What is Fantom?
Fantom is a highly productive and scalable decentralized platform for smart contracts based on DAG (Directed acyclic graph). Why do we need it and how does it work? Let’s read together!
It is compatible with the Ethereum Virtual Machine and supports smart contracts and decentralized applications written in the Solidity programming language.
The Fantom network’s extensive ecosystem of dozens of blockchain projects, including decentralized exchanges, DeFi-crediting protocol, and NFT marketplaces, was formed by the simplicity of migration and fast and cheap transactions.
In the fall of 2021, the Fantom ecosystem entered the top 10 blockchain platforms in terms of blocked funds, and the number of unique addresses in the network exceeded 1 million.
Who created Fantom and when?
The Fantom Foundation Ltd company was established in South Korea in early 2018. Ahn Byung Ik, known in his home country for developing an app for evaluating SikSin restaurants, was the project’s founder and CEO. He is also the president of the Korea Food-Tech Association and has strong ties to his alma mater, Yonsei University, South Korea’s oldest university.
The Fantom Foundation team initially consisted primarily of South Korean developers, and the first partnerships were in the local food technology industry.
Following that, the Fantom Foundation changed its jurisdiction to the Cayman Islands, and the management team expanded significantly, becoming international. Australian Michael Kong was appointed CEO and IT director, and Andre Cronje, known in the community for his work on the yEarn Finance project, was the primary DeFi developer.
The seed and two private investment rounds took place from February to May 2018, during which the project attracted funds from a number of venture funds, including Hyperchain Capital, Signum Capital, 8Decimal, Obsidian Capital, Arrington XRP Capital, Bibox Fund, Link VC, Nirvana Capital, JRR Crypto and others.
The public Fantom tokensale in the ICO format was held in June 2018. The project was positioned as “the world’s first DAG-based smart contract platform that solves the problem of scaling and speed of transaction confirmation.”
According to the white paper, the Fantom platform would be used in a variety of industries, including telecommunications, food technology, finance, logistics, smart city development, and others.
Developers sold 40% of 3.175 billion FTM tokens in private and public token sales, raising approximately $39.65 million.
Fantom was developed in Rust, Golang and Java languages. The team initially announced a future performance of up to 300 thousand TPS, but later the figure was later adjusted to 4500 TPS.
The launch of the Fantom test network took place in December 2018, and the mainnet a year later, on December 27, 2019.
Currently, the Fantom Foundation is fully responsible for project development and network management with the support of the community and validators. In the future, project management will fall into the hands of FTM token holders.
How does Fantom work?
The architecture based on DAG uses such blockchain projects as IOTA, Nano, Dero, Coti and others. . Fantom, on the other hand, has for the first time added support for smart contracts based on a directed acyclic graph.
The Fantom technology is based on the Lachesis aBFT (asynchronous Byzantine Fault Tolerance) consensus mechanism, which has several key features:
- Asynchrony, the ability to process transactions independently by different nodes;
- Lack of leaders among nodes;
- Byzantine stability, which allows you to maintain operability even in the presence of up to a third of faulty or malicious nodes;
- High speed of transaction completion — confirmation takes place within 1–2 seconds.
Each Lachesis node maintains its own local DAG of transaction-containing event blocks. Nodes do not send blocks to each other to reach consensus, as in linear blockchains. Instead, validators exchange transactions and events on a regular basis, synchronizing them within one epoch, which lasts several minutes.
Lachesis works with the Ethereum Virtual Machine (EVM) and can be integrated with the Cosmos SDK. Developers can quickly migrate existing Solidity smart contracts and applications to the Fantom network, lowering the cost of releasing new products.
How does FTM token work?
FTM is the Fantom network’s fundamental token. It is simultaneously active in three blockchains:
- Token of the ERC-20 standard in Ethereum;
- Token of the BEP-20 standard in Binance Smart Chain;
- FTM native coin FTM in Fantom.
All three tokens are linked by Multichain.xyz, AnySwap и SpookySwap cross-chain bridges for free movement of liquidity between networks.
Users can also use Binance, which supports FTM I/O on all three networks.
FTM native tokens can be stored in the Fantom Foundation’s PWA Wallet. Also, MetaMask, Trust Wallet, Coinbase Wallet, and others all support the Fantom network.
FTM is designed to pay transaction fees, ensure the operation of validator nodes, and in the future — for project management.
The FTMscan browser, which is similar in functionality to Etherscan for the Ethereum network, is used to track transactions on the Fantom network.
