Ethereum is currently one of the most popular blockchains, mainly for smart contracts and dApps. However, the network is plagued by its own set of issues. Ethereum is notorious for its high gas fees, particularly when the network is congested. At such times, the payment cost itself can cross the value of the transaction. Many alternatives to Ethereum such as the BNB Chain and Solana exist. But Fantom, another Layer-1 blockchain, is quickly gaining popularity. So what is it and why is Fantom sought-after?
What Is FTM?
Fantom is a permissionless and decentralised blockchain for smart contracts. Like other alternatives to Ethereum, it is trying to offer decentralised application and digital asset functionality on a more efficient and cost-effective network.
The network is unique because of its ability to deploy separate blockchains rather than have all applications built on the main Fantom blockchain. This allows developers the modularity of having an independent blockchain while enjoying the security and speed of the main Fantom blockchain.
How Does Fantom Work?
Fantom has two main components – the mainnet ‘Opera’ and its network of blockchains. With these two features, Fantom hopes to solve the blockchain “trilemma” or tradeoff between security, decentralisation and scalability.
What is Fantom Network?
The Fantom network consists of the main blockchain, independent blockchains deployed by developers and their shared features. The entire network is secured through a Proof of Stake consensus mechanism called “Lachesis”.
Lachesis operates using a “Byzantine Fault Tolerant” mechanism. This ensures the network does not need all nodes to be in agreement to operate. As many as one-third of the nodes can fail to respond or respond with faulty information without operations being disrupted. It also enables the network to operate asynchronously, meaning data can be processed at different times on different nodes.
Independent nodes can communicate with each other to share data on transactions, but they do not need to finalise blocks. This results in a system which can process transactions in seconds, without lengthy confirmation times.
What is Fantom Opera
As mentioned above, Opera is the Fantom mainnet. It is a deployment platform for dApps on the network and provides an open environment to developers. Opera is also integrated with the Ethereum Virtual Machine and supports all of Ethereum’s smart contract features.
The team is also working on a “Fantom Virtual Machine”. This is a software development kit that allows developers to create applications for Fantom natively. With this, they wish to draw developers away from the Ethereum network onto their own platform.
Every independent blockchain is modular, with features like tokenomics and governance of the application under the control of its developers. However, they still have access to the same Lachesis system that ensures all blockchains on the network are fast and secure.
How To Stake Fantom?
Fantom’s native token is known as FTM. These can be staked by users to earn lucrative rewards. To get started, you must simply acquire 1 FTM. FTM can be acquired as an ERC-20, BEP-2 or even native token.
Moving your digital assets to a crypto wallet that supports Fantom converts them into FTM coins on the Opera network. If you also want to operate a node on the network, you must stake at least 3,125,000 FTM tokens. At the current price of $0.18, this is worth $562,500, which is out of the reach of most individuals.
Staking rewards also depend on how long you commit to locking in your coins. Staking will result in an APY of 4%, while locking it in for a year can give you returns as high as 12%.
What is Fantom Coin Used For?
- Governance – Holders of FTM tokens are also eligible to participate in the governance of the network. This means voting on key issues such as network fees, software updates and staking rewards.
- Staking – As mentioned above, you can stake your tokens to help secure the network and earn more tokens. This can be a lucrative side investment for users, especially if you have many tokens staked.
- Fees – The Fantom network must pay its stakers and validators to continue operating. Making transactions on the blockchain also requires the payment of these fees in FTM tokens.
- Payments – Like other cryptos, FTM tokens can also be used for payments and transactions. They can be transferred from one wallet to another just like Bitcoin.
Fantom Coin Future
The creation of the Fantom Virtual Machine will allow Fantom to truly differentiate itself from Ethereum and stand on its own two feet. Independent development kits are a massive bonus for any platform as it simplifies and streamlines the creation of applications on it.
While alternative L1 blockchains like Solana, Fantom and BNB are creating more features for themselves, so too is Ethereum evolving. It has just completed its long-awaited “Merge” with many more upgrades on the way. Phantom’s survival in the long run also depends on its ability to continue adding features and growing faster than Ethereum.
Read more: What is the Ethereum Merge
Fantom works to bring the “internet of blockchains” ever closer. Its unique solutions and implementation can cement it as a key player in the future of the crypto industry. However, it needs to adapt to the market. Other key L1 blockchains boast much higher user bases and market caps than Fantom. Fantom must edge out these competitors to maintain relevance in an Ethereum-dominant landscape.
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Is Fantom A Good Crypto?
Fantom is a technically sound crypto project. It implements advanced security features that enable fast transactions and confirmation on the platform. This solves one of Ethereum’s worst congestion issues and shows it is a good crypto project.
Does Fantom Crypto Have a Future?
Fantom certainly has a future as long as innovation continues. This will ensure its relevance in the coming years of the crypto market.
The Fantom ecosystem consists of independent blockchains spun off from Fantom, the mainnet Opera and the Lachesis consensus mechanism. All these features are also powered by the FTM crypto token.