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What is Flexacoin: A Decentralized Payment Service Provider

2021-07-16 06:07:21

Launched in December 2018, Flexa provides a set of payment-based integrations and plug-ins that supports instant cryptocurrency payments to retailers. Flexacoin (FXC) was the native token used for collateral to temporarily lock in transactions while waiting for finalization on the blockchain. In September 2020, Flexa replaced FXC with Amp (AMP). Currently, AMP trades at $0.059 per token with a circulating supply of 42 billion, for a market cap of $2.5 billion.


What Problem Does Flexa Solve?

Traditional electronic payment networks such as Visa, Mastercard, and American Express are commonly used worldwide to conduct digital transactions. However, these centralized payment service providers are flawed by many issues.

Firstly, card fraud and fraudulent chargebacks are common problems faced by consumers and small businesses. Global card fraud losses reached almost $29 billion in 2019. A Nilson report expects that card fraud may even increase due to the increasing number of online transactions being made throughout the COVID-19 pandemic. Secondly, cross-border payments are difficult and expensive. Payments take two to five business days to clear, and payment providers may also charge fees such as wire fees and currency conversion fees.

Flexa is a decentralized finance (DeFi) application built on Ethereum (ETH) that offers a solution to the challenges faced by traditional electronic payment networks. Through its Flex Network Protocol (FNP) and Flexa Capacity, the network provides users with a fraud-proof way to complete digital transactions worldwide almost instantly without foreign exchange conversion fees.

FNP is the open-source protocol that Flexa Network uses to finalize cryptocurrency payments almost instantly. Any interested developer or merchant can integrate Flexa within their own apps or physical stores.

The payment process is simple where every Flexa transaction involves two main components:

  • Flexible primary account number (FPAN): A one-time authorization for merchants to receive their preferred fiat currency by deducting an equivalent value of cryptocurrency from a consumer’s wallet.
  • Flexcode: Flexa’s proprietary and backwards-compatible barcode format, which conveys the FPAN and is scannable by standard point of sale barcode readers.

Using the Flexa-enabled app, users can send payments in any supported cryptocurrencies via Flexcode to any merchant that supports the network’s functionality. The merchant then receives the payment in fiat currency and an equivalent value of cryptocurrency is debited from the user’s wallet. Users do not need to pay any fees and only merchants will pay fees to process payments over Flexa’s network.

Simplified process of how payments are completed through Flexa

Simplified process of how payments are completed through Flexa (Source: Flexa)

To support near-instant transactions, Flexa Network relies on its native ERC-20 token FXC. Anyone with FXC can stake their tokens so that the network can use them as collateral. The number of FXC staked is equal to Flexa’s payment volume. To incentivize users to stake their FXC tokens, Flexa Network pays stakers a small percentage of each transaction.

Suppose a user wishes to pay a merchant a specified amount of Bitcoin (BTC) during a transaction. Flexa will lock a number of FXC with a value equivalent to BTC debited from the user’s wallet. The network uses the FXC as a form of assurance that the network will release fiat to the merchant to finalize the transaction. If the transaction fails, Flexa will liquidate the FXC to cover the fiat payment.

In July 2020, Flexa announced that FXC would be migrating to a new token. Thus, Flexa stopped using FXC in September 2020 and replaced it with AMP, their new and upgraded collateral token.

How Is AMP Different from FXC?

AMP is an upgraded ERC-20 token designed and developed by Flexa in collaboration with ConsenSys, a company that specializes in blockchain software. The upgraded token implements new Ethereum technologies such as partition strategies and collateral managers to achieve advanced digital asset collateralization.

  • Partition strategies are special functionalities within collateral partitions, which are AMP’s subsets with unique addresses that offer collateral for specific purposes. For example, the strategy enables users to stake AMP tokens without transferring the tokens out of their original address.
  • Collateral managers are smart contracts thatallow the network to lock, release, and reward collateral. The managers work with collateral partitions to manage smart contract implementations and accept, reject, or redirect token transfers.

The network advised users with FXC to convert their tokens to AMP tokens through the decentralized application (DApp), Flexa Capacity. Users migrate their FXC tokens to AMP in a 1:1 ratio where the DApp burns one FXC to mint one AMP. Since October 2020, the network stopped using FXC tokens as collateral and the users staking the defunct tokens cannot earn any more network rewards.

Who Is Behind Flexa?

Tyler Spalding, Trevor Filter, Zachary Kilgore, and Daniel McCabe co-founded Flexa in 2018. The New York-based company has a team of members with years of experience in technology, retail, and payments. The company also boasts advisors from tech giants such as Amazon, Google, Apple, and Samsung.

