What is Fantom (FTM) cryptocurrency and how does it work?

In the dynamic realm of decentralized finance (DeFi), Fantom emerges as a revolutionary force, reshaping the landscape with its cutting-edge technology and forward-thinking concepts. Operating as a decentralized smart contract platform, Fantom is engineered to overcome the limitations of traditional blockchain platforms, offering unparalleled scalability, security, and speed. Let's delve into the nuanced nature of the coin, starting with understanding what is Fantom crypto and ending with what makes it unique, its distinctive features, and how it is promising for investors and supporters to redefine the future of blockchain technology.

Key Takeaways

• Fantom showcases remarkable scalability, with Foundation experiments demonstrating a capacity to process up to 10,000 transactions per second.
• As the first DAG-based project with integrated DeFi layers, Fantom emphasizes interoperability, offering low fees and swift transaction speeds on its DAG.
• Operating on the Opera mainnet, Fantom seamlessly integrates with the Ethereum ecosystem, fostering a familiar environment for developers.
• Fantom pioneers the first DeFi stack built on an asynchronous Byzantine Fault Tolerant (aBFT) consensus, offering users a faster, cheaper, and more reliable alternative for various DeFi activities.

What is Fantom (FTM)?

Fantom functions as a decentralized network, employing an aBFT consensus mechanism to tackle the limitations of prior blockchains. This ensures a harmonious blend of scalability, security, and decentralization. Powered by the unique Lachesis Fantom consensus mechanism, this project becomes a highly secure and scalable smart contract platform which supports multiple blockchain layers.

EVM compatibility allows seamless deployment of Ethereum smart contracts on the Fantom network. The native token, FTM, offers diverse functionalities:

• Staking, Governance, and Network Fees: FTM plays a pivotal role in staking, governance, and covering transaction fees.
• Swift and Cost-Efficient Transactions: the token facilitates quick and economical transactions, enhancing network efficiency.
• FTM exists in three versions, providing flexibility across different blockchain environments: Mainnet token, Ethereum (ERC-20) token, and Binance Chain (BEP-2) token.

Fantom ecosystem

Distinguished as a swift, scalable, and secure digital asset platform, the Fantom ecosystem operates as a Layer-1 platform seamlessly compatible with the Ethereum Virtual Machine. Since its mainnet launch in December 2019, it has experienced substantial growth, hosting over 200 decentralized applications (dApps) spanning various categories like Decentralized Exchanges (DEXs), Cross-chain Bridges, Lending and Borrowing platforms, Yield Optimizers, NFT Platforms, GameFi Tools, Wallets, and Oracles.

Fantom introduces cutting-edge features, including a novel virtual machine, enhanced database storage, and optimized consensus mechanisms, providing developers with a state-of-the-art experience. The global network of validator nodes operates on a trustless and leaderless Proof-of-Stake model, ensuring high throughput with thousands of transactions processed per second and scalable expansion to numerous nodes.

Developers find a seamless transition to Fantom, utilizing Solidity and familiar tools like Remix, Truffle, and MetaMask, or Fantom ecosystem coins. The fact that this project supports Ethereum Virtual Machine (EVM) makes it a popular choice for developers -they deploy their dApps similarly to Ethereum. Integration with industry-leading oracle providers, such as Chainlink and Band Protocol, enhances flexibility in accessing price feeds.

In a significant move towards decentralization, Fantom's Ecosystem Vault is funded by allocating 10% of transaction fees to the community-controlled Vault. This transformative initiative is made possible by adjusting the FTM burn rate, redirecting the resulting 10% to the Vault and marking another stride in Fantom's ongoing journey towards increased decentralization.

Fantom (FTM) price, supply and Market cap

Fantom - How does it work

Fantom decentralized ledger network employs algorithms where participants collaboratively decide the incorporation of data using a consensus algorithm. Employing a Proof-of-Stake consensus algorithm, Fantom not only oversees a distributed ledger but also incorporates a state machine, transforming it into a versatile computing platform. Let's delve into some key concepts of the project infrastructure.

