What’s FLX Token And Why Flux Protocol Needs It?
Recently, we had a peek at Flux protocol. In this article we will have a look at Flux Protocol token, FLX, and we will consider how this token is going to be used by the project.
Recap, that Flux Protocol is going to be a layer between blockchain and real-world providing data to smart contracts. One of the major propositions of the project is its security with novel proof-of-stake consensus.
To secure and power the protocol, Flux project is planning to utilize data validators who will be required to stake network native assets (remember, Flux is a multi-chain protocol, so those assets will need to be the ones used by a particular chain). Malicious validators, providing incorrect data will be penalized. While good validators who provide realistic data outcomes will be rewarded for their behavior in in a form of FLX token. Moreso, Flux Protocol participants who do not want to become a validator, can use FLX tokens to stake with another validators to earn a share of the rewards.
Furthermore, projects making data requests to the Oracle, will need to pay a fee for the data. Such fees will also be paid in FLX token.
Last, Flux Protocol is planning to implement a Flux DAO. FLX hoders will be able to participate in DAO votes to help govern the direction and development of the project.
In summary, FLX token will be used to help secure the network and provide financial incentive for the participants. Data validators along with stakers will be rewarded with tokens while data requesters will pay FLX for the data. And all token holders will be able to participate in the governance of the project. As a result, such uses of the FLX token provide a strong financial backing for the token utility on the FLUX protocol.