Blockchain technology has brought immense revolutions since its birth in 2009. The ability of blockchains to host DApps and smart contract solutions was awe-inspiring. Already, there has been tremendous growth in smart contracts supporting blockchains.
However, one problem is that some platforms have high gas costs and lower scalability. Gas fees or gas costs are the operating expenses for using a blockchain. The Flow Blockchain launched in late 2019 to provide better options for DApp developers, especially games and NFTs.
What is Flow?
Flow defines itself as a fast, developer-friendly, and decentralized blockchain network created to host the upcoming apps, games, and digital assets. This layer one blockchain is a product of a team of experts in crypto development, having worked on projects like Dapper Wallet and Cryptokitties.
Flow Playground was developed due to the frustrations seen in the Ethereum chain. At least in this project, games, and NFTs will have a bigger field to expand and support growth.
Flow network launched with a native token FLOW, which helps power the network’s different activities. This token has a vast collection of use cases discussed deeply in this guide.
Flow Use Case: Governance
Another one of the primary use cases of Flow token is in protocol governance. The inception of Defi gave birth to governance systems involving community involvement. The community backing the projects has the right to vote to decide on the project’s future.
Flow Protocol has a governance system that involves FLOW token. Flow token holders can vote on various decisions within the platform. Hence, Flow token is a crucial asset helping investors vote for the protocol governance.
The DAO voting system began in 2020, requiring FLOW-infused tokens to allow investors to vote. Stablecoins and other service protocols deployed on Flow Network will need a DAO vote first.
According to the network, three decisions will use the governance system. They include;
- Ecosystem decisions: These are general issues dealing with the daily functioning of this entire ecosystem. They involve selecting council members and grants and prize offerings.
- Protocol upgrades: These are issues connected to upgrading this whole network, also referred to as hard forks.
- Protocol parameter: The protocol parameters include the number of seats set for the node types and other protocol aspects.
Hence, one of the main use cases of FLOW token is as a governance token. Your voting power depends on the number of tokens you hold.
Flow Use Case: Payment of Fees and Expenditures
Another one of the primary use cases of Flow token within the network is the payment of fees. As mentioned earlier, this network will be used by a wide array of Dapps, including Defi, NFT, and DAO. So how do these Dapps use Flow?
According to their network, the only thing needed to spend Flow Token is an account and a wallet. Using Flow network, you can log in to any Dapp with your account, enjoy the services provided and use Flow tokens as payment options. If you want to make a purchase in the DApps within Flow ecosystem, you can use Flow token.
The first fee paid according to the network is during accounts registration. The amount charged is 0.000001 FLOW. Of course, there are other fees for completing transactions, most of them leveraging FLOW.
Flow Use Case: Decentralized Applications
Flow token has also gained a famous use case within a wide array of DApps. The popular decentralized applications in the platform include Crypto Kitties, Dapper Labs, and NBA Top Shot.
Dapper Labs Inc. is a company created for fun and games within the blockchain. According to the network, they intend to provide a decentralized experience like no other. Dapper Labs allows people to use FLOW token securely.
The NBA Top Shot Dapp was created to allow fans ownership rights to NBA highlights. Investors can access packs of NBSA highlights in the form of nonfungible tokens. The NBA top shots use Flow to pay gas fees within the project’s ecosystem.
Other Flow Token projects for gas fee payments include Crypto Kitties, Cheese Wizards, and UFC digital collectibles. In fact, after creating Crypto Kitties, the developers were frustrated by just how slow Ethereum was. It did not support massive instant transactions when Cryptokitties began expanding. Hence, the developers chose to create Flow. Flow token is the fuel powering the entire network and a gas fee token.
Flow Use Case: Network Contributors
Aside from it gaining other use cases, this token is also used within the network and specifically by contributors. There are two types of contributors in Flow Network: developers and validators.
Developers are people building different applications by using Flow Network. Developers create applications hosting NFT and even games on Flow blockchain. As mentioned earlier, there are already several DApps running on the network when writing.
Validators are the set of people who participate in activities for powering the ecosystem. They collateralize Flow tokens and participate in transaction validation. Collateralization basically means holding the funds in a validation node. A validation node is a machine checking transaction information to ensure it’s true and sending it to the next node. Hence, validators hold some Flow tokens and participate in checking if the transaction is genuine.
Both developers and validators must leverage Flow token to help participate in the network. Developers will pay for their DApp fuels using Flow token, while validators stake and earn Flow as rewards.
Flow Moving Forward
Flow Token has a wide collection of use cases, including fee payment, governance, Dapps, and network participation. Due to its many use cases, expert analysts have a lot of hope for this project.
Since the project is still in its early life, investors should expect more growth in a few years. NFT projects and gaming Dapps could choose this chain as a solution to provide a full user experience in gaming.
It’s true to say that Flow Blockchain will be facing a lot of competition from industry leaders like Cardano, Ethereum, and Solana. However, if it mainly focuses on gaming networks, it may enjoy a brighter future.