Opinion: Neo poised to challenge Ethereum in the DeFi sector

Launched in September, the DeFi protocol Flamingo.Finance on the Neo blockchain is not a copycat, as is often associated with all that is created in China. In an interview with CoinDesk, co-founder Da Hongfei said.

In doing so, he responded to the comments by the Compound platform’s co-founder, Robert Leshner, who described Flamingo as an attempt to clone and launch all of Ethereum’s popular DeFi projects at once.

“This is yield farming, and an automated market-maker algorithm, and Uniswap, and MakerDAO in one bottle,” Leshner explained.

Why pay attention to @Neo_Blockchain at all?

With the help of @binance and @OKEx, NEO is attempting to clone & launch all of Ethereum’s popular apps at once.

It’s Farming + Uniswap + Perp AMM + MakerDAO under one umbrella, @FlamingoFinancehttps://t.co/mUEc53tzrE

— 🤖 Leshner (@rleshner) September 27, 2020

He added that Flamingo.Finance is the first credible, mass-scale attempt to clone a DeFi protocol. According to him, the project’s success or failure has extremely important ramifications for Ethereum’s network effect.

IMO it’s the first credible, wholesale blockchain-scale «vampire» attempt.

The success or failure of the project has extremely important ramifications for how we think of Ethereum’s network effect & composability lock-in.

Will it work?

— 🤖 Leshner (@rleshner) September 27, 2020

According to Da Hongfei, over time Flamingo.Finance developers will offer users options available in protocols such as Uniswap, Curve Finance, yearn.finance and Synthetix. In doing so, the project intends to seriously compete with Ethereum in the DeFi sector.

What has drawn attention is the fact that, despite disruptions in the distribution of FLM governance tokens due to extremely high concurrent traffic, in its first days of existence it attracted $1.6 billion in locked assets. This accounted for 80% of the TVL of the popular decentralised exchange Uniswap.

The total value locked participating in Flamincome/Flamingo has surpassed 1.6 billion USD. $FLM pic.twitter.com/JrMgU8LxEQ

— Flamingo Finance (@FlamingoFinance) September 28, 2020

As of writing, this figure fell to $247 million.

Among Neo’s touted advantages, once described as the “Ethereum killer,” are roughly zero fees. In the network of the second-largest cryptocurrency by market capitalization, the average transaction fee in September rose to $15 and only recently fell below $2.

Da Hongfei also rejects the view that Neo is oriented primarily toward Chinese users. He says that in the project’s Discord chats 90% of users use English, signalling its international status.

“We do not attract people, we attract crypto assets… We do not care where the private key originates—from China or from America,” Da Hongfei said.

Whether Neo can compete with Ethereum will only be known with time. Observers, however, are not rushing to conclusions, noting among other things the unclear degree of influence by Beijing authorities on the crypto space in the country.

Back in August, Neo and Ethereum became among the first blockchains that the Chinese state infrastructure blockchain platform (BSN) integrated.

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