Directed acyclic graph (DAG)

Fantom presents a sophisticated DAG 2.0 model alongside its groundbreaking Lachesis consensus protocol. Within this model, transactions are structured in a DAG, gaining approval simultaneously. Nodes generate event blocks, shaping a DAG, which is subsequently converted into a blockchain—a sequence of confirmed blocks. This methodology accelerates transaction propagation, event block generation, and confirmation. Fantom's DAG 2.0 efficiently harnesses unconfirmed past event blocks, hastening the inclusion of additional event blocks through a stacking mechanism with collective approval.

Lachesis consensus mechanism

Fantom employs Lachesis as its asynchronous Byzantine Fault Tolerant (aBFT) consensus algorithm, distinguished by its impressive speed, scalability, and security in comparison to Classical and Nakamoto consensus. Lachesis operates asynchronously, allowing participants the flexibility to process commands at different intervals, and adopts a leaderless approach, ensuring no participant holds a privileged role. Notably, Lachesis can tolerate up to one-third of faulty nodes, including those exhibiting malicious behavior. The outputs of Lachesis are immediately usable, eliminating the need for block confirmations, with transactions confirmed within an impressive 1-2 seconds.

Opera and DeFi

Opera, a platform designed for constructing dApps, embodies a blend of security and speed. Operating as a fully permissionless and open-source environment, Opera leverages Fantom's aBFT consensus, guaranteeing swift finality and suitability for real-world applications without concerns of congestion or prolonged confirmation times. Interoperable with EVM, the Fantom Opera mainnet fully supports smart contracts through Solidity. Noteworthy is Opera's leaderless operation, significantly bolstering FTM network security, with transactions conclusively settled within a remarkable 1-second timeframe.

Fantom leads the way with the inaugural DeFi stack constructed on an aBFT consensus, providing a significantly faster, cost-effective, and secure alternative. Utilizing FTM, users can create fUSD and tap into diverse Fantom DeFi projects and utilities, such as trading synthetic assets or earning interest through lending fUSD or borrowing synthetic tokens. Transactions within the Fantom network happen nearly instantaneously and at a fraction of the cost in comparison to conventional platforms.

Blockchain Fantom (FTM) operates on

To support Fantom ecosystem projects, it operates on its dedicated mainnet, the Opera Chain, functioning as a Layer-1 blockchain network. The Fantom Virtual Machine is in turn powering this infrastructure. Consensus within the Fantom Network is achieved collectively by nodes using the innovative Lachesis Consensus algorithm. Built on DAG, this algorithm operates in a leaderless and asynchronous manner, adhering to Byzantine Fault Tolerance principles. The unique characteristics of Lachesis enable the Fantom Network to achieve transaction finality within an impressive timeframe.

A distinctive aspect of the Fantom blockchain is its gas subsidy system, strategically implemented to encourage widespread adoption of the Fantom network. At the core of the network's functionality is the Fantom (FTM) coin, which serves various purposes, including staking, governance, and covering fees within the network.

How To Use Fantom

Diving deeper into what is FTM crypto - it operates as the intrinsic token for Fantom, which is available in three versions: the Mainnet token, the Ethereum (ERC-20) token, and the Binance Chain (BEP-2) token.

FTM tokens have diverse applications within the Fantom Ecosystem:

• Staking: users can stake FTM tokens, contributing to network security and earning rewards.
• Governance: FTM token holders actively participate in governance proposals, influencing the direction of the Fantom network.
• Network Fees: this is a currency for covering network fees, ensuring seamless transactions.
• Trading: FTM tokens facilitate trading within the Fantom ecosystem, allowing users to swap them for other tokens.

Additionally, FTM tokens play a role in interacting with various DeFi protocols within Fantom. For instance, users can utilize FTM tokens to mint fUSD, a stablecoin pegged 1:1 to the USD, enabling trading in synthetic assets or earning interest by lending and borrowing synthetic tokens.

