Crypto Research

A Deep Dive Into Fantom

M6 Labs
M6 Labs
March 9, 2023 · 7 minutes

Source

by Kadeem Clarke

Let’s ‘Spook’ Our Readers Out By Diving Deep Into Fantom

Without a central authority, blockchain technology aids in the process of maintaining consensus across all nodes.

However, it runs into fundamental issues, such as a need for real-time transaction settlement and scalability, and slow confirmation times. To overcome these challenges, Fantom, a new model based on the DAG, was developed.

Let’s dive right into Fantom!

Fantom txn confirmation times are 🔥

1️⃣ History of Fantom

Fantom, founded in early 2018, is a Layer 1 smart-contracting platform that aims to provide network participants with cheap, fast, and secure transactional capacities.

Incorporated in the Cayman Islands and with ongoing operations in South Korea, Fantom Foundation is the entity in charge of Fantom development.

Dr. Ahn Byung Ik, a computer scientist, founded the project, and Michael Kong is the Foundation’s chief executive officer. The project’s chief technical advisor is the famous blockchain developer Andre Cronje, the founder of yearn.finance and Keep3r Network.

Fantom’s mission is to build a scalable, accessible platform for tomorrow’s blockchain users with ever-increasing demands.

2️⃣ What is Fantom?

Fantom is the world’s first smart contract platform based on a Directed Acyclic Graph (DAG), designed to address the scalability issues of existing public distributed ledger technologies.

Fantom is a decentralized, permissionless, open-source smart contract platform for dApps and digital assets designed to compete with Ethereum.

Fantom distinguishes itself from traditional block ledger-based storage infrastructure by utilizing an upgraded version of existing DAG-based protocols.

To maintain consensus, the Fantom platform employs a new protocol known as the “Lachesis Protocol,” which is integrated into the Fantom OPERA Chain. It aspires to provide global transaction compatibility, low-cost real-time transactions, and data sharing.

3️⃣ How does Fantom work?

Lachesis consensus

Lachesis consensus makes Fantom different from its competitors.

Lachesis is the name of Fantom’s consensus mechanism, an algorithm that participants use to agree on the state of the network and verify transactions.

It has three advantages over other consensus models, such as Proof-of-Stake:

  • It is asynchronous: nodes do not have to reach an agreement at the same time;
  • It is final: there is no need to wait for blockchain confirmations;
  • It has no leader: no single node can decide which transactions are valid and which are not (like it happens in Ethereum, for example).
  • One of the risks of having leaders is that a DDoS attack can target them – a malicious agent can flood the blockchain with spam transactions, causing validators to become overwhelmed and the network to freeze.

Lachesis is also Byzantine fault tolerant, meaning that it will continue to function normally even if up to one-third of the nodes become malicious or go offline.

Lachesis enables Fantom to complete transactions in a fraction of a second while remaining extremely secure.

📌 Here’s a fun fact: In Greek mythology, Lachesis was one of the three Fates (Moiras) who determined how long each person would live.

Fantom Blockchain Mainnet: Opera

Opera is an open-source, permissionless development environment. It supports the Solidity programming language and is linked to the Ethereum Virtual Machine.

So – it has the same range of smart contract capabilities as Ethereum. Connectivity between Fantom-based applications and Ethereum-based systems is possible while maintaining the Fantom network’s transactional efficiency.

FTM – the primary token on Fantom

The Fantom network’s primary token is FTM, which is used for payments, governance, staking, fees, and network security.

  • Payments

The Fantom network’s quick finality speeds up payments (takes around a second). Furthermore, the FTM token’s high throughput and low costs make it ideal for exchange ~ roughly $0.0000001

  • Governance

FTM is required for on-chain governance, where stakeholders can propose and vote on changes and improvements through governance. Because Fantom is a completely permissionless and leaderless decentralized ecosystem, all network decisions are made on-chain. As a result, the governance token, FTM, must participate in the voting process.

  • Staking

Staking FTM can secure the Fantom network and receive FTM tokens as a reward without needing special hardware or software. You can do it from your phone or computer.

  • Network fees

FTM is used to pay network fees, such as fees for deploying Fantom smart contracts or creating new networks, as well as transaction fees.

The fee ensures that the network is not an easy target for spam and that a malicious user cannot cause speed issues or clog the ledger with meaningless data.

Although the fees on Fantom are minimal, they are sufficient to deter attackers by making entry into the system prohibitively expensive for a malicious actor.

  • Network security

The FTM token uses a proof-of-stake system to secure the network, where stakers must lock their tokens, and validators must hold a minimum of 3,175,000 FTM to participate. Stakers and validators are compensated with fees and epoch rewards for their services.

4️⃣ The Fantom Ecosystem

DeFi

Fantom also uses a feature called Liquid Staking, which allows stakers to mint sFTM at a 1:1 ratio to their staked FTM to be used as collateral in Fantom Finance, a suite of DeFi apps provided by Fanto, allowing users to make better use of their staked FTM.

Fantom’s DeFi offerings include the following:

  • 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 has a strong ecosystem with numerous dApps. DeFi projects represent the majority of the total value locked on Fantom.

