What is Fantom? (FTM)
Summary of Fantom
- Fantom is a smart-contract platform that uses the Lachesis consensus process to address the scalability issues that other blockchains face.
- FTM is the Fantom network’s native token. It is utilized on Fantom for staking, voting, making payments, and covering transaction costs.
- Fantom has grown in popularity due to its emphasis on scalability, allowing developers to create dApps and run smart contracts while also providing a native token (FTM) for staking and payment.
Fantom (FTM) is a blockchain platform with smart contracts that aims to overcome the decentralization, security, and scalability concerns that many blockchains face.
These three components are generally referred to as the “blockchain trilemma,” which means that focusing on one often necessitates sacrificing the other. Fantom’s revolutionary proof-of-stake (PoS) consensus mechanism, Lachesis, strives to overcome these compromises and improve all three. FTM is the Fantom network’s native token. It is used to stake, vote on important decisions, make payments, and cover transaction fees.
Why is Fantom valuable?
Fantom’s high-speed consensus process, Lachesis, solves the scalability issues that plague many traditional blockchains. Lachesis is leaderless, gives finality, and has Asynchronous Byzantine Fault Tolerance, allowing the chain to scale without sacrificing security. Lachesis also enhances transaction settlement; transmitting FTM through the network takes one second and costs fractions of a penny.
Developers can also use Fantom to create dapps and run smart contracts. Currently, dozens of companies, ranging from application providers to protocols supporting Fantom’s work in the decentralized finance (DeFi) domain, have launched dapps on the network.
Finally, FTM tokens have a variety of uses on the network, including:-
- Staking: Fantom is a proof-of-stake network, which means that the network relies on users locking up their FTM tokens to become validators. Owners can stake their tokens in this manner to gain Fantom incentives.
- Governance: Fantom has a proof-of-stake methodology, which means that the network relies on users locking up their FTM tokens to become validators. Owners can stake their tokens in this manner to gain Fantom-based rewards.
- Payments: Users can send FTM across the Fantom network more quickly and cheaply than other blockchain networks.
- Fees: Fantom tokens can be used to cover network fees for transacting tokens and deploying smart contracts on the Fantom blockchain.
Who Created Fantom?
Dr. Ahn Byung Ik, a computer scientist from South Korea, and Advisor Matthew Hur developed Fantom after seeing scalability issues with second-generation blockchain networks like Ethereum (ETH).
Fantom was officially founded in 2018, with the Fantom (FTM) Foundation raising $40 million in two funding rounds. The testnet launched in December 2018.
How does Fantom work
The Fantom network was built around four core principles:
- Modularity: Fantom’s modular architecture allows for extensive customization. Users, for example, can simply move Ethereum-based decentralized apps (dApps) to the Fantom mainnet, which is powered by Opera, Fantom’s open-source blockchain that powers its network.
- Scalability: Applications built on Fantom are independent of each other, meaning the performance and stability of one application is not affected by the traffic on the wider network.
- Open source: The Fantom protocol, which has been shared on GitHub, allows anyone to run a node and customize its underlying code.
- Security: Fantom uses the Lachesis consensus method for security, which is faster, more secure, and more scalable than the Classical and Nakamoto consensuses.
The Lachesis consensus mechanism explained
On Fantom, many features seen on other crypto networks, such as smart contracts, dApp development, and transaction settlement, are available. Its Lachesis consensus process, on the other hand, is unique in how it addresses existing blockchain scaling difficulties.
There are three main features of Lachesis:
- Finality: Transaction settlement is significantly faster than with most blockchains because there is no need to wait for blockchain confirmation when sending FTM to another person.
- Leaderless: Lachesis is a leaderless protocol, in contrast to typical PoS protocols, which frequently have fewer validators (leaders) to execute transactions. Because the fate of the network does not rest with a select number of individuals who can make mistakes, act selfishly, or be persuaded by attackers, being leaderless increases network security.
- Asynchronous Byzantine Fault Tolerance (aBFT): Nodes can reach honest consensus, even if some act maliciously, and regardless of how many do so. Asynchrony ensures all nodes don’t have to reach an agreement simultaneously.
Asynchronous Byzantine Fault Tolerance (aBFT) Explained
aBFT improves on Byzantine Fault Tolerance (BFT), which is based on the Byzantine Generals Problem. Because they are stationed at separate sites, numerous generals struggle to organise a coordinated attack on a city. Because direct communication is impossible, they communicate through insecure methods, which causes trust concerns between them. Messages can be intercepted or the generals themselves can choose to act dishonestly.
The generals in the example are the computer nodes on a decentralized network. This example describes a problem decentralized networks face — how to get participants with asymmetric information to agree on an outcome.
Byzantine Fault Tolerance (BFT) offers a solution. It lets nodes agree on the timing and order of transactions without needing to trust each other.This enables participants to reach a fair consensus even if some nodes act maliciously, for as by delaying transactions. In short, even if all nodes are not functioning properly, a BFT system can still function.
However, one limitation of classic BFT techniques is that if the number of malicious nodes in the network equals or exceeds one-third of all nodes in the network, nodes in the network will be unable to achieve an honest consensus.
This upper limit is removed by aBFT, allowing a fair consensus to be obtained even if more than one-third of the nodes act maliciously. aBFT believes that honest nodes’ messages will eventually go through, hence messages can be lost or delayed indefinitely. With fewer functioning nodes, the network can still function.