Transaction fees directly depend on the network load. Taking into account the processing of 600–800 thousand transactions per day, the indicator varies in a wide range — from $0.01 to $0.1.
To validate transactions and secure the network, the Fantom network employs a Proof-of-Stake consensus algorithm. 59 validators are responsible for transaction processing. A validator node requires at least 1 million FTM, as well as a proprietary server with specific technical characteristics or a VPS comparable in performance from a cloud provider.
The validator’s annual income is approximately 13%. It consists of a reward for processing transactions and 15% of the remuneration of delegates who chose this validator.
Any FTM user can send the coins to a specific validator and receive a staking reward. The profitability of staking is proportional to the period of blocking FTM tokens chosen: from 4% per year with the ability to withdraw at any time to 13% per year with a blocking period of 365 days.
Which partnerships does the Fantom Foundation have?
Fantom has been actively working to attract partners from all over the world to implement blockchain technology among companies and government agencies since its inception in 2018.
Initially, the project’s goal was to find partners in South Korea. It announced partnerships with SoftBank Korea and Oracle Korea when it was released on the ICO. Furthermore, due to the Fantom Foundation’s close ties with the Korea Food-Tech Association, the project’s early agreements were associated with companies in the Korean food technology industry. They have not, however, received any further development.
In August 2018, the Fantom Foundation entered into a strategic partnership with POSBANK, the POS terminals operator, to create a platform for booking tables and delivering orders in 5000 restaurants in South Korea.
In October 2019, the Fantom Foundation began working with the Danish company Danfoss, which specializes in the production of equipment for building engineering systems and renewable energy. The agreement concerned the testing of distributed registry technology for IoT infrastructure.
In 2020, the Fantom Foundation will actively develop cooperation with the Afghan government in several areas at the same time. In particular, a blockchain platform for digitizing archives and transferring the institution’s document flow and the register of local enterprises to the blockchain was planned in collaboration with the Ministry of Industry and Trade. With the local Ministry of Health and the startup Chekkit, a pilot program for tracking drug supply chains was launched. However, the rise to power of radical Islamists has erased all of the Fantom Foundation’s achievements in this country.
In April 2021, the Ministry of Industry and New Technologies of Tajikistan signed an agreementwith the Fantom Foundation to use its blockchain solutions to operate the e-government infrastructure. In September 2021, the Fantom Foundation announced a partnership with one of the oldest banks in Tajikistan, Orienbank, to develop a national digital currency (CBDC).
In the same month, the Fantom Foundation in Pakistan signed an agreement to launch a pilot project to implement software based on distributed registries to optimize the work of the Punjab State Prison Administration.
In April 2021, the Fantom Foundation received an additional investment of $15 million from Hyperchair Capital, which had previously participated in the first private round in 2018.
How is the Fantom ecosystem evolving?
The Fantom Foundation has had the most success in creating a decentralized application ecosystem. The active growth of Fantom’s popularity among DeFi developers began in the spring of 2021. By autumn, several dozen blockchain projects, including Aave, Curve, C.R.E.A.M, yEarn, had already used the network.
The explosive growth was caused by two factors: the launch of cross-chain bridges for the migration of liquidity from the Ethereum and Binance Smart Chain networks, as well as the Fantom Foundation campaign to support and stimulate developers.
In June 2021, the first grant program was launched, in which nine projects participated, including SpookySwap and SpiritSwap.
In August 2021, the Fantom Foundation announced the launch of a new incentive program for teams of developers of DeFi services. 370 million FTM was allocated for this purpose, which at that time was about $300 million. Depending on the amount of funds blocked, projects receive remuneration in the amount of 1 million FTM to 12 million FTM. The funds are given out in equal shares monthly throughout the year and can be used for any purpose. In October 2021, the incentive program was expanded to projects in the field of Gamefy.
Shortly after the launch of the program, a big number of DeFi projects based on Fantom was released. In October 2021, the total TVL exceeded $5 billion, which brought the ecosystem into the top ten largest ones.
In October 2021, the TrueUSD company announced that it used the Fantom network to release a TUSD stablecoin with full US dollar collateral.
The Fantom Foundation intends to launch its new Fantom Virtual Machine (FVM) in 2022 in order to achieve higher performance and security while remaining fully compatible with Ethereum smart contracts. FVM is being developed in collaboration with the Universities of Yonsei and Sydney.
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