the Ethereum blockchain to a halt. Faced with the problem, the team realized that in its current state, Ethereum and similar networks could not provide proper trading platforms for NFT and decentralized video games, so they decided to create their blockchain for this purpose.
In October 2020, the Flow project raised $19.5 million in a public ICO on the CoinList exchange. The project's partners included the NBA, UFC, Ubisoft, Samsung, OpenSea, Circle, and others.
In May 2022, the Flow team launched a $725 million blockchain development fund backed by major investment firms such as A16z, Digital Currency Group, Coatue and. The fund plans to provide financial support to more than 7,500 developers worldwide in gamification and DeFi.
How does Flow work?
Older generation blockchains use only one type of node, "full nodes", to process transactions fully. Each node stores all blockchain state data (transactions, wallet balances, fees, and more). Such an architecture can be compared to an enterprise where a single engineer does all the work, from design to the final product.
There are two ways to solve this problem: horizontal scaling, like sharding — a technique for segmenting the network into parallel chains currently used in the Ethereum blockchain — and vertical scaling, which separates transaction validation into different stages. The Flow blockchain precisely allows for scaling and increased throughput without sharding.
Instead, the creators of Flow decided to use a pipelined approach, where each node does its own part of the work, improving the entire system's performance. There are 4 types of nodes in the Flow blockchain, each performing work at a different stage:
- Collector nodes, which improve the efficiency of the network by distributing data: validators receive only the hash, thus reducing transaction processing time, while the other nodes receive all the information;
- Execution nodes receive data from collector nodes and form blocks,
- Verifier nodes that allow consensus nodes to include the block in the network;
- Consensus nodes that determine the order of transactions in the block.
Flow ecosystem
The Flow ecosystem includes hundreds of decentralized applications (DApps) and companies, including well-known ones such as Google Cloud, Binance, Coinbase, CoinList, Kraken, Band Protocol, Filecoin, Shopify and many others.
One of the main DeFi protocols of the ecosystem is Flow's first decentralized blockchain exchange, BloctoSwap, where users can exchange native FLOW blockchain tokens and other assets. Also included in the Flow ecosystem is one of the leading cross-chain solutions for transferring and exchanging digital assets between networks, Celer Network.
Another key application is the NBA Top Shot marketplace, where users can buy collectable cards licensed by the NBA.
FLOW token
FLOW is a native token of the Flow platform used to pay for network fees, steaking or delegation rewards and liquidity supply in decentralized protocols. Token holders can also participate in voting for suggestions put forward to improve the platform.
Currently, more than 1.47 billion FLOW tokens have already been issued. FLOW tokens have no-issuance limit. In other words, FLOW is an inflationary token. According to CoinMarkeCap, FLOW ranks 54th in capitalization, over $900 million.
The FLOW token price peaked in March 2021 at $39.1, after which it began to decline like all other known cryptocurrencies, as a bearish trend set in, lasting until early 2023. Since the beginning of the year, the FLOW rate has increased, and the token is now trading at $0.63.
Project future and prospects
The Flow team regularly updates the roadmap and proposes new initiatives to improve the ecosystem. In the near future, it is planned to launch a cross-chain bridge between Ethereum and Flow blockchain, improve tools to simplify the development of decentralized applications based on Flow, increase network throughput through parallel execution of transactions, and add additional ways to protect the network and other updates.
In November 2023, it became known that the world-famous Disney company will launch an NFT platform with Dapper Labs.