What Makes Fantom Unique?

Fantom's distinctiveness is forged through a combination of features that set it apart in the evolving blockchain landscape.

• aBFT Consensus: Fantom's uniqueness shines through its use of an asynchronous Byzantine fault tolerance (aBFT) algorithm, combined with a directed acyclic graph (DAG) consensus. This distinctive approach allows the network to achieve consensus with nodes processing and conveying information asynchronously.
• Scalability: positioning itself as a scalable and decentralized smart contract platform, Fantom secures its network through a Proof-of-Stake model. Foundation experiments reveal an impressive capacity for the consensus engine to process up to 10,000 transactions per second, showcasing robust scalability.
• Interoperability: Fantom pioneers as the first DAG-based project with integrated DeFi layers. The combination of low fees and swift transaction speeds on its DAG distinguishes the Fantom ecosystem, highlighting its dedication to interoperability.
• Ethereum Compatibility: operating on the Opera mainnet, Fantom emerges as a Layer 1 smart contract platform seamlessly compatible with the Ethereum Virtual Machine (EVM). This compatibility creates a familiar and versatile environment for developers acquainted with Ethereum's ecosystem.
• DeFi Ecosystem: Fantom solidifies its uniqueness by offering the first DeFi stack built on an aBFT consensus. Users can utilize FTM tokens to mint fUSD and access various DeFi tools, aligning with the platform's commitment to innovation and user empowerment.

Who created Fantom?

Fantom was created by Dr. Ahn Byung Ik, a computer scientist from South Korea.

History of Fantom

Fantom, envisioned and brought to fruition by the Fantom Foundation under Dr. Ahn Byung Ik's leadership, began its journey. The foundational steps were laid with the 2018 release of the testnet, followed by a successful token sale that secured $40 million, propelling the project's development. This crucial phase culminated in the launch of the Fantom mainnet in 2019. The overarching goal was clear: to provide developers with a platform for constructing scalable, secure, and exceptionally fast decentralized applications within the dynamic DeFi ecosystem, leveraging the power of smart contracts.

FTM Token Growth 

The FTM token, the driving force behind Fantom, garnered attention in the crypto sphere with consistent growth, reaching an all-time high (ATH) of $2.45 in October 2021. During this period, Fantom diligently expanded its ecosystem by integrating diverse DeFi protocols and forming strategic partnerships.

Current State 

Presently, FTM project stands as a pinnacle of achievement—a highly scalable and secure smart contract platform meticulously designed to surmount the limitations of preceding blockchain platforms. At its core, Fantom operates with the proprietary Lachesis consensus mechanism, offering the unique capability to support multiple additional blockchain layers.

The major stakeholders of Fantom

Central to the narrative of Fantom are its major stakeholders, with the Fantom Foundation at the forefront. Composed of a collaborative assembly of engineers, scientists, researchers, designers, and entrepreneurs who share a common vision, the Foundation plays a pivotal role in shaping the trajectory of Fantom's journey. As it continues to evolve, Fantom remains a testament to innovation, resilience, and a steadfast commitment to pushing the boundaries of decentralized technology.

How Is Fantom (FTM) Different To

Fantom stands apart from other well-known cryptocurrencies in a number of ways:

Bitcoin (BTC)

In contrast to Bitcoin, which serves as the pioneering blockchain-based digital currency with a singular focus on digital transactions, Fantom offers a broader utility. While Bitcoin lacks support for smart contracts, Fantom, as a third-generation blockchain, extends beyond mere digital currency functionality, incorporating advanced technologies pioneered by Ethereum.

Ethereum (ETH)

Unlike Ethereum, which serves as a versatile blockchain platform supporting smart contracts and decentralized applications (dApps), Fantom positions itself as a progressive third-generation blockchain. While both platforms share roots in blockchain technology, Fantom builds upon Ethereum's foundations, introducing innovations that go beyond the scope of traditional decentralized applications.

