- Fantom is a blockchain network that supports the use of smart contracts to build various Dapps and digital assets. It aims to provide fast and secure transaction processing for its users.
- Fantom uses the proof-of-stake (PoS) consensus algorithm in which network participants, also known as validators, are chosen based on the amount of FTM they hold and are willing to stake to verify transactions and create new blocks.
- FTM is the native token of the Fantom network, and the blockchain network uses the FTM crypto as a means of payment, staking, and exchange within the network.
- Fantom’s Q3 performance has taken a severe hit. In July 2023, Multichain’s Fantom bridge suffered a hack. This resulted in the loss of $126 million worth of crypto on its Fantom bridge, which led to the coin experiencing several declines between July and September of 2023.
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Fantom is a blockchain network that supports the use of smart contracts to build various Dapps (decentralised applications) and digital assets.
It is a blockchain network that is highly scalable. Fantom is said to be a very good rival to Ethereum, which is a very popular network that supports the use of smart contracts to build various applications within its ecosystem.
The Fantom platform is designed to provide fast and secure transactions at a low cost, making it an attractive option for businesses and individuals who need to move value quickly and efficiently.
FTM is the native cryptocurrency of the Fantom platform, and it is used to facilitate transactions and pay network fees.
What is Fantom?
Fantom is a blockchain network that aims to provide fast and secure transaction processing for its users.
It uses a unique consensus algorithm called Lachesis. This enables deterministic finality, allowing transactions to become irreversibly finalised as soon as two-thirds of the network has seen them, taking just under a second on average.
Fantom also implements asynchronous transaction processing, blockchain data pruning, and deflationary mechanisms to improve scalability and reduce the demand for network resources.
This blockchain network uses a proof-of-stake (PoS) consensus algorithm in which network participants, also known as validators, are chosen based on the amount of FTM they hold and are willing to stake to verify transactions and create new blocks.
In addition, Fantom burns 100% of transaction fees and distributes rewards to validators through the Special Fee Contract (SFC), which also supports ecosystem development projects.
Moreover, the Lachesis-based aBFT consensus mechanism used by Fantom, allows this blockchain network to achieve high transaction throughput and low latency.
With this consensus mechanism, Fantom is said to be able to process up to 300,000 transactions per second, making it one of the fastest blockchain platforms currently available.
Additionally, the platform is designed to be interoperable with other blockchain networks, allowing for seamless integration with existing systems.
Who is Behind Fantom?
The Fantom network and its native cryptocurrency FTM were created by the Fantom Foundation, which is a non-profit organisation based in Singapore.
The project was initially founded by Dr. Ahn Byung Ik in 2018. It was developed to address the security and scalability problems pre-existing blockchain platforms like Bitcoin and Ethereum had.
The project aimed to provide fast and secure transaction processing for users, with a focus on businesses and individuals who need to move value quickly and efficiently.
How Does Fantom Work?
Fantom is a blockchain network that achieves fast and secure transaction processing through several key features and mechanisms.
One of the primary ways that Fantom achieves speed and security is through its use of deterministic finality.
Bitcoin and Ethereum rely on probabilistic finality and require several minutes for transactions to become irreversible. However, Fantom’s Lachesis consensus algorithm allows transactions to irreversibly finalise as soon as two-thirds of the network has seen the transaction, which occurs in just under a second on average.
In addition to deterministic finality, Fantom also uses asynchronous transaction processing. This allows the network to simultaneously process transactions received at different times.
This feature enhances the scalability and overall speed of the network, allowing it to maintain its speed even during periods of high network congestion.
The Fantom Crypto network also addresses the issue of data bloat through its unique data structure implementation. This enables nodes to securely and accurately verify transactions without having to store the entire blockchain.
This then reduces the demand for resources for nodes, resulting in faster throughput and better user experience.
Finally, Fantom implements deflationary mechanisms by burning 100% of transaction fees, with the Special Fee Contract (SFC) responsible for maintaining lists of validators and distributing rewards.
