Fantom Crypto (FTM): A Smart Contract-Enabled Blockchain That Promises Scalability?

Imagine a blockchain platform that boasts unparalleled speed, security, and decentralization - a platform that can revolutionize the way we think about decentralized finance and smart contract applications. Meet Fantom, a next-generation blockchain platform that addresses the notorious blockchain trilemma through its unique technical framework. In this comprehensive guide, we’ll uncover the origins of Fantom, dive deeper into its technical framework, and answer the question, “What is Fantom?” We will also explore the FTM token’s utility and tokenomics, and discuss its DeFi ecosystem and dApp development. So, are you ready to get acquainted with the future of blockchain technology?

Key Takeaways

• Fantom Foundation was created in 2018 to overcome the blockchain trilemma and has raised $55 million.

• Its technical framework consists of DAG technology, Lachesis consensus mechanism, and EVM compatibility for increased speed, security, and decentralization.

• FTM tokens are used for fees/staking/governance participation. Fantom is actively pursuing partnerships & projects while overcoming competition from other platforms.

Fantom Foundation and Its Origins

Established in 2018 by Ahn Byung Ik, Fantom emerged as a groundbreaking platform designed to overcome the blockchain trilemma - the challenge of achieving security, decentralization, and scalability simultaneously. The Fantom Foundation raised $40 million that year, followed by an additional $15 million from HyperChain Capital in 2021, which contributed to securing the Fantom network.

After Ahn’s departure following the launch of OPERA, Fantom’s mainnet, Michael Kong, a seasoned software developer with expertise in constructing Ethereum-based smart contracts, took the helm of the Fantom team.

The Fantom Network

The Fantom Network is a decentralized platform that leverages Directed Acyclic Graph (DAG) technology for efficient transaction processing, supporting the deployment of smart contracts, dApps, and decentralized finance protocols. With fantom network secured, nodes in the network are responsible for maintaining security and consensus, thus ensuring the network’s accuracy and integrity.

Fantom’s fantom opera mainnet offers the following features:

• Eliminates the need for leaders, significantly increasing network security

• Settles transactions within seconds, offering fast finality essential for maintaining security and integrity

• Provides up to 300,000 transactions per second, ensuring high performance

• Low network fees, making it more attractive for users

• The network’s adoption can influence the Fantom price.

Financial Backing and Partnerships

Fantom has attracted financial support from prominent investors, including Hyperchain Capital, Nirvana Capital, Arrington Capital, Link Capital, JRR Crypto, and more. Additionally, it has established partnerships with various projects in the blockchain space, such as 8Decimal, Mapleblock Capital, the University of Sydney, Scuderia AlphaTauri, and Unstoppable Domains. These partnerships significantly contribute to Fantom’s quest for scalability, security, and decentralization.

For instance, Fantom has partnered with Chainlink to develop secure and scalable DeFi products, with Chainlink’s oracle technology ensuring the accuracy and reliability of data inputs, enhancing the security of the Fantom ecosystem.

Fantom's Technical Framework

At the core of Fantom’s technological prowess lies its Directed Acyclic Graph (DAG) technology, Lachesis consensus mechanism, and smart contract compatibility. This unique technical framework enables Fantom to overcome the blockchain trilemma, making it possible to optimize transaction speed, security, and decentralization concurrently.

DAG and Its Advantages

DAG is a data modeling tool used in blockchain technology that differs from traditional blockchain structures. Instead of blocks, a DAG has nodes and edges, where encrypted transactions are documented as nodes. The primary benefits of employing DAG over a traditional blockchain structure include increased transaction processing speed, lack of block time, and enhanced scalability.

In Fantom, DAG allows validators to independently process transactions in parallel, enhancing throughput and reducing confirmation times.

Lachesis Consensus Mechanism

Lachesis is an asynchronous proof-of-stake consensus mechanism that aims to achieve the perfect balance of security, decentralization, and scalability in the blockchain trilemma. Through Fantom’s Lachesis protocol, validators maintain their local block DAG, batching incoming transactions into event blocks and adding them to their DAG. This parallel processing of transactions significantly improves throughput and reduces confirmation times.

Lachesis offers several advantages, such as flexibility, high-speed transactions, improved scalability, asynchronous Byzantine fault tolerance (aBFT), and efficient communication.