Litecoin (LTC)

In comparison to Litecoin, a peer-to-peer cryptocurrency established by Charlie Lee, Fantom diverges in terms of its genesis and technological intricacies. While Litecoin originated as an early spinoff or altcoin of Bitcoin in October 2011, Fantom positions itself as a modern third-generation blockchain with enhanced features and capabilities. The technical details and functional scope of Fantom differentiate it significantly from the Litecoin model.

Advantages of Fantom

Fantom offers a number of benefits which attract its users.

• Fast and Efficient Transactions: Fantom stands out with its exceptional capacity to process up to 300,000 transactions per second, delivering near-instant confirmation and finality. This is made possible by its Directed Acyclic Graph (DAG) structure, eliminating the constraints of predefined block sizes or fixed time intervals.
• Low Transaction Fees: offering a financially prudent solution, Fantom imposes minimal transaction fees, plummeting to as low as $0.00001. This cost-effectiveness positions Fantom as an attractive choice for users seeking economical options for fund transfers or the execution of smart contracts.
• Secure: Fantom employs the Lachesis consensus mechanism, bolstering the network's security by thwarting double-spending and other malicious activities. The extensibility of Lachesis to various layers within the ecosystem provides an additional layer of security for the blockchains built on the Fantom platform.
• Scalable: functioning as a highly scalable platform, Fantom effortlessly accommodates a substantial volume of transactions and users without compromising performance. Additionally, its capacity to support multiple independent yet interoperable blockchains underscores its scalability and adaptability.
• Interoperable: project’s compatibility with the Ethereum Virtual Machine enables a seamless migration of popular applications from Ethereum to Fantom. Furthermore, the platform establishes bridges to other blockchain networks, including Binance Smart Chain and Polygon, showcasing its commitment to interoperability and fostering connectivity across diverse blockchain ecosystems.

Disadvantages of Fantom

Despite offering a number of unique features and advantages, there also exist some things that might discourage users from holding Fantom.

• Limited Adoption: despite its recent surge in popularity, Fantom encounters the challenge of limited adoption when juxtaposed with more established blockchain platforms such as Ethereum or Binance Smart Chain. This constraint may curtail the array of potential use cases and growth opportunities for the platform, potentially influencing its long-term trajectory.
• Lack of Community: Fantom grapples with a relatively modest community size in comparison to its blockchain counterparts. This diminutive community scale may impede the platform's capacity to garner robust support and resources for developers aiming to contribute to its ecosystem. Moreover, it can cast a shadow on the network effect and social value associated with the platform.
• Technical Complexity: navigating the intricacies of Fantom proves to be a challenge due to its inherent complexity, demanding a higher level of technical expertise for effective utilization and comprehension. This complexity may pose a hurdle for new users unfamiliar with blockchain or Directed Acyclic Graph technology, potentially limiting broader adoption.
• Volatility: as with any cryptocurrency, the native token of Fantom, FTM, is susceptible to market volatility. The fluctuating value of FTM can impact the investment returns of token holders, subject to the dynamics of supply and demand in the market. External factors, coupled with competition from alternative platforms, may further contribute to the variability of FTM's price.

How Is The Fantom Coin Secured? 

Fantom prioritizes security through a distinctive consensus mechanism, relying on its native token, FTM. The platform employs an asynchronous Byzantine Fault Tolerant consensus, uniquely implemented as a DAG structure. This leaderless, scalable, and asynchronous version of the practical Byzantine Fault Tolerant algorithm enables Fantom to achieve transaction finality within a speed of 1-2 seconds.

The FTM token takes on a notable role in fortifying the security of the Fantom network. Validators within the network stake FTM tokens, actively participating in the consensus mechanism that validates new blocks before integration into the chain. This staking process serves as collateral, fostering an incentive structure that encourages validators to uphold honesty. In the event of malicious behavior by a validator, the staked FTM tokens are at risk of being slashed, establishing a robust deterrent against malfeasance.

