Fantom is the fourth largest Ethereum Virtual Machine (EVM) platform. It is a Directed Acyclic Graph (DAG) platform that allows users to send and receive cryptocurrencies and use smart contracts to interact with dApps.
Fantom claims to tackle the blockchain trilemma—the problems of blockchain platforms to trade-off between scalability, security, and decentralization—at its core. It has a high-speed proof-of-stake mechanism called Lachesis. Lachesis is an asynchronous Byzantine fault tolerant (aBFT) consensus algorithm that operates on a “gossip protocol”. Unlike traditional blockchain technology where each data is validated per block, Lachesis needs for consensus to be reached with the majority. After consensus is reached, validation is done.
Fantom has three layers. Its first layer is the Opera Core layer. Its second layer is the smart contract programmability and Ethereum Virtual Machines. And its third layer is the API Integration for dApps and developers. Fantom is EVM compatible, making it easier for developers to transfer dApps from Ethereum to Fantom. This EVM compatibility gives Fantom a rich dApp ecosystem.
The Fantom (FTM) Token
The platform also uses the FTM as its native token. The FTM token secures the network through staking for governance, payments, and fees. The FTM is used for network fees such as transaction fees and smart contract deployment fees. The total FTM supply is 3.175 billion FTM. 2.1 billion FTM tokens are in circulation, while the remaining tokens are reserved for staking rewards. This supply is distributed over different token standards to ensure easier trading. At the moment, FTM is available as a native mainnet token to Fantom, as an ERC-20 token, and as a BEP-2 token.
Owning and staking 1 million FTM tokens can make one a validator of Fantom. However, even users can participate without being a validator. FTM has a lucrative staking rewards system with a non-custodian staking mechanism. The non-custodian mechanism means that the staked tokens are not surrendered. Instead, it stays in the wallet of the stake-holder. Users can delegate tokens to validators for a lock-up period to gain staking rewards. Users can also lock coins using the mint fUSD, a stable coin that has backing by FTM at a rate of 5:1.
Fantom has a lot of advantages. Its biggest advantage is that it has a faster transaction speed compared to traditional blockchain technology. FTM claims to process up to 300,000 transactions per second, but in reality it has reached 10,000 transactions per second as of writing. Fantom also has increased finality, or shortness of time taken to confirm a block.
FTM also has low transaction costs. Because Fantom is modular, it is flexible. This flexibility, along with its EVM compatibility, helps Fantom maintain its low transaction costs. It is important to note, however, that FTM wallet support does have its limits. The transfer from one wallet to another can be costly due to bridging fees.
FTM is very secure. Its DAP and Lachesis mechanisms, along with the restrictive validation node requirement of 1 million staked FTM, makes it difficult to hack into. One needs to have at least 30% control over Fantom to successfully hack into the platform.
Fantom has recently launched an incentive program. Instead of incentivizing the users, Fantom is reaching out to developers. Fantom gives incentives to developers to create projects for users to get into the platform. This move may potentially give Fantom a bigger edge over Ethereum and its other competitors.