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Fantom (FTM): A Speedy and Versatile Blockchain for the Future
Fantom stands out as a blockchain with smart contract capabilities, providing a robust environment for developing decentralized applications (dApps).
Overview
Fantom's rapid and scalable decentralized application (dApp) platform derives its speed from an innovative consensus mechanism called Lachesis. Fantom also offers tools for easy integration of existing dApps, a nuanced staking rewards system, and a suite of built-in decentralized finance (DeFi) tools.
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What Sets Fantom Apart?
Fantom is a decentralized, permissionless, open-source smart contract platform for dApps and digital assets — one of many blockchain networks aiming to provide an alternative to Ethereum. The Fantom blockchain mainnet was launched in December 2019, with its network architecture aiming to solve the Blockchain Trilemma by balancing scalability, security, and decentralization.
Like other Ethereum alternatives, Fantom aims to offer more scalability and lower costs than Ethereum 1.0. A unique feature of the Fantom crypto platform is the ability for users to create and deploy their independent networks, rather than relying solely on Fantom's main consensus layer. Each application built on Fantom operates on its own blockchain. Despite running on its blockchain, each Fantom dApp benefits from the security, speed, and finality of the parent Fantom blockchain. Additionally, independent blockchains are modular, allowing developers to customize them for their specific project's needs.
Fantom's infrastructure can be thought of as a parent network comprising individual child networks hosting dApps of various sizes and types. Fantom's infrastructure is connected through its Asynchronous Byzantine Fault Tolerant (aBFT) Proof-of-Stake (PoS) consensus mechanism, ensuring the operational efficiency of the entire network. This aBFT network structure aims to maintain network security while maximizing speed.
Fantom Network Structure
Fantom uses a "leaderless" PoS consensus mechanism called Lachesis, securing the Fantom network and ensuring transactional speed and security. Lachesis is an aBFT consensus mechanism, allowing network data to be processed at different times and tolerating up to one-third of participants engaging in faulty or malicious behavior without disrupting network processes.
Lachesis also provides near-instant finality, meaning transactions are confirmed and finalized within seconds, without the need to wait for block confirmation as in Proof-of-Work (PoW) networks. This aBFT system is faster and more scalable than many of its Byzantine Fault Tolerant (BFT) counterparts.
Fantom's Lachesis functions by having each network node contain its Directed Acyclic Graph (DAG), recording the chronology of "event blocks" and respective transactions, achieving internal consensus independently. Confirmed event blocks are compiled into finalized blocks, forming the base layer of the Fantom blockchain. While independent Fantom nodes occasionally communicate about transactions and events, they do not confirm finalized blocks or the overall network state. This architecture results in a system that processes transactions quickly and achieves finality within seconds. Fantom emphasizes that its PoS mechanism is leaderless, meaning no block leaders and all participants have an equal role in its operation. Anyone can join or leave the node network at any point, and all nodes hold equal weight in the consensus protocol.
Fantom Blockchain Mainnet: Opera
The Lachesis consensus mechanism powers Fantom's mainnet deployment platform — Opera — hosting dApps operating on the network. Opera is a permissionless, open-source environment for development, boasting full smart contract capability similar to Ethereum due to its support for the Solidity programming language and integration with the Ethereum Virtual Machine (EVM). Applications built on Fantom can be designed to be interoperable with platforms built on Ethereum while maintaining the transactional efficiency of the Fantom network.
A proprietary software development kit (SDK), known as the Fantom Virtual Machine, will be released for native Fantom-based development alongside continued support for the EVM. This strategy aims to facilitate an easy transition for Ethereum-based dApp developers to build applications on Fantom.
To ensure scalability for the entire ecosystem and prevent network congestion, applications built on Fantom effectively utilize their independent blockchains. Each dApp has its blockchain, configurable to meet its specific requirements. Tokenization, tokenomics, and governance are all modular pieces that can be customized by each dApp without affecting the underlying structure of Fantom's Lachesis consensus layer.
Each independent dApp blockchain remains connected to the Lachesis PoS consensus protocol, benefiting from its speed and security. With Lachesis as the common thread tying these independent blockchains together, all Fantom dApps benefit from inherent interoperability and can communicate with each other seamlessly. With these features, Fantom aims to persuade dApp developers to transition from Ethereum to Fantom.
Fantom Staking, FTM Token, and DeFi Suite
Fantom's native utility token — FTM — drives the entire Fantom blockchain ecosystem, used for staking, governance, payments, and fees. With a total supply of 3.175 billion FTM coins, as of March 2021, 2.5 billion are in circulation. FTM is available as a native mainnet coin, an ERC-20 token in the Ethereum ecosystem, and a BEP-2 token in the Binance ecosystem.
Participation in Fantom staking is open to all, with a minimum stake of 1 FTM, by transferring their FTM to a Fantom wallet address. ERC-20 FTM tokens and BEP-2 FTM tokens will be automatically swapped for Opera FTM coins. Operating a validator node on Fantom's permissionless network requires staking at least 3,125,000 FTM (valued at more than $1 million USD as of March 2021).
Fantom offers a dynamic and rewarding staking structure for users. Users can stake their FTM at will with a validator node for a 4% annual percentage yield (APY) staking reward, a common staking model. Additionally, users can leverage Fantom's Fluid Rewards by choosing to lock up FTM for a specified time, from two weeks to a year, for higher reward rates of up to 12% APY.
Fantom also introduces Liquid Staking, allowing stakers to mint sFTM at a 1:1 ratio to their staked FTM, used as collateral in Fantom Finance — a suite of DeFi apps provided by Fantom. Some of Fantom's DeFi offerings include:
- fUSD: a stablecoin pegged to the U.S. dollar
- fSwap: a decentralized trading platform for synthetic assets
- fLend: a liquidity pool for lending or borrowing
Fantom's innovative approach to DeFi and the dApp landscape, along with its unique staking reward program, makes it stand out. The proposed use cases for Fantom's highly scalable smart contract platform include dApps related to supply chain management, payments, and smart city programs. However, its permissionless nature suggests that its actual use cases will likely exceed these predefined categories.
With its groundbreaking infrastructure, Fantom is revolutionizing fast, scalable dApp development and is making its mark in the broader blockchain ecosystem. As of February 2022, the Fantom blockchain has a total value locked (TVL) exceeding $10 billion, with 150 independent blockchains operating on its network. While facing significant competition in the blockchain sector, Fantom's speed and interoperability advantages for developers are notable, positioning the platform for further growth.
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