Fantom further enhances its security by embracing a permissionless protocol, exemplifying its commitment to decentralization. This approach opens the network to participation from anyone, significantly bolstering its resilience and fortifying its defenses against potential attacks. The permissionless nature of the protocol ensures an inclusive and robust network architecture, elevating Fantom's overall security posture.

Buying Fantom (FTM) 

After exploring the subject of what is Fantom coin, one might want to become an owner of the cryptocurrency. To do so, head to SimpleSwap and follow these instructions:

1. For example, you want to swap BTC for FTM. Select the currency you want to exchange (e.g. BTC) in the first drop-downlist. Then enter the amount you want to swap.
2. Select FTM in the second drop-down list. You’ll see the estimated amount that you’ll get after the exchange.
3. Click the Exchange button.
4. Enter the Recipient's Address. FTM will be sent. Be careful and make sure you use the correct address.
5. Create the exchange.
6. You will see the Bitcoin deposit address. You need to transfer the necessary amount of BTC to this address to start the BTC to FTM exchange.

How to Stake Fantom (FTM)

Staking FTM on Fantom is a relatively straightforward process. Here are the steps one might need to take:

• Have a minimum of 1 FTM: this is a minimum requirement.
• Go to the Fantom staking page: this can be accessed from a computer or a mobile device.
• Log in with a compatible wallet: wallets like MetaMask are compatible with Fantom.
• Click on Staking: this will take users to the staking section.Add a delegation: choose a validator and an amount.
• Select a lock-up period and confirm: one can choose to lock up tokens for a reward rate proportional to the lock-up period — up to 365 days and 6% APR — or just stake with no lock up for the base rate of 1.8% APR.

Please note that while staking means locking up some tokens, they are still inside the wallet and only the user has access to them. One can unlock their funds at any time. However, if staking happens to a validator node that acts maliciously, - there is a risk of losing all staked tokens. Therefore, it’s important to choose the validator node wisely and make sure they are reputable.

How to Mine Fantom (FTM)

Mining Fantom (FTM) is not the same as mining cryptocurrencies like Bitcoin or Ethereum, which use Proof-of-Work (PoW) consensus mechanisms. Fantom uses a Proof-of-Stake (PoS) consensus mechanism, which means that new FTM tokens are not mined but are instead minted through a process called staking.

However, there are some resources that suggest it’s possible to mine FTM indirectly through a process known as “merged mining” or using mining software. This involves mining another cryptocurrency that uses a PoW consensus mechanism and then converting the rewards into FTM.

Here are the general steps involved in this process:

• Set Up a Wallet: first, one will need a wallet that supports FTM. This will be used to receive mining rewards.
• Choose a Mining Software: next, choose a mining software that supports the cryptocurrency that is to be mined.
• Configure The Miner: one will need to configure miner with their wallet address and the details of the mining pool they’ll be using.
• Start Mining: once everything is set up, users can start mining.
• Convert Rewards to FTM: Finally, convert the mined cryptocurrency into FTM.

Please note that this is a simplified overview and the exact steps can vary depending on the mining software and the cryptocurrency. Always do your own research and ensure you understand the process and risks involved before starting mining.

Fantom Roadmap

Fantom unveils an ambitious roadmap, strategically geared towards elevating its platform's scalability, efficiency, and overall functionality. Key highlights from Fantom's roadmap for the years are below.

Fantom is set to roll out "Snapsync," an innovative feature designed to expedite the node synchronization process. By enabling nodes to swiftly download blocks from the network and selectively request data crucial for arranging future transactions, Snapsync is poised to significantly reduce the time required for nodes to sync with the network.

In an effort to enhance the efficiency of its StateDB database, Fantom is actively developing a groundbreaking storage system known as "Carmen." This initiative is geared towards optimizing the storage and retrieval of smart contract states, ultimately bolstering the platform's scalability and operational efficiency.

