cryptocurrencies

Fantom Network (FTM) - A Complete Guide

Daksh Murkute | | |

Fantom is a DAG-based smart contract platform that offers programmers decentralized finance services via its own consensus algorithm. It also has its own currency, FTM, and aims to solve problems with smart contracts platforms and transaction speeds of two seconds or less.

 

Fantom is a fast and scalable platform specially designed to solve the problem of blockchain trilemma because of its unique consensus algorithm called Lachesis Protocol used to provide the required speed. Dr. Ahn Byung Ik, a South Korean computer expert, created Fantom in 2018.

 

It provides A favorable ecosystem and various tools to make DApps, and it also has built its DeFi (Decentralized protocol) tools.

 

In this blog we'll discuss everything about Fantom and its coin FTM, and why it has so much potential in the crypto world.

Contents

What is Fantom?

Why Fantom uses DAGs?

What are DAGs, and difference between DAGs and Blockchain?

How did it solve the Blockchain Trilemma?

Fantom Finance: A finance solution

How to stake in Fantom using FTM?

FTM token and where to buy it?

 

The more we think, the more we are surprised by the capabilities of blockchain technologies and cryptocurrencies.

 

At first, there was Bitcoin which made our transaction transparent and secured, and then Ethereum came with beautifully crafted smart contracts.

 

After that like a flood, many blockchain technologies, altcoins came into existence, and some of them have a tendency to solve various real-world problems.

 

One such project is Fantom and its token FTM.

 
 
Fantom logo
 
  
 

What is Fantom?

Have you visited any malls for groceries or daily needs? It has several shops inside, anybody can open his shop in it, and then people go there for shopping.

 

Let’s suppose you want to open a shop in the mall. You can pay some price to the mall owner, after some formalities, you can open your shop and can set furniture according to your need in that shop.

 

Right!! 

 

Just like that in Fantom network,

 

"Any blockchain developer can build its secure DApplications by paying some price to the Fantom, plus it can also includes various features in its applications."

In their own words, “Fantom is the network of networks.”

 

If we compared it with some of its competitors then the price of Fantom is very competitive in the market.

 
 
Fantom network
 

Fantom provides a secure, fast and independent environment to each and every DApps in its network,

 

Oh, now I remember

 

“Fantom doesn’t work on blockchain; it works on DAGs (Direct acyclic graph)”

Sorry, I forgot to tell you that, it’s my mistake.

 

Why Fantom uses DAGs?

Why?? Because no matter how many people are optimistic regarding blockchain technologies, still there are some fundamental weaknesses.

 

I know we are here to talk about Fantom but trust me it is necessary. Let’s take a detour and understand some of the blockchain’s limitations.

 

There is a popular term called blockchain trilemma, which says,

 

“It is not possible to optimize three qualities at one time in any blockchain, and the three qualities are decentralization, security, and scalability.”

  • Decentralization:- The transfer of power to distributed network from a central authority.

  • Security:- Providing security to the network from attacks and frauds and various other activities.

  • Scalability:-Ability to increase the number of transactions with an increasing number of nodes.
     

We are always forced to sacrifice one quality for the sake of the other two.

 

So, people always sacrifice scalability over decentralization and security, because these two are more important than scalability which is why we see that blockchains are slow in processing transactions.

 

For example, Bitcoin has the quality of decentralization and security, but it has not been built to scale. 

Achieving all three qualities is an impossible task that will never be done on the blockchain, everybody knows it and to some extent, they have accepted it.

 

But Fantom’s team was not in the mood to leave scalability behind. They were very stubborn to build their technology with all these three qualities. So, to make such an application, Fantom creators choose the path of DAGs (Direct Acyclic Graph).

 

What are DAGs, and differences between DAGs and Blockchain?

blockchain vs DAGs

DAG is a bit different from blockchain, 

 

Blockchain is like a

  1. Growing list of connected blocks.

  2. Each block contains addresses of the previous block,

  3. and this forms a blockchain,

Right! 

 

Whereas, DAGs stands for Direct Acyclic Graphs, it is like a tree.

 

I am sure you’ve made family trees in your school life, so just think about any family tree, they are like DAGs,

  1. It flows in one direction,

  2. Can be linked to multiple people at the same time,

  3. No child can be the child of itself, how can it be?

  4. Just one thing which is weird in DAGs is, in this tree sometimes cousins get married to each other.

 

In simple language,

if blockchain is a list, then a DAGs is a tree, branching out from one node to another, and so on.

 

We will not go into too many technical details and processes of DAGs, but in short, the benefit of using DAG is-

 

“It allows us to do a large number of transactions with lower energy consumption, which is quite difficult in the blockchain.”

 

The main purpose of Fantom to use DAGs is, to solve the blockchain trilemma, now it has all, decentralization, security, and scalability along with enough speed. 

 

How did it solve the Blockchain Trilemma?

 

Blockchain Trilemma
 

Fantom has achieved it by applying an algorithm named Lachesis protocol which runs over the Fantom Opera mainnet. 

 

It provides fastness and security to the network through the following:

  1. It gave each application its own blockchain; so that each network is independent of one another,

  2. But at the same time, it ensures that they can also communicate with one another in Fantom network.
     

Because of such independence in the network, traffic cannot affect its performance.

