FANTOM — The Next Step In The Blockchain Revolution!
World’s first DLT platform which combines both DAG and dApps.
Introduction — What Exactly Is Fantom?
According to their whitepaper, Fantom is the world’s first DAG (Directed Acyclic Graph) based smart contract platform that supports dApp development. Fantom solves the scalability issues of existing public distributed ledger technologies (DLTs). The platform distinguishes itself from the traditional block-ledger based storage infrastructure (which is commonly known as the blockchain) by employing an improved version of existing DAG-based protocols.
The Fantom platform adopts a new protocol for achieving consensus in the distributed DAG environment, known as the ‘Lachesis Protocol,’ to maintain consensus across all the participating nodes. Just like a traditional blockchain, Fantom has also introduced its native chain known as the ‘Fantom Opera Chain’ which handles all the transactions and act as an application layer for decentralized application development. Decentralized applications built on top of the Fantom Opera Chain enjoy instant transactions and near-zero transaction costs for all the users on the Fantom platform.
Directed Acyclic Graphs — What are they and how do they differ from the blockchain?
Many people often confuse the word ‘blockchain’ with ‘protocol’. When we talk about cryptocurrencies, blockchain is not the only technology, but one of the many technologies which work together in conjunction to make the system work.
Technically, blockchain is just a data structure that holds all the transaction information together, just like a traditional ledger. Some people like to call blockchain a ‘hashed linked list’ secured by a consensus algorithm such as Proof of Work (PoW) or Proof of Stake (PoS).
Similarly, DAG is just another kind of data structure taken from the famous ‘Graph Theory’ in mathematics. Fantom, at its core, is a DAG structure with Lachesis Protocol to maintain consensus across all the DAG nodes. Understanding DAG is essential before we dive deeper into the Fantom ecosystem.
Cyclic Graph
Imagine a network of nodes where information can flow freely from one node to another in either direction. The information can leave any node at a given time, flow towards an adjacent node and come back to the original node. If this process of information leaving a node and coming back to it happens without ‘one node encountering twice,’ this would be called ‘cyclic graph.’
In other words, the information can complete a ‘cycle’ and won’t have to go through the same nodes twice, and this is why we call it ‘cyclic.’ Below is the image of the cyclic graph attached for a reference.
Acyclic Graph
Acyclic graphs are just the opposite of cyclic graphs. In an acyclic graph, the information can flow freely but can only return to the original node after encountering the same node twice. Unlike cyclic graphs, there are no ‘cycles’ in acyclic graphs, and the information can only flow in either direction but by doubling back and hitting the same nodes twice. Below is the image of an acyclic graph.
Directed Acyclic Graph (DAG)
We have already discussed the acyclic graphs, but what about the term ‘directed’? Well, people often think that ‘Directed Acyclic Graphs’ are directly derived from ‘Acyclic Graphs’ which is not the case.
If we give directions to nodes in the ‘cyclic graph,’ such that no two nodes can’t connect twice to each other and every node only acts as a one way street for information flow, it would be called a directed acyclic graph or a DAG. Below is the image of a directed acyclic graph (DAG) attached for a reference.
Difference Between DAG And Blockchain
Traditional blockchain is a hashed linked list data structure (like bitcoin), which we can call an acyclic graph because its a single chain of blocks with each block having a reference to a previous block in the chain. The most significant difference between DAG and Blockchain, aside from their architecture, is how they process transactions on the network.
Blockchain is designed in synchronous, which means that the entire network is working on adding a single block in the blockchain. If two miners produce different blocks at the same time, then a branch within a blockchain is created which is later resolved after a set amount of time when the network agrees upon the longest chain. This synchronous behavior is one of the main reasons behind the scalability problem, especially for blockchains with virtual machines and smart contract support (like Ethereum, NEO, EOS, etc.).
DAG, on the other hand, is entirely asynchronous, which means that multiple chains can co-exist, transactions can be settled and added to the blocks in real-time. The information flow on a DAG is very efficient and highly scalable. Just like a traditional Blockchain, DAG is a data structure coupled with a powerful consensus mechanism, and it can prove to be the best platform for the future. Fantom has utilized this DAG along with their Lachesis Protocol to build a powerful decentralized system which is highly scalable and what they call ‘future proof.’
Why Has Fantom Chosen DAG Instead Of Traditional Blockchain Implementations?
One of the biggest problems with existing blockchain architectures, undoubtedly, is scalability. Bitcoin can only handle up to 8 transactions per second while Ethereum can handle up to 15. On the contrary, centralized players such as Visa and MasterCard can handle thousands of transactions per second. It was initially believed that part of the reason for lack of scalability is the consensus mechanism, such as Proof of Work (PoW) introduced in Bitcoin. Many new players rushed towards disrupting this space of consensus protocols. We saw many innovations in this space like Proof of Stake, Delegated Proof of Stake, Proof of Elapsed time, and others.
However, even the Proof of Stake consensus algorithm makes no significant difference. EOS is one of the most famous PoS-based platforms, claiming that it can handle more than 10,000 transactions per second. Cardano is another popular PoS-based platform claiming to handle only 258 transactions per second. To build a decentralized platform for billions of people and smart cities of the future. Architectures need to scale to not just a few thousand, but hundreds of thousands of transactions per second (extremely high throughput).
