What is Fantom（FTM）? The Third Largest DeFi Blockchain

2022-04-19, 04:04

What is Fantom (FTM)? Fantom is a Layer-1 cryptocurrency project designed to be a faster, cheaper and more interoperable platform that is compatible with the Ethereum Virtual Machine (EVM), the base platform network to build Ethereum-based projects.

How does Fantom work? Fantom works through an updated blockchain structure called Directed Acyclic Graph, which allows the network to be faster, cheaper and more efficient for its transactional validators. It also accomplishes that through the aid of its Asynchronous Byzantine Fault Tolerance - it helps different validations of the network to occur simultaneously while leaving room for other building platforms to be integrated besides EVM.

What is the FTM token? The native protocol of the network, FTM is utilized for trading, governance and to reward transaction commissions to the network’s validators.

How to buy FTM: Once you have created a Gate.io account, head over to the Trade section and select Spot Trading. You will be directed to Gate.io’s main trading hub. From the top-left corner, search Fantom or FTM to see what pairs are available to trade from.

How to store FTM: When assets are purchased in Gate.io, they are immediately provided with state-of-the-art custody which can be accessed through the Wallet menu on the top-right corner. Just head to Funds Overview and select the chosen account that you’d like to view your assets on.

How to stake FTM: Gate.io offers staking options to thousands of cryptocurrencies, and that includes staking FTM. To stake Fantom, head to the Finance menu on the top toolbar, then click HODL & Earn. From there, click on the Flexible Term category to see what Fantom staking options are currently available.

This article provides a brief summary of Fantom (FTM), one of the most promising and entirely-functional cryptocurrency projects currently available. From its foundation to its integral mechanism and FTM token, it offers a glimpse of an extremely ambitious Layer-1 crypto project.

What is Fantom (FTM)?

Created in 2018, Fantom is a Layer-1 cryptocurrency project designed to be a faster, cheaper and more interoperable platform that is compatible with the Ethereum Virtual Machine (EVM), the base platform network to build Ethereum-compatible projects. Fantom has its own native token, the FTM, which has different uses and frameworks as we’ll uncover later in the article - besides being a trade mechanism amongst Fantom users.

The Fantom cryptocurrency was originated by the Fantom Foundation through its first official whitepaper, released on October 25th of 2018. Behind its creation were the computer scientists and developers Jiho Park, Sang-Min Choi, Quan Nguyen and Andre Cronje, who is also popularly known as the founder of Yearn Finance (YFI). In Fantom’s whitepaper, the purpose of the network is quite straightforward: to create a cheaper, faster and more secure blockchain compatible with EVM through two main algorithmic frameworks: Directed Acyclic Graph and Asynchronous Byzantine Fault Tolerance - hang in there, these terms will be explained.

Since its conception, Fantom has gradually climbed the ranks to be considered one of the main working projects to date. With the rise of Layer-1 crypto solutions in 2020 and 2021 such as Solana, Terra and Cardano, Fantom also skyrocketed in popularity as a proven method of cheap, easy-to-build platform with large scalability potential. So much so that, in January of 2022, Fantom surpassed the BNB Smart Chain as the third-largest DeFi blockchain in crypto.

How does Fantom work?

Schematics of the Fantom Opera network layers. Source: Justmy2Satoshis, on Medium

Although the Fantom Foundation was created in late 2018, the actual cryptocurrency was only activated in December of 2019, when the network and its FTM token were ready to be battle-tested as means to access EVM-compatible contracts through a different blockchain infrastructure. The Fantom network, often referred to as the Fantom Opera, operates under a Proof-of-Stake (PoS) consensus layer where holders of the FTM token can utilize it to operate nodes, validate transactions and receive rewards in return.

The use of PoS allows Fantom to operate as an optimized network for the development of decentralized apps (dApps), especially DeFi, making it compatible with large DEX and lending projects such as Curve, Sushi or Fantom co-founder’s Yearn Finance, all utilizing the MetaMask crypto wallet as its intermediary.

DAG, Fantom Opera’s core pillar

As mentioned previously, one of the two main frameworks that make Fantom special is its DAG structure, or Directed Acyclic Graph. Think of DAG as an updated version of the blockchain concept, with its own advantages compared to the traditional model. Picture a tree: in simple terms, a DAG is basically a chain of knots and verticals (unlike the linear blocks of a blockchain) that are connected by several different branches indicating the transactional process of the network. Therefore, on Fantom, each knot represents a particular transaction that was processed in its blockchain, simultaneously with other operations. Since the network functions in an asynchronous manner, new operations and tasks can begin and end at any moment - unlike the traditional blockchain model, which is linear. It also allows the Fantom Opera to keep track of the entire network in a continuous registry of cross-linked operations. It’s also very fast, taking less than a second for a task to be confirmed.

Lachesis, the Asynchronous Byzantine Fault Tolerance

Fantom’s aBFT is called Lachesis, and it’s basically a consensus mechanism across the entire system. In the future, Fantom will be able to implement several different blockchains in the network, and still keep Lachesis as its core consensus protocol. Amongst its qualities, Lachesis is asynchronous, leaderless (fully decentralized), supporting up to a third of malicious nodes (anti-byzantine fault) and with seemingly instantaneous transactions.

It works in the following manner:
First, the synchronization process of the nodes is initiated, followed by a random-selection algorithm which is executed to begin generating the next block in the blockchain. Upon selection, the communication between the randomly-picked nodes starts, which synchronizes the network through the DAG mechanism to verify the block’s transactional information. The block’s info is then transmitted to the responsible nodes and, once verified, through the aBFT consensus, approved to reinitiate the process with a new block.

What is the FTM token?

The cyclical growth structure behind FTM’s tokenomics. Source: Criptofacil

As discussed previously, FTM is the native token of the Fantom network - with equivalents in ERC-20 (Ethereum) and BEP-20 (BNB Chain) also available for use. Its main role in the network is to pay the node validators commission for verifying transactions, staking solutions and on-chain governance to vote for changes and updates to the project.

Regarding its tokenomics, FTM has a limited supply of 3.175 billion tokens, with 2.54 billion currently in circulation. Distributed daily as the network expands, these tokens are guided by the following framework:

· 40% dedicated to investors of public and private offerings.
· 15% allocated to advisors, with a three-month lock-in time.
· 10% to the founders, released after the first two years since the network came online.
· 3.6% is destinated to the protocol’s strategic reserves.
· 31.4% is to reward nodes in transactional commissions, which will be distributed until the end of 2024.

How to buy FTM

Fantom’s native token FTM can be purchased at Gate.io multi-services platform through several ways; from a cash deposit, crypto deposit, credit card and P2P trade.

Once you have created a Gate.io account, head over to the Trade section and select Spot Trading. You will be directed to Gate.io’s main trading hub. From the top-left corner, search Fantom or FTM to see what pairs are available to trade from - the most popular one being FTM/USDT.

If your account already has the proper funds to pair with the trade, you are ready to execute your order!

How to store FTM

When assets are purchased in Gate.io, they are immediately provided with state-of-the-art custody which can be accessed through the Wallet menu on the top-right corner. Just head to Funds Overview and select the chosen account that you’d like to view your assets on.
How to stake FTM

Gate.io offers staking options to thousands of cryptocurrencies, and that includes staking FTM. To stake Fantom, head to the Finance menu on the top toolbar, then click HODL & Earn. From there, click on the Flexible Term category to see what Fantom staking options are currently available - with new opportunities potentially added at any time. The same format applies to any other asset available on the platform. Browse around and see what investment options interest you!

Author: Gate.io Researcher: Victor Bastos
* This article represents only the views of the researcher and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.

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