The SFC contract uses the data about the amount of FTM Crypto burned to mint 70% of burned fees and add them to validator rewards, with the remaining 30% of FTM coins being burned in a transparent process.
Moving forward as of 2022, 10% of this 30% is being distributed to the Ecosystem Support Vault and 15% to the Gas Monetisation Program.
To make this simple for you to understand, in summary, Fantom achieves fast and secure transaction processing through deterministic finality, asynchronous transaction processing, blockchain data pruning, and deflationary mechanisms involving the burning of transaction fees.
What is FTM?
Being the native cryptocurrency of the Fantom platform, FTM is used to facilitate transactions and pay network fees.
This blockchain network uses the FTM crypto as a means of payment, staking, and exchange within the network.
- The maximum supply of FTM is 3.175 billion, and it consists of smaller units called Atto.
- The issuance rate of FTM is approximately 4.5% per year and at the time of the writing of this article, its circulating supply is 2.7 billion with a max supply of 3.1 billion FTM coins.
Burning Transaction Fees
Transaction fees in the Fantom network are burned, which means they are removed from circulation.
As the network grows and transaction fees increase, the amount of FTM being burned will also increase, which can result in a deflationary effect.
FTM has the following use cases:
FTM is used for staking by node operators to secure the Fantom network and process transactions.
Users have to pay their transaction fees on the Fantom platform with FTM, and the price of storage and computation on the platform is calculated and paid in FTM coin.
2.Exchange and Payment
FTM can also be used as a unit of exchange for settling transactions between different applications on its platform. Dapps can offer functionalities and services on the Fantom platform and receive payment in FTM as a means of exchange for those services.
Validators on the Fantom network receive newly issued FTM tokens as rewards for validating transactions.
Node operators on the Fantom network are also rewarded with FTM for validating transactions and securing the network.
Note: To be a validator on the FTM blockchain, each validator is required to stake a minimum of 1,000,000 FTM.
FTM Gaining More Popularity?
Fantom’s Q3 performance has taken a severe hit, mainly because of the Multichain hack in July, which led to the coin experiencing some declines between July and September of 2023.
In July 2023, Multichain’s Fantom bridge suffered a hack. This resulted in the loss of $126 million worth of crypto on its Fantom bridge, which was reflected in its network’s performance in Q3.
- FTM experienced a large selloff in mid-August, resulting in a 15% decline in the altcoin’s value in August, and a 35% fall in its circulating market capitalisation.
- A quarter-over-quarter assessment of Fantom’s network activity revealed a slight decline in usage in Q3.
Even if the first half of the quarter witnessed a fall in the transactions count on the protocol, its daily count of addresses trended upward in September – which led to a 106% QoQ increase in daily new addresses on Fantom.
However, after the initial revenue rally, it has been reported that quarterly revenues decreased in the second half of Q3 to close the three-month period at $700,000.
This represented a 32% decline from the $1 million recorded in protocol revenue in Q2.
Fantom forecast estimates that the token has the potential to end at $0.70 by the end of the year.
An alternate level of $0.30 will establish a sense of confidence among both buyers and holders.
Last but not least, the recent introduction of Fantom Sonic Upgrade, which incorporates FVM (Fantom Sonic Virtual Machine) supports the token’s growth and potential for a prosperous future.
Where to Buy FTM?
Currently, the FTM token is listed on the BitDelta spot market as a USDT pair with the trading ticker FTM/USDT.
BitDelta users can buy FTM directly from the spot market by trading or depositing crypto into their wallets. Alternatively, they can also use the platform’s crypto converter feature to convert existing crypto balances to FTM tokens.
This article is for informational purposes only and not intended as investment or financial advice. It contains opinions and speculations that are subject to change without notice. The author and publisher disclaim any liability for decisions made based on the content of this article. Readers are advised to conduct their own research and consult a financial advisor before making investment decisions.