Innovation is needed not just in the consensus algorithms, but in the underlying blockchain architecture themselves. Fantom has chosen to use an improved version of DAG, which, coupled with the optimized consensus protocol, can handle up to 500,000 transactions per second. Fantom wants to improve even further to achieve a very high throughput of around a million transactions per second. This would power the future of smart cities by providing a unified platform for billions of people.
DAG has many great properties like instant transaction settlement, clustering, asynchronous networking, and efficient propagation of messages. Fantom uses an improved version of DAG, which can support decentralized applications using smart contracts. Lachesis Protocol having built-in Asynchronous Byzantine Fault Tolerance (ABFT) based Proof of Stake (PoS) system for maintaining consensus.
The Fantom Virtual Machine (FVM)
If we talk about the existing blockchain innovations, specific platforms are already built on DAG, such as IOTA, Nano, or Hashgraph. The future lies in programmable blockchain platforms such as Ethereum or NEO, which allow building an ecosystem of decentralized apps (dApps) that people can use. However, due to the complex nature of DAG data structure, existing DAG-based platforms such as IOTA, Nano, or Hashgraph doesn’t include a virtual machine for smart contract execution and development.
Fantom is the world’s first DAG-based platform, with an integrated virtual machine known as the ‘Fantom Virtual Machine,’ or FVM for short. Fantom provides a SCALA-like functional programming language for executing smart contracts on top of FVM. FVM allows executive smart-contract byte code efficiency across all operating systems, according to their whitepaper. With such a high throughput, Fantom is becoming the first platform to disrupt the existing infrastructure for payments and supply-chain management.
Decentralized applications (dApps) powered by FVM, built on top of the Fantom Opera Chain, will provide transparency and cost reductions for industries including, but not limited to:
- food technology
- telecommunication
- banking
- electricity
- real estate
- autonomous vehicles
using instant payments with near-zero cost while maintaining hundreds of thousands of transactions per second.
The Fantom Lachesis Protocol
The Lachesis protocol is what powers the full Fantom ecosystem. As discussed earlier, Fantom uses an improved version of DAG, which has a network of nodes handling the different chain of events. Just like the full nodes in standard blockchain-based systems. Fantom Opera Chain is stored on every single node which participates in the network. There is one special node in the Fantom Opera Chain known as the Witness Node, responsible for checking the validity of the transactions across all the nodes.
In Lachesis Protocol, every transaction is considered as ‘chain event.’ Once the Witness Node thoroughly verifies a transaction, the protocol is responsible for saving the chain event in the Fantom Opera Chain with a timestamp. Unlike many other DAG-based platforms, the Lachesis Protocol will not only secure and speed-up transactions above 300,000 TPS but also provide an open-source and permission-less decentralized platform of the future.
The Fantom Opera Chain Architecture
The core Fantom architecture is built on three primary layers, discussed below.
Opera Core Layer — This layer is responsible for creating different chain events and maintaining consensus throughout the system using the Lachesis protocol.
Opera Ware Layer — This layer would be responsible for providing the functionality for payments, issuing rewards, and incentives.
Opera Application Layer — This layer would be responsible for providing different APIs to this application that wants to make use of the features provided by the Opera Ware Layer.
Development And Launch Roadmap
Fantom has already conducted a very successful ICO with an Ethereum based ERC20 token. When the Fantom platform would be fully developed and publicly launched, these ERC20 tokens would be swapped with the native Coin of the Fantom platform.
As of Q1 2019, the Fantom Foundation has completed the Opera Core Layer development, while its smart contract language and Virtual Machine is in beta. The Mainnet of the Fantom platform would be available by Q3 2019, and the grand expansion would begin in Q2 2020 with global platform expansion, system model expansion, and Fantom council establishment.
Fantom Partners And Investors
To create the world’s first DAG-based Smart Contract platform, the Fantom Foundation is collaborating with well-known organizations from around the world. Partners include blockchain academic researchers, institutional investors, marketing firms, and global engineering teams.
Up until now, the Fantom Foundation has partnered with the following organizations — 8Decimal, Arrington XRP Capital, Bibox, BlackEdge Capital, Block Crafters Capital, Block Tech Capital Corporation, Block VC, BlockWater, ChainRock, Crypto Trade Capital, Future Money, HyperChain, Kunwu Jiuding Capital Holdings, JRR Crypto, Kosmos Capital, Lemniscap, Link VC, MB Technology, Nirvana Capital, One Block Limited, XSQ, an Zorax Capital.
Conclusion
Fantom aims to build a decentralized platform of the future, for billions of people and smart cities. With its innovative approach towards the architecture itself, the protocol and the consensus, Fantom would probably come out as the most powerful and scalable decentralized platform, setting higher standards for the new entrants into this space.
Fantom Virtual Machine on a DAG-based platform (Opera Chain) is the first mover into this space with very high throughput. Fantom Foundation also has a solid team, and they are actively partnering up with relevant organizations and institutional investors.
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