At the moment it costs around $120 in Ethereum gas fees just for a token swap on Uniswap. While gas fees in Ethereum are currently prohibitive for most transactions, with Fantom, you pay a fraction of a cent, around $0.001 and transactions are confirmed immediately. So What is Fantom and how does it works?
Fantom is powered by Lachesis, an advanced DAG-based aBFT consensus algorithm. Blockchains built on Fantom are fast, secure, and highly scalable. These features allow organizations, businesses, and individuals to develop decentralized applications that can be used in the real world, across a wide range of industries.
For a quick summary of Fantom checkout our 2-min video summary:
Fantom is a network of blockchains that provides ledger services to businesses and applications. It was founded in 2018 by South Korean computer scientist Dr. Ahn Byung lk
Fantom gained recognition because of its connection to DeFi architect Andre Cronje, who created Yearn finance. Michael recruited Andre in late 2018 to develop Fantom, though Andre stepped back to become an advisor to Fantom in 2019. He recently returned to serve as one of Fantom’s core developers. During Fantom’s first developer conference back in October, Kong detailed the Fantom project’s state before Andre came aboard.
Fantom’s mainnet went live in December 2019, but it was not until the tail end of 2020 that Fantom began to implement most of its core features and functionalities. The last piece of the Fantom puzzle was placed earlier this year with the release of Fantom’s on-chain governance process.
The Blockchain Trilema
The blockchain trilemma is the known trade-off in distributed ledger technologies, which have to balance between speed, security, and decentralization.
According to the trilemma, it’s not possible to optimize all three at the same time without any tradeoffs.
For example, a distributed ledger such as Bitcoin has arguably strong security through its consensus protocol and decentralization, but gives up speed as a result.
Fantom’s Consensus Algorithm
A consensus algorithm is a mechanism to reach agreement among nodes in distributed networks. It removes the need for a central authority and allows the whole network to agree on data and the ordering of events in a trustless way.
Nodes participating in the network maintain an exact copy of the ledger, allowing applications built on top of the consensus protocol to function correctly. The efficiency of the consensus algorithm poses huge challenge to the scalability of any blockchain.
Fantom addresses the challenge by achieving asynchronous Byzantine Fault Tolerance (“aBFT”). Fantom’s aBFT consensus allows transactions to be processed asynchronously, increasing the speed and the throughput of transactions compared to synchronous BFT ledgers such as Ethereum and Bitcoin.
Fantom achieves decentralization and security through a permissionless and leaderless consensus protocol, in which anyone can join and leave the network at any time and all nodes are equal.
aBFT consensus stands for “asynchronous Byzantine Fault Tolerant” consensus. When a network is said to be “Byzantine Fault Tolerant”, it means that nodes can still reach an agreement on an ordering of events even if part of the network acts maliciously.
Asynchronous Byzantine Fault Tolerance is the highest standard of consensus algorithms. It solves the blockchain Scalability Trilemma, according to which only two of the following three components are possible at the same time: that is Decentralization,Security & Scalability
Asynchronous BFT allows nodes in the network to confirm event blocks containing transactions without depending on any timing assumptions. This makes the confirmation of transactions by the network faster, without compromising security or decentralization.
When a transaction is confirmed by the network, it achieves complete finality and can’t be changed nor reverted. aBFT consensus reaches agreement on transactions even when some of the messages between nodes are lost, which makes the network more resilient
Blockchains such as Ethereum and Bitcoin are synchronous, meaning that transactions are appended into blocks, one at a time. They follow the longest-chain rule in which the chain with the most number of blocks determines the final ordering of events. Transactions in earlier blocks have a much higher probability of being part of the final ordering of events compared to more recent transactions.
Therefore, these networks require multiple confirmations to ensure that a transaction is permanently part of the blockchain. This behavior leads to a slower confirmation of the transactions than in aBFT consensus.
Lachesis is Fantom’s aBFT consensus algorithm. Lachesis is asynchronous, leaderless, Byzantine Fault Tolerant, and final. Therefore, any distributed ledger built on Fantom is very decentralized, secure, and with high-throughput and low finality.
How Fantom Speeds up Transanction Confirmations
Finality means that a transaction cannot be changed or reversed by any party. aBFT consensus algorithms such as Lachesis have a very low time to finality because they achieve absolute finality. Absolute finality means that a transaction is considered final once it is included in a block.
