What is Fantom? Ethereum is being taken up by a fast blockchain.

NamoTech
Coinmonks
6 min readFeb 27, 2023

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Fantom (FTM) is the most recent smart contract blockchain protocol to compete with Ethereum in terms of speed and low cost.

• In summary, Fantom is a layer-1 blockchain that aims to provide an alternative to the high costs and slow speeds that Ethereum users frequently complain about.

• Fantom is based on a blockchain with directed acyclic graphs, similar to Hedera Hashgraph.

If you use an Ethereum protocol on a particularly busy day, you'll undoubtedly be disappointed by the fees, which can easily exceed the value of your trade if you're, say, exchanging crypto worth no more than the change in your pocket. Alternative layer-1 blockchains such as Solana, Avalanche, and the subject of today's lecture: Fantom, are available to assist.

Fantom is a blockchain that supports smart contracts and is powered by its native FTM token. Fantom launched its mainnet in December 2019 after raising $40 million. Its blockchain is fast and inexpensive, and it demonstrated in 2021 that it can support its own decentralised finance (DeFi) industry.

The price of FTM increased from $0.17 in July 2021 to $3.3 in January 2022, indicating that there is a market for Ethereum alternatives.

How does Fantom operate?

The Fantom blockchain achieves some of its speed thanks to a directed acyclic graph (DAG), which displays blockchain transaction histories as a "hashgraph"—a graph of blockchain hashes. It is similar to the technology behind Hedera Hashgraph.

Lachesis, Fantom's "leaderless" consensus mechanism, is another breakthrough. The mechanism is an asynchronous byzantine fault tolerant variant of proof of stake (aBFT). The advantage is that it can function normally even if one-third of the transaction data is fraudulent.

This means that Fantom's blockchain nodes can independently validate transactions (the "asynchronous" in aBFT), rather than having to work through a queue of transactions. While transactions on Ethereum and Bitcoin can take several minutes to clear, Fantom transactions should take only two seconds.

Fantom, unlike Solana, is compatible with the Ethereum virtual machine (EVM). This makes it simple to migrate Ethereum-based decentralised applications to Fantom. (Avalanche, Binance Smart Chain (BSC), and Polygon are also EVM-compliant). To that end, FTM is available as an ERC-20 token and a BEP-20 token, indicating that the token is compatible with the Ethereum and Binance Smart Chain token standards.

What makes Fantom so unique?

The success of Fantom is best understood in the context of the so-called L1 wars. Ethereum is currently slow and expensive to use, and will remain so (assuming activity remains constant) until protocol upgrades are implemented. That could take several years. This is too late for people who want to make the most of decentralised finance protocols today, but who find ETH native DeFi apps too expensive to use.
Some developers, like those building Loopring, Abritrum and Optimism, opted to build layer-2, or L2, solutions to speed up the Ethereum experience without getting rid of Ethereum’s security.

Other blockchains chose to completely replace Ethereum—Ethereum is known as the base layer, L1 or layer-1. The leading horses in this race are Solana, Avalanche, Polkadot, Terra (technically a Cosmos appchain), and Fantom, though all native coins have fallen significantly from their all-time highs. Terra's coin, LUNA, has the largest market cap of these L1 protocols, with a market cap of $29 billion as of March 2022, followed by Solana, which has a market cap of $26 billion. FTM comes in second with $3.4 billion.

Every one of these blockchains has its own DeFi cottage industry. According to DeFi Llama data, Terra's DeFi market is the second largest after Ethereum. Ethereum has $111 billion in total value locked (TVL) as of March 2022, while Terra has $22 billion. Fantom is in fifth place with $7.25 billion. This is greater than Solana's $6.69 billion.

Who,s building on Fantom?

Fantom Finance : enables synthetic minting, liquid staking, and decentralised lending and trading.

SpookySwap is an automated market maker that is decentralised. Consider Uniswap on Fantom. Its token has the ticker "BOO" which is amusing.

Multichain is a router protocol that operates across multiple chains.

Essentially: A decentralised exchange with minimal slippage. Andre Cronje, the creator of Yearn Finance, created Solidly. It follows the same (3,3) model as OlypmusDAO.

Geist Finance is a lending protocol that is decentralised.

Where can I buy Fantom?

Fantom can be purchased from either a decentralised or centralised exchange. The largest markets for FTM, according to CoinMarketCap, are Binance, KuCoin, and FTX. FTM is supported by cross-chain bridges such as Wormhole and Multichain, and because it is issued as an ERC-20 and BEP-20 token, it can be traded on Uniswap on Ethereum and PancakeSwap on Binance Smart Chain.

The Future of FTM

The winner of the L1 wars will determine FTM's future. Ethereum is currently losing ground to emerging rival Layer 1 blockchains such as Solana, Fantom, and Avalanche.

Time will tell (sorry) whether the crypto industry becomes a winner-take-all market dominated by a single blockchain, or if crypto will embrace a multi-chain future in which blockchains become application-specific.

However, it is worth noting that FTM's market cap is roughly seven times that of SOL's—perhaps the winner has already been determined.

Fantom was one of several decentralised finance projects rocked in March 2022 by the decision of developers Andre Cronje and Anton Nell to exit the DeFi space. Between 2018 and 2019, Cronje chaired the Fantom Foundation's Technology Council and served as a technical advisor to the project; Nell was a senior solutions architect at the Fantom Foundation.

With the price of FTM dropping by double digits in the wake of their announcement, the Fantom Foundation issued a statement stressing that neither were "core developers" of Fantom and claiming that technology development on the project "is continuing as normal.

Also Read…

<<Make $100K FANTOM with GEKI Network.

<<Geki Network Token with 100x Potential in 2023.

<<Fantom-A rising star in the blockchain world.

<<What is Polygon (MATIC)? What are the possibilities for Polygon MATIC?

Disclaimer: I am not a financial advisor; therefore, do your own research and analysis before investing anywhere. The preceding article is a reflection of my own investment and experience in educational materials. Despite every effort to ensure that all information is correct and up to date, unintentional errors and misprints may occur.

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NamoTech
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