Flow is a blockchain network designed to support NFT collectibles and decentralized games. Dapper Labs, the creator of Flow, realized in 2017 that the current generation of blockchains can’t handle the swiftly increasing demand for Non-fungible tokens (NFTs).
Ethereum is the leading blockchain network that supports NFT collectibles but it only handles a limited amount of transactions at a time.
That’s why the Ethereum blockchain halted in 2017 when CryptoKitties (Created by Dapper Labs), one of the first NFT projects, was launched on this network. Dapper Labs decided to create its own blockchain network rather than waiting for Ethereum’s update.
What is FLOW?
Flow is a decentralized network designed for decentralized apps like NFT marketplaces and large-scale decentralized games. It solves the scalability issue without involving any sharding techniques. Unlike other blockchain networks, it can quickly complete transactions with a very low transaction fee.
Thus, it proves to be a great choice for NFT collectibles and decentralized games. Flow solves a few bigger problems found in major blockchain networks.
Improved Scalability
Ethereum is the most popular platform that can host NFT collectibles. But it can’t handle large-scale projects because it can only process 12-15 transactions per second. Flow, on the other hand, can process 1,000 transactions per second. And after the next update, it will have the ability to complete 10,000 transactions per second.
Another benefit of the Flow network is that it uses a Proof-of-Stake consensus mechanism to complete the transaction process securely. Thus, it adds new blocks to the network faster than other networks.
Reduced Costs
The transaction fee on the Ethereum blockchain can be as high as $20 depending on the network’s availability. Flow only charges 0.000001 Flow tokens as a transaction fee. The users also need to pay 0.001 FLOW tokens for account creation. Still, its overall fee is a lot less than Ethereum.
Flexibility
The Ethereum users can’t make any changes to the smart contract once it’s executed. Flow enables users to introduce the beta version of the smart contract before it’s completely executed. The smart contract authors can update the code with time. The participants can continue working while the code is being updated.
However, if the authors have locked the smart contract, they won’t be able to change it at all.
Brief History of Flow
The flow was launched by Dapper Labs in 2019. The company raised around $11 million during its first funding round led by investor giant A16z. In October 2020, the company raised around $18 billion by selling Flow tokens on CoinList. Over the years, Dapper Labs has signed deals with major brands like NBA, Ubisoft, UFC, and Warner Music Group.
In late 2020, Dapper Labs gained a lot of reputation with the rising popularity of NBA Top Shot. Another funding round was carried out in early 2021 when the company raised $305 million for the development of blockchain-based games. As a result, the total valuation of Dapper Labs was raised to $2.6 billion.
How Does Flow Work?
Unlike other blockchain networks, Flow uses a multi-node, multi-role infrastructure. Thus, it creates various subdivisions of the network. As a result, only a subset of a transaction is transferred to each node. Rather than validating the transaction in one go, Flow divided the process into four different categories.
Collection Nodes – These node operators only collect data on the transactions requested by Dapps users within the network.
Consensus Nodes – These node operators set the transactions in an organized manner depending on the time of the transaction request.
Execution Nodes – These node operators complete the computation process to verify the transactions.
Verification Nodes – It’s the last stage where the work of execution nodes is double-checked to avoid false transactions.
The best thing about this validation process is that it distributes responsibilities among multiple participants due to which the risk of hacking attempts is reduced to an extent. It also helps with increasing the overall efficiency of the network.
Flow’s NFT Ecosystem
Flow hosts a number of NFT projects that are dominating the crypto industry.
CryptoKitties
The CryptoKitties participants can store their digital collectibles on the Flow network. It offers lower transaction fees while introducing a number of new features that aren’t available on Ethereum.
VIV3 NFT Marketplace
VIV3 is an NFT marketplace that was launched in January 2021. This marketplace is dedicated to supporting digital artists and content creators. It displays the artwork of famous artists Ben Mauro and Anne Spalter.
NBA Top Shot
NBA Top Shot is one of the most popular NFT projects of all time. NBA Top Shot was originally launched on the Flow blockchain. The users can trade and store their favorite collectibles on this network. NBA Top Shot has more than 600 users including Tyrese Haliburton, Mark Cuban, and other celebrities.
Flow Tokenomics
Flow is the native token of the Flow network that is used to process transactions within the network. The Flow token holders can also participate in the validation process by staking their holdings. With a circulating supply of 1 billion tokens, it has a market cap of $2.47 billion. It ranks among the 40 best cryptocurrencies in terms of market cap.
Flow token is trading at $2.4 as of May 5, 2022. It reached an all-time high of $42.948 on April 5, 2021.
Conclusion
Flow is one of the most popular crypto projects as it provides support for NFTs and decentralized games. It uses a proof-of-stake consensus protocol while incorporating a multi-role, multi-nodes infrastructure. It processes transactions faster than other networks and the transaction fee is as low as 0.000001 Flow tokens. If you need more information about how Flow netowrk works, feel free to reach out to us.
