What is FTM (Fantom)? How Does FTM Work?

Fantom (FTM), one of the leading names in the Decentralized Finance Defi industry, provides a fast and cheap alternative to cryptocurrency giants including Bitcoin and Ethereum. Like some other popular crypto projects, Fantom is launched to solve the scalability issues of bigger blockchain platforms.

In order to solve the scalability problem, Fantom’s developers have used the DAG (Directed Acyclic Graph) technology for its system. Thus, it processes transactions faster than other blockchain platforms.

Fantom isn’t just a transaction processing network but it also hosts smart contracts like Ethereum, Binance Smart Chain (BSC), Cardano, Solana, and Algorand.

Compatibility with Ethereum

Ethereum is the leading platform in the league of smart contract platforms. Fantom uses Solidity programming language for smart contract development because it’s used on Ethereum’s platform. Furthermore, Fantom Network is compatible with Ethereum Virtual Machine.

Thus, the users won’t face any problem migrating their Dapps from Ethereum to Fantom. Fantom has developed an easy-to-understand modular architecture to facilitate migration. Sushiswap, Aave, Curve, Popsicle Finance, and yearn.finance are the popular Ethereum Dapps that are already supporting Fantom because of the lower gas fees.

What Makes Fantom Different?

Fast and Cheap Transactions

The faster and cheaper transaction capability is one of the leading aspects that make Fantom prominent among others. For example, an average transaction costs around $0.0000001 on Fantom’s network, and the transaction is processed within a second.

On the contrary, Ethereum’s network charges around $3 for an average transaction and it takes around 15 seconds to 5 minutes to complete the transaction. The transaction times and fees are significantly increased when the network is congested.

And Bitcoin’s transaction speed is even lower than Ethereum’s. In this situation, Fantom proves to be a better alternative to these expensive options.

Rapidly Growing Defi System

Fantom is getting quite popular in the Decentralized Finance industry due to its low fee and fast transaction speed. More than $7.2 billion worth of FTM coins are locked by the users for staking, farming, and liquidity pools. Whereas only $370,000 worth of FTM coins were locked in April 2021.

According to a recent update, Sushiswap (Ethereum-based decentralized exchange) has also been launched on Fantom’s network.

A Centralized Exchange

Although the exchange is not yet launched, the company has announced they’re working on it. It will make it easier for users to trade within a familiar UI. The Fantom team is also going to introduce FTM pairs for all Fantom-based tokens due to which the demand for FTM will significantly increase.

Furthermore, they’re planning to provide a more convenient trading experience through their high-frequency trading bots. The exchange is being developed on the Binance Cloud and it’s going to host a number of cryptocurrencies including:

  • Spooky Swap (BOO)
  • MIM
  • 1Art
  • Tomb, Tshare, Tbond
  • Yoshi
  • Ice
  • Spiritswap
  • Spell

How Does Fantom Work?

Unlike Bitcoin and Ethereum, Fantom uses the Proof-of-Stake protocol. Thus, it offers security and reliability with a very low transaction fee. Scalability, Modularity, Security, and Open-source nature are the four important principles of Fantom that are handled by the Asynchronous Byzantine Fault Tolerance (aBFT) consensus protocol.

This protocol ensures scalability and decentralization while taking care of the malicious actors who may want to interrupt the network. The decentralization enables users to transfer money to anyone without any restrictions. But it also increases the risk of people manipulating the system.

Fantom’s mainnet blockchain platform is called “Opera”. It’s powered by Lachesis, Fantom’s Proof-of-Stake protocol. Opera supports smart contracts in Solidity making it easier for developers to migrate from Ethereum to Fantom.

Lachesis is a little different from traditional Proof-of-Stake Protocols as it eliminates the need for waiting for blockchain confirmations. Similarly, it’s an asynchronous protocol which means the transaction is processed even if ⅓ nodes don’t reach the agreement.

Most Importantly, it’s a leaderless protocol that reduces the risk of DDoS attacks allowing users to transfer funds safely.

Use Cases of FTM

FTM is the native token of Fantom used for transactions on this platform. It currently has a circulating supply of $2.545 billion with a market cap of $3.4 billion. The platform has a maximum supply of $3.175 billion that will be released over time. The users can earn these tokens by performing several duties on the platform.

Staking

Staking is one of the best ways to generate passive income through Fantom. The users just need to lock their FTM tokens in a specified wallet to participate in transaction processing. And whenever a transaction is processed, they receive a reward based on the amount of FTM tokens they’ve staked.

Governance

The users can also give votes about the future growth of the project. The voting power is determined based on the amount of FTM tokens the users are holding.

Fees

The FTM token is also used for paying the transaction fee, smart contract fee, and other fees that are required for different operations. According to an Updated, more than 750,000 transactions are processed on the FTM network. Similarly, around 30,000+ smart contracts are deployed on this network so far.

Payment

As we’ve mentioned, Fantom is playing a leading role in the decentralized finance industry. So, more than 100+ Dapps are built on this network. The users can use the FTM token while making payments on these Dapps.

Conclusion

Fantom is a blockchain-based network where users can process transactions quickly and safely. This network also enables users to launch smart contracts and Dapps. It uses Solidity programming language to provide a similar experience to users who already have their Dapps on Ethereum. Feel free to get in touch with us if you need more information about how Fantom works.

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