Here are some of Fantom’s most popular DeFi projects:

  • SpookySwap
  • SpiritSwap
  • Beethoven X
  • QiDao
  • Geist Finance
  • Tarot Finance
  • Spartacus
  • PaintSwap

DApps

The top 10 DApps by TVL on Fantom at the time of writing are:

  1. SpookySwap (BOO): $104.79M
  2. Beethoven X (BEETS): $48.89m
  3. Geist Finance (GEIST): $41.11m
  4. Beefy Finance (BIFI): $38.42m
  5. Equalizer Exchange (EQUAL): $32.57m
  6. Curve Finance (CRV): $28.59m
  7. Spartacus (SPA) $23.16m
  8. Hector Finance (HEC): $21.71m
  9. Fantohm (FHM): $21.69m
  10. Tarot (TAROT): $20.71m

Decentralized Exchanges (DEX)

  • Spookyswap – a decentralized exchange (DEX) based on the BOO token. It is a partner of Popsicle Finance, Daniele Sestagalli’s money market. Spookyswap offers traditional decentralized exchange functions such as token swaps, yield farming, single-staking pools, NFTs, and a bridge.
  • SpiritSwap – Fantom’s second most popular DEX, after SpookySwap, is based on the Uniswap constant-product AMM model and uses its native token SPIRIT to reward liquidity providers on the platform. Users can swap, provide liquidity, yield farm for rewards, lock SPIRIT to acquire inSPIRIT, which can be used for governance, and boost farming rewards on the platform.
  • Beethoven X – aims to be a “one-stop decentralized investment platform” on Fantom. It is based on Balancer V2 and bills itself as “Fantom’s first next-generation AMM protocol.” Beethoven provides various money market products, such as weighted investment pools, stable pools, and token swaps.

Lending

  • Geist Finance – a decentralized non-custodial liquidity market protocol in which depositors can provide liquidity in exchange for a passive income, and borrowers can receive flash or traditional overcollateralized loans. It is based on the Aave money market and competes with other Fantom AMM liquidity protocols.
  • Tarot Finance – Also offers non-custodial, trustless lending and borrowing. Furthermore, Tarot users can engage in leveraged yield farming. Through its Tarot Vaults, Tarot rewards liquidity providers. Users can earn rewards automatically by putting their LP tokens into lending pools that support Tarot Vaults.

Vaults

  • Spartacus DAO – Fantom’s most popular OHM fork and decentralized reserve currency. Users can use stablecoins like DAI to mint SPA tokens, which they can then stake for additional yield. Spartacus DAO was extremely popular during the Olympus craze (OHM).

NFT Marketplace

  • Paintswap – the top NFT marketplace on Fantom. It was initially a DeFi platform to become Fantom’s premier decentralized automated market maker, but it has since rebranded as an NFT marketplace.

PaintSwap charges 2.5% service fees and provides NFT creators with minting tools and basic listing options. It also has a staking token, BRUSH, used for marketplace listing fees, NFT minting, and collection fees.

Wallets

The Fantom (FTM) wallet is the native wallet for the FTM Opera mainnet.

The Fantom wallet allows users to transfer and receive FTM, stake, claim, and unstake FTM, and vote on governance ideas, among other things. Fantom wallets are compatible with popular mobile platforms such as Metamask, Ledger, and Trust Wallet.

These are the 5 best Fantom FTM wallets, including both software and hardware wallets:

  1. Ledger Nano X
  2. MetaMask
  3. Coinbase Wallet
  4. Coin98 Wallet
  5. TokenPocket

5️⃣ Fantom in review

Daily Transactions

The amount of activity users perform on-chain:

  • 2020–2021 yearly growth: 12,998%
  • 2021–2022 yearly growth: 131%

Average Block Size

Block space is an economic driver; users pay more to include their activity as it increases.

  • 2020–2021 yearly growth: 25%
  • 2021–2022 yearly growth: 163%

Daily Gas Used

Gas used is the economic cost; it shows how much users are willing to pay to include their activity.

  • 2020–2021 yearly growth: 9425%
  • 2021–2022 yearly growth: 86%

Growth metrics remain in the high double and triple digits, which is exceptional for any technology or growth industry. Fantom has grown with very few incentives and can continue to grow in this manner in the future.

6️⃣ Conclusion

The Fantom ecosystem is rapidly expanding, with numerous upcoming projects expected to add to the chain’s cash flow. Fantom has already attracted over $8 billion in funding across more than 100 protocols, thanks to a strong foundation of coin marketplaces and borrowing services.

Furthermore, because of its Ethereum interoperability, Fantom is being chosen by many consumers and manufacturers to design and deploy their protocols and commodities. The network’s most recent expansion confirms this trend.

Fantom is the world’s first smart contract platform that uses DAG technology to support the development of dApps while addressing current blockchains’ issues with network scalability and transaction speed.

Given Fantom’s gradual capture of more dApp developers’ attention, the Fantom ecosystem has a high chance of expanding exponentially in the future, increasing demand and value for its native FTM token.