Jul 27
A Serious Layer-1 Contender? Fantom (FTM) Full Review
Fantom (FTM) is the native token of the layer-1 Fantom blockchain, which promises users a high-speed and secure smart-contract compatible service that can take on the likes of Ethereum (ETH) and Solana (SOL).
Since its launch, the Fantom project has generated considerable hype due to its alleged capability of solving the trilemma facing layer-1 blockchains, namely security, decentralization, and scalability.
In this article, we’re going to take a deep dive into the technology behind Fantom, take a look at its use cases and investigate whether this really is a potential ‘Ethereum killer’ that’s trading at an 85% discount from its all-time high.
How Does Fantom (FTM) Work?
Fantom’s network is fully smart-contract compatible and operates a permissionless system like other layer-1 blockchain projects.
Transactions and governance are fueled by the native FTM utility token that is issued as an ERC-20 token on the Ethereum network and as a BEP-20 token on the Binance blockchain.
By offering high-speed, scalable, and secure smart-contract solutions, the Fantom network is a dApp developer’s dream, and this has allowed it to grow into a thriving DeFi ecosystem.
The reason Fantom developers claim that their network is more secure and scalable than its competitors is its unique design and consensus mechanism known as Opera.
How Fantom Operates
Opera is the Fantom’s main net, and it’s fully compatible with the Ethereum Virtual Machine (EVM), which is why dApps can be imported across the blockchains.
Unlike a traditional blockchain that is usually designed in a linear manner, Fantom’s Opera chain leverages a directed acyclic graph (DAG) just like the Hedera (HBAR) project.
A DAG allows nodes to confirm transactions in a more independent manner before batches of transactions are sent to the primary chain to be finalized.
Giving nodes more freedom means Fantom is able to achieve higher transaction speeds (TPS) than traditional blockchains.
Fantom’s consensus mechanism is known as ‘Lachesis,’ and it uses a proof-of-stake mechanism operating an asynchronous Byzantine Fault Tolerant (aBFT) system.
The aBFT consensus mechanism guarantees very quick finalization speeds meaning that transactions can be completed much faster than on proof-of-work systems used by Ethereum (ETH) and Bitcoin (BTC).
Flexible and Adaptable
The Fantom network has created a very adaptable and flexible project thanks to its EVM compatibility as it opens the door to countless dApps already running on Ethereum.
As Ethereum fees and speeds continue to hinder the experience of both developers and users, other layer-1s are becoming a popular alternative, and thanks to its flexibility, Fantom appears to be ahead of the competition.
In addition to high-speed transactions, thanks to aBFT, Fantom is extremely resistant to malicious nodes that try to undermine the network; even if a third of all nodes try to undermine Fantom aBFT, the network will incur no issues.
Not only do the developers of Fantom expect it to attract a wide range of dApps, but they also believe that FTM is so scalable that it could become the network where cities and public utilities operate, although this is a very long term goal that is yet to bear any fruit.
Advantages and Disadvantages of Fantom (FTM)
The Fantom network clearly has an impressive list of attributes, but before you go all in, let’s take a look at the project’s advantages and disadvantages.
As you can see the project does suffer from some drawbacks, but overall it’s an incredibly promising network with a lot of potentials to grow into a major layer-1 player.
Who created Fantom (FTM)?
Fantom was created by the South Korean computer scientist Dr. Ahn Byung Ik in 2018, who set out to solve the trilemma of stumbling blocks facing layer-1 blockchains. Byung later left the project, and Michael Krong became the new CEO, with cryptocurrency titan Andre Cronje taking over the DeFi side of the project.
Andre Cronje’s addition to the Fantom team was a huge boost for the project due to his status as one of the godfathers of Web 3.0 and DeFi. However, in March 2022, Cronje announced he was leaving the world of DeFi behind, which led to a crash in FTM’s price.
Interestingly Cronje appears to have rejoined the project this month (May’22), and the network’s native token has rallied as a result. Cronje’s presence is clearly a massive boost for Fantom.
Why Does Fantom (FTM) Have Value?
Fantom’s value is derived from its ability to overcome the trilemma that has so far baffled layer-1 blockchains.
The Opera networks DAG-based consensus mechanism has created a system that processes transactions at extremely high speeds for a low cost solving two parts of the trilemma.
Furthermore, the project has the potential to solve the third trilemma of decentralization, although currently, in this area, it still lags behind due to the high entry barrier for nodes.
Although FTM is still developing, it has already become home to dozens of dApps and has shown its ability to process transactions safely and quickly, making it a valuable network to both users and developers.
Price of Fantom (FTM)
FTM has a maximum supply of 3,175,000,000, of which 2,541,152,000 tokens are in circulating supply. The crypto hit an all-time high of $3.46 in October 2021, which was a period of euphoria not only around this project but the cryptocurrency market as a whole.
2022 has been a difficult year so far for most crypto projects, and it’s seen FTM drop over 85% from its all-time high to $0.5, and with a market capitalization of $1.3 billion, it’s ranked #57.
While FTM’s chart yearly might look ugly, there are some positive movements taking hold in the medium term. In the last seven days, the token has jumped 30%, primarily due to the rumors surrounding Cronje’s return to the project.
Most major price analysts believe that FTM’s recent upside move is part of a long-term trend that will see the token move back towards its all-time high.
DigitalCoinPrice forecasts the token to hit a maximum price target of $0.7 this year and move above $1 by 2025.
TradingBeasts are a little more bullish than DigitalCoinPrice, forecasting the token to hit a maximum of $0.8 this year and move past $1 in 2024.
GovCapital has issued an extremely bullish forecast for the project, with its token expected to hit $1 later this year and be trading well above $5 in 2025.
$FTM 1-year price chart CoinMarketCap
Why Use Fantom (FTM)?
The main incentive for developers to use Fantom is its EVM compatibility; as smart contracts on the network are written in Ethereum’s Solidity coding languages, they can be implemented more cheaply, quicker, and more securely through Fantom.
If you’re an investor, then FTM is attractive because of its potential, with a relatively small market cap and ambitious objectives; this is a project that could add some hefty returns to your portfolio in the long term.
How Can I Buy Fantom (FTM)?
Swapping ETH or any other crypto for FTM through Swapzone is extremely easy and ensures that you pay minimal transaction fees by comparing 15+ exchange providers. Follow these simple steps to buy FTM with ETH:
- Select the ETH for FTM exchange page.
- Enter the total amount of ETH you are going to exchange.
- Choose the best ETH to FTM swap offer.
- Click on the Exchange button.
- Enter your wallet address to receive FTM to your wallet.
- Send your ETH deposit to the generated address.
- Wait for your ETH-FTM swap to be done.
Does Fantom (FTM) Have Staking?
You can stake your FTM tokens by delegating them to a validator node on various platforms; we’ve got a list of options for you to consider right here:
- Binance: APY 1%
- Coinbase: APY 4–14%
- fWallet: APY 4–14%
- Nexo: APY 18%
- Ledger Nano: APY 4–04%
- Okex: APY 1–6%
The Takeaway
The Fantom project is, without doubt, one of the most impressive layer-1 contenders, so far, it appears to have solved two of the issues facing Ethereum security and scalability, and it could well crack decentralization as well.
Now that Cronje is seemingly back on the team, the project’s DeFi space is likely to expand rapidly, and the crypto community will show more love to the project with the knowledge that one of the industry’s greats is at the wheel.
In summary, it’s hard to overlook a project like FTM, especially when it’s trading at such a massive discount from its all-time high.
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