Flexa’s CEO, Tyler Spalding, is the former Chief Technology Officer at Raise, a digital prepaid and retail payments platform that offers gift cards for users to save money and earn rewards. He authored more than 50 technology patents and was an engineer in the United Space Alliance, US Air Force, and NASA’s Space Shuttle Program.

Prior to Flexa, Trevor Filter was Spalding’s colleague at Raise and was the Head of Product & Design. Filter also previously worked at Slide Network as the Head of Product before it was acquired by Raise and was a user experience (UX) designer for American Express. He now serves as the Chief Design Officer at Flexa.

Flexa’s VP of Engineering, Zachary Kilgore, also from Raise, served as the gift card platform’s Engineering Manager. He has more than eight years of experience in front-end and back-end development for the payments and mobile industry.

Daniel McCabe is the co-founder and Chief Compliance Officer of Flexa. McCabe is a former partner for law firms such as Greensfelder, McCabeMiller, and Kubasiak. He is also the former Executive Vice President and General Counsel for investment institution Vanquish Capital Management.

The Flexa project has attracted a few institutional investors. Flexa raised around $14 million in funding in 2019 from investment institutions such as Pantera Capital, 1kx, Nima Capital, and Access Ventures. Flexa plans to use the funds for network infrastructure development and retail adoption. In September 2020, Flexa raised $6 million through a private sale of its AMP token from investors such as Robot Ventures II, Barry Sternlicht, Volkert Doeksen, and Douwe Lycklama.

AMP Price History

Prior to 2021, AMP’s price was relatively stable and traded at around $0.007. Due to the bullish run starting in February 2021, AMP’s price increased by more than 900%, from $0.007 to $0.073. Like most cryptocurrencies, AMP’s price soon plummeted to $0.03 in mid-May following negative headlines. A month later, AMP’s price received a generous 250% boost from $0.03 to its peak of $0.11, after being listed on a major cryptocurrency platform. As interest waned, AMP’s price dropped to its current $0.059 value.

AMP price

AMP price from December 7, 2020 to June 29, 2021. (Source: TradingView)

AMP is currently ranked #37 by market cap. AMP’s supply and economics are identical to FXC, with a maximum supply of 100 billion. Currently, there are 42 billion tokens in circulation. Flexa expects that the total supply will be in circulation by 2045 and forecasts that the liquidation of the remaining tokens will follow the liquid supply curve below.

Flexa’s liquid supply curve

Flexa’s liquid supply curve. (Source: Flexa)

What Is the Outlook for Flexa?

Flexa is unique in the sense that it is a payment service provider similar to Visa and Mastercard. The project sets itself apart from its centralized counterparts by offering a low-cost and secure way to complete transactions.

  • Low Cost: Flexa imposes a fee of less than 1% for each transaction (Visa and Mastercard’s fees cost up to 5%) and does not charge currency conversion fees for cross-border transactions (Visa and Mastercard charge 1%)
  • Secure: The payments over Flexa’s network are fraud-proof. Unlike traditional payment networks, users and merchants using Flexa do not have to worry about card fraud or fraudulent chargebacks. In the event of thefts or attacks, the network will liquidate the collateral to guarantee payment.

Flexa’s closest decentralized competitor is Bitpay, a Bitcoin Core, Bitcoin Cash, and digital USD payment service provider. Compared to Bitpay, Flexa brings to the table a payment service that does not require additional equipment and does not charge users for transactions.

Nevertheless, Flexa is up against established and successful payment networks, both centralized and decentralized. For the project to gain traction, Flexa would need massive adoption and strong partnerships. For this purpose, the team has made it easy for merchants to install integrations and plug-ins to start accepting Flexa payments. At the moment, more than 41 thousand stores across the US and Canada support Flexa. Retailers involved in the project include Barnes & Noble, GameStop, Petco, and Whole Foods Market.

One issue is that less than 50% of the AMP token supply is currently in circulation. The liquidation of AMP across the years may create a strong selling pressure and reduce demand, thereby lowering the price of the AMP tokens.

The network boasts an established payment mechanism, but it still relies on only two apps for payments. On Flexa’s website, most of the apps are “coming soon.” However, some of the apps have been in development since 2020.


Flexa is a unique payment service provider that relies on asset collateralization to achieve near-instant transactions. On Flexa, users can pay merchants with any supported cryptocurrency, while merchants can receive their fiat of choice. Flexa differs from its centralized competitors like Visa and Mastercard by offering merchants a low-cost and fraud-proof payment processing service. Moreover, its easy-to-integrate plug-ins and integrations give Flexa a good chance to attract future partnerships and retailers. However, app development is slow and future liquidation might lower the value of its AMP tokens.

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