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Since its inception, the decentralized sector has been booming. Fantom is a leading DeFi platform aiming to take this financial revolution to the next level.
The project advances at a remarkable speed. For instance, several reputable exchanges have already listed Fantom’s native FTM token. Also, some of the most popular DeFi protocols have hosted the coin in the past few months.
In this short guide, we take a closer look at the Fantom project and how it works. Also, we discover its pros and cons and why you should give it a try.
What is Fantom?
Fantom surfaced in the crypto space in 2019. It operates as a blockchain supporting open-source smart contracts. Also, it enables designers to develop secure, comprehensive, and modular DApps (decentralized applications).
The project aims to overcome all the limitations of previous generations of blockchain platforms. For instance, it seeks to solve decentralization, security, and scalability issues.
As a distributed ledger, Fantom works as a stack-and-builds DAG-based platform that can power smart cities. The platform hopes to achieve this goal by giving stakeholders access to smart contracts driven by smart city data and introducing dApps.
The Fantom team envisions the platform’s use cases in various industries. Among them are public utilities, smart home systems, and healthcare. Additionally, it should help with education, traffic management, resource management, and environmental sustainability projects.
How Fantom Works
Fantom’s mainnet is Opera Chain. It promotes staking services and EVM support. Also, Fantom’s utility token is FTM. The platform uses it to pay for transaction fees and protect the network through staking.
Opera is entirely open-source and license-free. For instance, any developer can create DApps on the Opera chain. Additionally, the platform supports smart contracts through Ethereum’s programming language, Solidity.
The Lachesis aBFT consensus mechanism ensures that the nodes in the Opera Chain maintain the consensus. This mechanism uses DAG technology to confirm transactions. However, unlike other DAG-based projects, Fantom aims to create the first DAG platform to run smart contracts and dapps. In other words, the plan is to provide the functionality of Ethereum, but without the platform’s scalability issues.
One advantage of DAG technology is that nodes on the network can process transactions asynchronously. The processing of each transaction is very similar to the way the traditional blockchain stores its transactions.
However, using DAG technology, not all transaction data requires mandatory storage on every node in the network.
The Platform’s Layers
The network also uses the second type of node, the witness node. These nodes use Delegated Proof of Stake (DPoS) consensus. As a result, they are responsible for controlling and verifying the data available on the primary node. This allows transactions to complete faster while maintaining network security.
Fantom’s second layer has an Opera Ware layer. This one is located in the middle of the log and performs specific functions on the platform. Among them are giving rewards, making payments, and writing story data.
Fantom uses story data to keep track of all past transactions. Every transaction and every interaction with smart contracts on the Fantom network stores a small amount of data. With this data, it is possible to call up transactions that have taken place in the past.
The third layer is the Opera Application Layer. The Opera application layer provides a publicly available application programming interface (API). Other applications can use its functions to forward their story data links to the Opera Ware layer.
Benefits of Using Fantom (FTM)
One of Fantom’s strengths is that it meets all three requirements of blockchain technology: decentralization, security, and scalability. Traditional blockchain platforms like Bitcoin focus entirely on decentralization and security at the expense of scalability. This makes Bitcoin less suitable for small daily transactions that require high speeds.
To solve this problem, Fantom uses the Lachesis, a BFT (Asynchronous Byzantine Fault Tolerance) consensus mechanism based on DAG (Directed Acyclic Graph). Therefore, Fantom is a robust, scalable, and secure smart contract platform that can process over 20,000 transactions per second.
Another advantage of Fantom is that the platform is compatible with EVM (Ethereum Virtual Machine). As a result, developers can quickly transfer their DApps developed from Ethereum to the FTM network.
This feature also has advantages for the user. For example, web3 wallets like MetaMask can easily connect to the Fantom network. This way, users can seamlessly switch between Ethereum and Fantom in the same wallet.
Fantom Token (FTM)
FTM is the primary token on the Fantom network. Its primary role is to protect the network through staking, governance, payments, and fees.
Validator nodes must hold a minimum of 3,175,000 FTMs, and pledgers must lock their FTMs. In return for their service, both receive epoch awards and fee awards.
Additionally, the high throughput, fast finality, and low fees of the] network make FTM tokens ideal for payments.
On-chain governance also requires FTM. Fantom is a decentralized ecosystem that does not require any permission or guidance. Therefore, all network decisions go through on-chain governance. This system enables token holders to propose and vote on changes and improvements.
The Fantom Team
Fantom consists of 12 platform developers. Besides them, the team includes managers, community outreach members, marketing members, and regional directors.
Fantom’s founder is Dr. Ahn Byung Ok. The author of Fortune magazine has a PhD. in computer science. Also, he is the chairman of the Korea Food Technology Association. However, he is currently no longer part of Fantom. Furthermore, his LinkedIn profile does not mention any previous contacts with the project.
Currently, Fantom’s CEO is Michael Kong, an expert in developing smart contracts in the blockchain area. Before joining Fantom, he was the Chief Technology Officer of Block8, a blockchain incubator.
A notable mention at Fantom is the DeFi architect Andre Cronje, who is famous for his developer role in Yearn Finance.
The DeFi space consists of hundreds of projects providing users with decentralized and scalable platforms. However, Fantom stands out with the help of DAG technology.
While it isn’t the first to adopt DAG technology, Fantom promises to add value to this concept. For instance, it can do so by adding infrastructure that supports smart contracts and dApps. This way, it can provide more benefits than projects that do not offer smart contract functionalities.
Although Fantom is still in its infancy, it has significant advantages over more famous platforms like Ethereum and Binance Smart Chain. Due to its DAG-based Lachemis consensus mechanism, Fantom ensures high scalability without compromising its decentralization or security.
If Fantom continues in its current development direction, it could become a significant player in the DeFi sphere.