In the case of Fantom, Opera Chain can accomplish finality in 1 to 2 seconds. TxFlow can achieve finality in less than a second.
Conversely, Nakamoto consensus protocols rely on probabilistic finality. In this case, the probability that a transaction won’t be reverted increases with time. The more blocks that are created on top of a block, thereby confirming it as correct, the more difficult and costlier it would be to revert a transaction in that block. At some point it becomes theoretically impossible to alter older blocks, increasing the probabilistic finality to near 100%.
Bitcoin has finality of 30 to 60 minutes; when using Bitcoin you have to wait a few block confirmations before considering the transaction final and irreversible. Ethereum has a finality of a few minutes.
TxFlow is an aBFT middleware protocol designed for responsiveness. It runs together with a traditional consensus algorithm such as Lachesis, which guarantees network security.
TxFlow can achieve sub-second latency, which makes it ideal for any application that requires instant confirmation. Check the GitHub and the TxFlow introduction
Opera – Fantom’s Blockchain Network
Opera is a fully decentralized blockchain network with smart contracts integration for applications. It is compatible with the Ethereum Virtual Machine and powered by Fantom’s aBFT consensus. Thus, smart contracts developed on Ethereum can run on Opera, with an increase of scalability and security.
Fantom achieves transactions finality in 1 second on average.
Fantom can process thousands of transactions per seconds and can scale to hundreds of nodes.
Lachesis provides institutional-grade security to distributed networks. Fantom offers absolute finality, which means that transactions can never be reverted like in networks with probabilistic finality. Fantom is also leaderless. By removing leaders, security doesn’t rely on a small set of actors.
Smart contract support
Fantom is fully compatible with Ethereum. Developers can create and deploy smart contracts as they would on Ethereum.
Lachesis can be used to create any kind of private and public distributed ledger, using EVM or Cosmos SDK.
FTM is the native token of Fantom blockchain. It operates on Fantom’s opera network. Fantom has an ERC20 token, but it can’t be used directly on the Opera mainnet.
Here’s a breakdown of the different FTM tokens in circulation at the moment:
- Opera FTM: Used on Fantom’s mainnet Opera Chain
- ERC20: Exists on the Ethereum network
- BEP2: Exists on Binance Chain
Note that Fantom Opera addresses share the same structure as Ethereum addresses (0x…), but they are not Ethereum addresses.
The FTM token has a number of use cases within the Fantom ecosystem. It plays an essential role for a well-functioning, healthy network.
1. Securing the network
Fantom uses a Proof-of-Stake system that requires validators to hold FTM.
Anyone with at least 1,000,000 FTM can run their own validator node to earn epoch rewards and transaction fees.
Every FTM holder has the option to delegate their tokens to a validator (while keeping full custody of their funds) to receive staking rewards.
Validators then take a small fee for their services.
By locking in their FTM, validators help the network to be decentralized and secure.
2. Paying for network fees
To compensate validators for their services and prevent transaction spam, every action performed within the Fantom network costs a small fee.
This fee is paid in FTM.
3. Voting in on-chain governance
Decisions regarding the Fantom ecosystem are made using transparent on-chain voting.
Votes are weighted according to the amount of FTM held by an entity.
Basically, 1 FTM equals 1 vote.
With FTM as the governance token, validators and delegators can vote on network parameters such as block rewards as well technical committees and so forth.
4. Additional use cases
FTM will be used as a collateral on the upcoming Fantom DeFi suite, fantom.finance.
Staking and Storing FTM
Staking is used to secure the Fantom Network. Opera network uses Proof-of-Stake: validators and delegators contribute to securing the network by staking their tokens, and will receive rewards in return.
To stake Fantom FTM tokens, users will need to have a minimum of 1 FTM. The following guide is a basic walkthrough for the process:
- Install the FTM wallet on either PC, iOS, or mobile device.
- Transfer your FTM to your Opera address
- Choose from a range of validators (a reputable one) and stake preferred amount of FTM tokens. Caution is advised during this step as although validators do not have access to any tokens other than their own, if a validator node acts maliciously, there is a chance that users can lose all of their staked FTM tokens.