Smart Contracts and EVM Compatibility

Smart contracts are integral in the Fantom ecosystem as they automate and enforce agreements, transactions, and business processes. Fantom’s technical framework facilitates smart contract compatibility through its Lachesis consensus mechanism, allowing the execution of smart contracts on the Fantom network.

Moreover, Fantom’s Opera mainnet is Ethereum Virtual Machine (EVM) compatible, enabling full smart contract functionality via Solidity and making it easier for developers to migrate their projects from Ethereum to Fantom.

FTM Token: Utility and Tokenomics

The FTM token serves multiple purposes within the Fantom ecosystem and has a well-defined tokenomics structure. FTM is the native cryptocurrency of the Fantom network. It is used for various purposes, such as governance activities, compensating validators and ensuring network security.

Use Cases: Fees, Staking, and Governance

FTM tokens are utilized for various purposes, such as paying for transaction fees, staking, and participating in the network’s governance process. Token holders can exercise their voting rights by applying their tokens to governance proposals, contributing to the decision-making process in the Fantom network.

Staking FTM tokens involves locking up tokens to secure the Fantom blockchain, with participants earning new FTM tokens as rewards. Liquid staking services are also offered by Fantom, allowing users to stake their FTM and receive staked-FTM tokens at a 1:1 ratio.

Tokenomics Overview

FTM tokens have a total supply of 3.175 billion, with 2,803,634,836 tokens currently in circulation. The tokens were subject to vesting periods of up to 2 years, and validators are required to stake a minimum of 500,000 FTM to help secure the network.

The allocation of FTM tokens includes:

• 40% for seed and private token sales

• nearly 33% for validation rewards

• approximately 20% for the team and project advisors

• 6% for a token reserve

• around 1.5% for the initial coin offering (ICO)

Fantom's DeFi Ecosystem and dApp Development

Fantom’s DeFi ecosystem and dApp development tools have attracted various projects and developers. The platform offers a range of resources, including:

• Developer documentation

• SDKs and APIs

• Smart contract templates

• Testnet environment

• Developer grants and support programs

These resources help developers build and deploy decentralized applications on the Fantom network, contributing to the growth and adoption of the platform.

DeFi Projects on Fantom

Several DeFi projects have successfully deployed on Fantom, taking advantage of its scalability and low fees. Notable DeFi projects on the platform include:

• Curve: an automated market maker protocol designed for swapping stablecoins with minimal slippage

• Aave: a lending and borrowing protocol within the Fantom network, offering users yield-generating opportunities

• Yearn.finance: a lending and borrowing protocol within the Fantom network, offering users yield-generating opportunities

These projects provide users with various DeFi functionalities on the Fantom network.

dApp Development Tools and Resources

Fantom offers a variety of modular tools and resources for dApp developers, making it easier to build and deploy applications on the network. With its fantom aims, the platform provides tools and resources such as Fantom Applications and Developer Tools, Thirdweb, and APIs and SDKs. Fantom solves many challenges faced by developers, and for those looking to invest in the network, they can buy Fantom to support their projects. Additionally, the fantom work ecosystem offers a robust environment for developers to thrive.

By providing resources like Fantom Developer Documentation and partnerships with platforms such as Aave, Nansen Portfolio, 1inch, Dfns, Portals.fi, Matcha, Zerion, and Wormhole, Fantom streamlines the dApp development process for developers.

How to Buy, Store, and Stake FTM

Purchasing, storing, and staking FTM tokens involve using the following steps:

1. Acquiring FTM tokens through Bybit

2. Selecting an appropriate wallet for storing your tokens

3. Participating in the network’s Proof of Stake (PoS) mechanism to earn rewards through staking.

This section will guide you through each step of the process.

Buying FTM Tokens

Bybit offers the option to purchase FTM tokens using a variety of cryptocurrencies such as BTC, ETH, and USDT. For instance, to buy FTM on Bybit, you can follow these steps:

1. Create a free account on Bybit and set up 2FA.

2. Verify your account if required.

3. Deposit funds into your Bybit account.

4. Navigate to the ‘Buy Crypto’ section.

5. Select FTM as the cryptocurrency you want to buy.

6. Choose the desired amount of FTM.

7. Review the transaction details.

8. Confirm the purchase.

Be aware that there may be associated fees when purchasing FTM tokens on these exchanges.

