Fantom: A Fast and Flexible Next-Generation Blockchain
Fantom is a blockchain with smart contracts that provides a stable environment for dApp development.
Summary
The speed of Fantom’s decentralized application (dApp) platform comes from a unique consensus technique dubbed Lachesis. Fantom also includes tools for integrating existing dApps, a complex staking incentive structure, and a set of built-in decentralized finance (DeFi) capabilities.
Contents
- What Is Fantom?
- Fantom Network Structure
- Fantom Blockchain Mainnet: Opera
- Fantom Staking, FTM Token, and DeFi Suite
What Is Fantom?
Fantom is a decentralized, permissionless, open-source smart contract platform for decentralized apps (dApps) and digital assets, and it’s one of a number of blockchain networks designed to compete with Ethereum.
The Fantom blockchain mainnet launched in December 2019, and its network architecture aims to solve the blockchain trilemma by achieving a stable balance of scalability, security, and decentralization.
Fantom, like other Ethereum alternatives, aims to offer more scalability and lower costs than the legacy first-mover smart contract platform in its Ethereum 1.0 incarnation. Fantom’s infrastructure is linked through an asynchronous Byzantine Fault Tolerant (aBFT) Proof-of-Stake (PoS) consensus method that ensures the network’s operating efficiency.
The aBFT network structure is optimized for speed while maintaining network security.
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Fantom Network Structure
Fantom is built on top of Lachesis, a bespoke “leaderless” PoS consensus mechanism that secures the Fantom network while also ensuring transactional speed and security.
Lachesis is an aBFT consensus method, which implies network data can be processed at different times and the network can tolerate up to one-third of users participating in an incorrect or malicious activity without harming network processes.
Lachesis also has a near-instantaneous conclusion. This implies that transactions are confirmed and completed in an average of one second, rather than the time it takes for Proof-of-Work (PoW) networks to confirm blocks.
This aBFT system is substantially faster and more scalable than many of its Byzantine Fault Tolerant (BFT) predecessors because it avoids the rather lengthy block confirmation phase.
When we look more closely at how Fantom’s Lachesis works, we discover that each network node has its own Directed Acyclic Graph (DAG), which stores the chronology of “event blocks” and their associated transactions, with each node attaining internal consensus independently.
After then, confirmed batches of event blocks are assembled into finished blocks that are confirmed across the Fantom network. Finalized blocks, which make up the Fantom blockchain’s base layer, are made up of event blocks that have been confirmed by independent nodes.
While independent Fantom nodes interact with one another about transactions and events on a regular basis, they do not confirm finished blocks or the network’s overall status.
As a result of this architecture, a system that processes transactions swiftly and reaches finality in seconds is created. Fantom emphasizes that its PoS process is leaderless, implying that no block leaders exist and that no players play a special role in its operation.
Anyone can join or leave the node network at any time, and all nodes in the consensus protocol have equal weight.
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Fantom Blockchain Mainnet: Opera
Fantom’s mainnet deployment platform, Opera, is powered by the Lachesis consensus apparatus servers, which host dApps on the network.
Opera is a development environment that is permissionless and open-source. Because of its support for the Solidity programming language and connection with the Ethereum Virtual Machine (EVM), it offers the same range of smart contract capabilities as Ethereum.
While maintaining the transactional efficiency of the Fantom network, applications created on Fantom can be designed to be interoperable with platforms built on Ethereum.
A proprietary software development kit (SDK) known as the Fantom Virtual Machine will eventually be released for native Fantom-based development alongside continued support for the EVM — a strategy designed to entice Ethereum-based dApp developers to make an easy transition to Fantom-based development.
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Fantom Staking, FTM Token, and DeFi Suite
The Fantom blockchain ecosystem is powered by FTM, Fantom’s native utility coin. On the network, FTM tokens are utilized for staking, governance, payments, and fees. As of March 2021, there were 2.5 billion FTM coins in circulation out of a total quantity of 3.175 billion. The rest will be allocated as staking incentives for Fantom.
FTM is a native mainnet coin, an ERC-20 token on the Ethereum blockchain, and a BEP-2 token on the Binance blockchain.
With a minimum stake of 1 FTM, anyone can participate in Fantom staking by using Multichain to exchange their ERC-20 FTM or BEP-2 FTM tokens for Opera FTM coins. In addition, at least 1 million FTM (worth over $1 million USD as of March 2021) must be staked to run a validator node on Fantom’s permissionless network.
For users, Fantom offers a fairly dynamic and lucrative staking structure. Users can stake their FTM with a validator node at any time for a 4% annual percentage yield (APY), which is a standard staking scheme. Users can, however, take advantage of Fantom’s Fluid Rewards by locking up FTM for a defined amount of time — ranging from two weeks to a year — to achieve higher reward rates up to 12% APY.
Stakers can mint sFTM at a 1:1 ratio to their staked FTM to be used as collateral in Fantom Finance, which is a suite of DeFi apps provided by Fantom, allowing users to get more use out of their staked FTM. Fantom offers a variety of DeFi services, including:
- fUSD: a Fantom-based stablecoin that’s pegged to the U.S. dollar
- fSwap: a synthetic asset decentralized trading platform
- fLend: a liquidity pool from which users can lend or borrow
Fantom’s approach to the DeFi and dApp scene, as well as its staking reward program structure, are both revolutionary. dApps linked to supply chain management, payments, and smart city initiatives are also proposed use cases for Fantom’s highly scalable smart contract platform, some of which are already being deployed throughout the world.
Fantom’s approach to quick, scalable dApp development is still establishing itself in the wider blockchain ecosystem as the first of its type with its complicated and unique infrastructure. Despite the fact that the developing dApp sector is already crowded, the speed and interoperability advantages that Fantom provides dApp developers are considerable, and the platform is primed to acquire much more traction.
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