Staking rewards for FTM tokens changes based on the level of participation of the FTM holder. As staking occurs on-chain, personal devices such as mobiles or desktop computers don’t always have to be online or connected. As staking occurs completely independently once tokens are locked, users can safely log out of their wallet and periodically check back in to access or view their reward balance.
The Fantom Foundation is currently in charge of the governance of the network, advised by the community and validator nodes. We plan to launch a governance smart contract that will allow validators and token holders to determine the direction of Fantom, as well as to approve changes to the underlying consensus via hard and soft forks.
Find out more details on Fantom’s governance proposal.
Solutions and Partnerships
Notable partnerships and solutions have been developed with Fantom for a range of global industries like financial markets, healthcare, education, tokenized real estate, and supply chain management. Partnerships with Fantom are inclusive but not limited to crypto.com, travala, Ethereum Classic Labs, OKEx, Waves and many more.
Developing for Fantom Blockchain
Fantom’s Opera Network is fully compatible with the Ethereum Virtual Machine (EVM). It also has Web3JS API and RPC support. All smart contracts written in Solidity or Vyper, compiled and deployed on Ethereum, are fully compatible with the Opera Network.
Fantom is currently working with both the University of Sydney Programming Languages group, and the Yonsei University Embedded System Languages and Compilers Group, to build a new “Fantom Virtual Machine” (FVM), interpreter, and database to achieve much better performance and security than the EVM. The FVM will be compatible with the Solidity programming language.
Fantom’s Opera network supports all smart contract languages that Ethereum supports for the EVM, which include both Solidity and Vyper.
FTM’s Developer Incentive Program
On August 30th, the Fantom Foundation announced their 370M FTM incentive program to any dev team deployed on Fantom. Protocol teams will be able to apply for rewards from the Fantom Foundation based on their total value locked (TVL), scaling from 1,000,000 FTM up to 5,000,000 FTM in its first iteration, and to be changed accordingly depending on the needs of builders. Moreover, developers have complete liberty to choose how they wish to leverage these funds, whether it be to pay for expenses or implement liquidity mining rewards.
During the recent Fantom Developers Conference, Andre Cronje described his reasoning for rewarding the developers over the dapp users like other chains.
“It was a necessary evil to level the playing field because every chain was coming out with a new liquidity program, everyone was incentivizing liquidity, and, if you didn’t have one, you weren’t competing. So originally, I was quite against it. Because I have also been very vocal about how I feel about opportunistic liquidity, I mean, I’ve said it once, I’ll say it again, they’re liquidity locusts. They come in, they feed, they destroy, they leave. And, you know, one thing that we’ve always been focused on at Fantom since day one is a developer first. So it’s creating an environment that is safe, is familiar, and is easy to use for devs, and that’s why we made it a developer incentive program because it’s not how do we incentivize the people that are providing liquidity? It’s how do we incentivize the developers to build products that drive the metrics we want? So the lowest hanging fruit was just TVL because it is an agreed-upon measurement.”
Many of the other smart contract platforms announce their user incentive programs designed to pump Dapp usage during this Fall. Fantom chose to incentivize its developers with rewards rather than the users, which caused the spike in its TVL and Market Cap.
Popular Dapps on FTM
Fantom has had phenomenal adoption so far and Dapps on the ecosystem are growing:
Fantom keeps growing!
🔹 $5.3b TVL
🔹 1.4m+ unique addresses
🔹 700k daily transactions
🔹 78.9k unique daily users
🔹 354k unique monthly users
🔹 $8.6B volume on @MultichainOrg
🔹 93k smart contracts
sources:@FtmScanHQ @nansen_ai pic.twitter.com/VL5HJsx7Gr
— Fantom Foundation (@FantomFDN)
Following are the 5 most popular apps on Fantom
Anyswap is a trustless MPC protocol to cross-chain any assets and data between any chain.
#2) Geist Finance
Geist is a decentralised non-custodial liquidity market protocol where users can participate as depositors or borrowers.
SpookySwap is an Automated Market Maker on the Fantom protocol.
Curve is a decentralized exchange liquidity pool designed for extremely efficient stablecoin trading.
Scream is a highly scalable decentralized lending protocol powered by Fantom.
Fantom is perusing to solve some of the hardest problems in the blockchain ecosystem and is receiving increasing adoption. With its unique mission to be a Ethereum helper than an Ethereum Killer it is definitely a network worth exploring.
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