 

Let’s start with scalability.

 

  1. Scalability: To maintain its speed with scalability Fantom relies on a new protocol known as the “Lachesis Protocol”. I know it’s a tough name

    Lachesis is a high-speed consensus protocol and it provides enormous speed by which thousands of transactions can happen in a single second without affecting the security of the network.
     

  2. Security: Security is maintained by a well-known algorithm named traditional Proof-of-stake. I am sure you know about this.

    Well, this is also a built-in Lechasis protocol and as the fantom network grows in size it becomes more and more secure.

    And finally
     

  3. Decentralization –Lachesis protocol is also called aBFT. We will not go into its long name, but it also has the capability to provide decentralization to the network.

 

Opera mainnet

We have also used something called Fantom Opera mainnet at the start,

  1. It is an environment built under Lechasis protocol,
     

  2. It provides a fast and secure environment in which blockchain developers can build their applications.
     

  3. They’ve also made it compatible with EVM (Ethereum virtual machine) which means any application which has been created on Ethereum can also be deployed and run on Fantom without any problem.
     

Opera is open source and permissionless, so anyone can use it and customize it according to their need.

 

Fantom also has something called Fantom explorer in which you can search blocks by their hash and can see accounts, validators, and confirmed transactions of the Fantom opera mainnet environment.

After knowing about Fantom, let’s talk about Fantom’s Defi platforms.

 

Fantom Finance: A finance solution

 
 
fantom finance solution
 

Many blockchain-based companies are using smart contracts to build more advanced, secure, and reliable DeFi apps, DeFi stands for decentralized finance solutions. Fantom has also built its DeFi platform using the smart contracts.

 

The DeFi solution of Fantom is Fantom Finance.

 

"It is a one-stop solution for all your DeFi applications."

Fantom says it is much

  1. Faster,

  2. Cheaper,

  3. Secure, and

  4. Reliable platform, than any other competing platform.

I don’t know, what they are saying is right or wrong, but they have approximately 176 synthetic assets in their DeFi environment, which is quite impressive.

 

Fantom started some projects on Fantom Finance platform. Let’s look into it.

 

There are three main projects in Fantom Finance.

 

  1. fMint: In this project, users can mint fUSD, by using FTM coin.

    fUSD is a type of stablecoin, it is pegged with US dollar in 1:1. This can be used to trade, borrow and lend various synthetic assets in Fantom DeFi. 
     

  2. fSwap : By using this, users can buy and sell synthetic assets directly from their Fantom wallet by using FTM or fUSD.

    They have approximately 176 assets in synthetic form in their pool that represent the cryptocurrencies of the outside world.
     

  3. fLend: User can lend their FTM token and fUSD to the liquidity pool and earn interest on their capital.

Like many other cryptocurrencies Fantom also provide the facility of staking, you can also use it for your passive income so let’s talk about staking.

 
3 project in fantom
 

How to stake in Fantom using FTM?

FTM token is the governing token on Fantom network, it is used in many forms like in governance, in providing security, payments, and fees.

 

You can stake on Fantom using FTM token on three different levels.

 

 You can become:

    • Validators: They are responsible for securing the network. But it is quite expensive because to participate anyone needs to hold and lock at least 3,175,000 FTM. In return, they get the reward.
       

    • Delegators: it has less power than a validator, anyone can become a delegator with just 1 FTM.
       

    • Stakers: you can also earn by staking your token on the Fantom wallet. They have an online calculator in which you can calculate your annual rewards just by sliding some bars.

 

FTM token and where to buy it?

FTM is very good for sending and receiving payments, it took only 1 second to transfer money and cost about $0.0000001. Yes, that much amount of zero.
 

The total supply of FTM is about 3 billion, of which 2.1 billion are currently in circulation while the rest are reserved for staking rewards.
 

It started at a price of $0.01 in 2021 and now at the time of writing it is around $0.19.
 

You can buy FTM on all major cryptocurrency exchanges of the world, but Fantom suggests using Binance exchange, it has the most volume and lowest slippage. You can also buy FTM using BTC, ETH, USDT, or BNB.

 

Conclusion

Fantom was created by Dr. Ahn Byunk and the CEO is Michael Kong. They have a long experience primarily in the field of blockchain development, and they have a very good team of engineers, scientists, researchers, and designers. All of them are specialists in their related field and spread throughout the world.

 

The main thing which separates it from other similar types of projects is its Lechasis protocol, which is used for solving the blockchain trilemma.

 

Through token sale in 2018, it raised approx $40 million.

There are many medals on the chest of Fantom like,

 

  1. Partnership with the government of Afghanistan to overhaul the IT infrastructure.

  2. Partnership with the government of Tajikistan to build its digital infrastructure 

  3. Partnership with Pakistan to make private school institutions.

The problem I think of is, for staking demands 3,175,000 FTM which is quite a large amount that's why it has only 46 validators.

 

Overall I think Fantom has all the parameters to become a leading blockchain technology in the world.

Comment Section


Join our SUBSCRIBERS ARMY NOW TO get the latest trends

updates, techniques, methods about Crypto Trading & Investing

Change Your Financial
Fate State Life Fate State Life