Choosing a Fantom Wallet

For storing your FTM tokens, you can choose from the following wallet options:

• fWallet: A Fantom wallet that facilitates the receipt, transfer, and staking of FTM, as well as access to the Fantom DeFi ecosystem.

• MetaMask: A popular Ethereum wallet that also supports the Fantom network.

• Ledger: A hardware wallet that provides enhanced security for your FTM tokens.

• Bybit: A cryptocurrency exchange and wallet platform that supports FTM.

Each wallet offers different levels of security and accessibility, catering to individual preferences.

Storing FTM on exchanges is an option, but awareness of the risk of custodial loss and absence of staking rewards is necessary.

Staking FTM and Earning Rewards

Staking FTM tokens on the Fantom network not only allows you to earn rewards but also contributes to the network’s security. To stake FTM tokens, you can participate in the network’s PoS mechanism by locking up your tokens to secure the Fantom blockchain, with staking participants rewarded with new FTM tokens.

Additionally, Fantom offers liquid staking services, allowing users to stake their FTM and receive staked-FTM tokens at a 1:1 ratio, providing more flexibility in managing their staked assets.

Fantom's Future Outlook

Looking ahead, Fantom’s future encompasses growth opportunities, forthcoming developments, and potential obstacles. The platform aims to expand its partnerships, attract more projects, and increase adoption in the blockchain space, all while enhancing its technical framework and DeFi ecosystem.

Growth Opportunities

Fantom seeks to establish strategic alliances with other blockchain projects, work with global cryptocurrency exchanges, and partner with firms and organizations in specific countries such as Uzbekistan to improve the utility and acceptance of the Fantom blockchain. The platform’s growth in Total Value Locked (TVL) and commitment to ecosystem development contribute to its appeal for developers and projects, offering numerous growth prospects in sectors like DeFi, authentication, IP rights management, and more.

Upcoming Developments

Fantom has several upcoming developments, such as improvements to the Lachesis consensus mechanism and the launch of new projects on the platform. For example, Estfor Kingdom, a novel idle adventure blockchain game, and Fantom Sonic, a revolutionary upgrade to expand the network’s capabilities, are expected to be released in the near future.

These developments showcase Fantom’s commitment to innovation and growth in the blockchain space.

Challenges and Risks

In spite of its promising outlook, Fantom faces obstacles and risks, including:

• Competition from other blockchain platforms like Ethereum and Solana

• Regulatory uncertainties

• Potential security vulnerabilities, like the ‘Demonic’ critical vulnerability, wallet compromises, phishing attacks, and liveness attacks.

Addressing these challenges and risks is vital for the continued success and growth of Fantom.

Summary

Fantom stands out as a trailblazer in the blockchain space, with its unique approach to addressing the blockchain trilemma through its innovative technical framework, DeFi ecosystem, and growing adoption. As the platform continues to evolve and expand, the opportunities for developers, investors, and users are bound to multiply, making Fantom a force to be reckoned with in the world of decentralized finance and smart contract applications.

Frequently Asked Questions

What is Fantom used for?

Fantom is a decentralized, open-source platform used to build crypto DApps and solve scalability issues with its Lachesis consensus mechanism. FTM is the native token used for staking, voting, making payments and covering transaction fees.

What is Fantom doing?

Fantom is building decentralized applications (dApps) on a fast, scalable platform with a unique consensus mechanism, Lachesis. It offers EVM compatibility for developers to port dApps from Ethereum and other blockchains, staking rewards, and DeFi tools.

What is the blockchain trilemma and how does Fantom address it?

The blockchain trilemma is the challenge of balancing transaction speed, security, and decentralization in a blockchain. Fantom tackles this issue by utilizing its high-speed consensus mechanism, Lachesis, which enables these three aspects to be achieved simultaneously.

How does Fantom's Directed Acyclic Graph (DAG) technology differ from traditional blockchains?

Fantom's DAG technology uses nodes and edges to document encrypted transactions rather than the blocks used in traditional blockchain, resulting in higher transaction processing speed, no block time, and improved scalability.

What are some notable DeFi projects on the Fantom network?

Notable DeFi projects on the Fantom network include Curve, Aave, and yearn.finance, which offer users scalability and low fees.