Fantom is gearing up to unveil the Fantom Virtual Machine, a strategic move aimed at expediting block processing on the platform. This innovation is poised to contribute to a more scalable network, fostering increased speed and responsiveness.

Fantom's forward-looking approach extends to the expansion of its DeFi ecosystem. The platform is set to cultivate partnerships with other leading platforms and actively promote the development of new decentralized applications within its network. This concerted effort reflects Fantom's commitment to fostering a vibrant and dynamic DeFi landscape.

Future of Fantom

Despite recent bearish market trends in early 2024, the outlook for Fantom (FTM) remains optimistic, underscoring a potential for positive long-term developments. While the 50-day and 200-day moving averages currently depict a downward slope, caution is advised against interpreting this as a definitive negative long-term prognosis.

Several key factors contribute to the prevailing positive sentiment regarding Fantom's future trajectory, including the nature of what is FTM coin.

• Technological Advancements: Fantom remains dedicated to innovation and platform enhancement. Upcoming features such as Snapsync and Carmen, along with the impending launch of the Fantom Virtual Machine, are poised to elevate the platform's scalability, efficiency, and overall functionality. These advancements hold the potential to attract a broader user and developer base to the Fantom ecosystem.
• Growing Ecosystem: Fantom's strategic focus on expanding its DeFi ecosystem stands as a testament to its commitment to fostering growth. Already supporting a diverse array of decentralized applications (dApps), the platform actively forges partnerships and encourages the development of new dApps, contributing to the overall vibrancy of the Fantom ecosystem.

The price predictions anticipate a potential increase in the value of FTM in the coming years. However, it's imperative to recognize the inherent volatility and unpredictability of the cryptocurrency market. While the overall sentiment surrounding Fantom is positive, the actual performance of FTM hinges on diverse factors. Prospective investors are strongly urged to conduct thorough research and evaluate their risk tolerance diligently before considering investment in FTM or any other cryptocurrency.

The Bottom Line

Fantom is a unique project that aims to solve the scalability issues of traditional blockchain systems. With its high transaction speed and low fees, it has the potential to revolutionize the way decentralized applications are built and used. However, like any other cryptocurrency project, its success depends on various factors including technological development, market adoption, and regulatory environment. The future of Fantom looks promising with its unique technology and growing ecosystem

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.

FAQ

Here’s a list of the most popular questions about FTM.

Is Fantom decentralized? 

Yes, Fantom is a decentralized, open-source, smart contract platform. It uses a Directed Acyclic Graph (DAG) structure, which allows for faster transaction confirmation and increased scalability.

Who is behind Fantom? 

Fantom was officially launched by the Fantom Foundation. The team is made up of engineers, scientists, researchers, designers, and entrepreneurs. The founder is Dr. Ahn Byung Ik, and after he stepped away from the project, the CIO, Michael Kong, who had worked on several blockchain projects, became CEO.

Why is Fantom so popular? 

Fantom’s popularity can be attributed to its highly innovative blockchain technology. It has successfully leveraged the Ethereum killer hype. It has performed exemplarily well in the past and every indicator points to a bullish Fantom future.

When was FTM coin launched? 

Fantom was officially launched in January 2018. The FTM coin, which is the native token of the Fantom blockchain, started trading in the last quarter of 2018.

What is the name of the consensus mechanism developed by Fantom? 

Fantom uses a unique consensus mechanism called the Lachesis Protocol.

What coins are in Fantom ecosystem? 

The Fantom ecosystem includes a variety of tokens. Some of the top tokens by market capitalization include USDC, Chainlink (LINK), Dai (DAI), The Graph (GRT), Aave (AAVE), Synthetix (SNX), Fantom (FTM), Curve DAO Token (CRV), NEM (XEM), SushiSwap (SUSHI), and many others.