What is Fantom (FTM)?
This year, you may have heard of some popular Ethereum dApps moving onto more scalable layer one platforms, including Fantom.
Some of the decentralized applications that have expanded onto this relatively new blockchain include the SushiSwap DEX; Nansen, a leading blockchain data analytics project; and the stablecoins USDT and USDC.
But what is Fantom, how does FTM coin work, and does the project have what it takes to compete with some of the biggest platforms in the crypto space?
What is Fantom (FTM)?
Launched in 2019 by South Korean blockchain development scientists, Fantom is another 2nd generation smart contract platform that offers high scalability and extremely low fees.
The developers of Fantom claim that smart contract interactions on the network have been reduced to a maximum of 2 seconds waiting time, and this speed makes Fantom a good potential destination for DeFi projects that are being stifled by the Ethereum gas system.
Fantom is an open-source project, meaning that anybody can read the project’s code and suggest changes to it, and the platform uses its own unique consensus mechanism that it calls “Lachesis”.
Lachesis is designed to be an improvement over traditional proof-of-stake models, bringing a “leaderless” design that allows for building and transactions to happen without the need for network confirmation.
This removes some significant barriers to onboarding, which is a key objective of the Fantom team. Deploying a dApp on Fantom is just like doing it on Ethereum, except with only a fraction of the cost.
Fantom is compatible with the Ethereum Virtual Machine, meaning that Ethereum developers who wish to build decentralized applications on Fantom can do so using familiar tools (like Truffle) and coding languages (like Ethereum’s Solidity).
What is the use case of FTM token?
In addition to the native FTM coin, there is an ERC-20 version of FTM, and also a BEP-2 version. All of these tokens can be used in Metamask, giving easy access to the DeFi ecosystems of Fantom, Ethereum, and Binance Smart Chain.
Transactions made with the FTM token take less than 2 seconds to be confirmed and cost less than 1 cent, which is why projects like USDT and USDC have built out onto Fantom.
Fantom’s proof-of-stake network is secured by FTM holders, and there are two ways that they can do this.
Users can choose the stake-as-you-go option, and earn approximately 4% APY (at the time of writing) on their deposit, being able to unstake and get their liquidity back at any time. Or, they can commit to locking up their Fantom tokens for one year, in which case they receive a higher APY of up to 13%.
Each staked FTM token equals one vote on Fantom governance decisions. Voting on Fantom is simple, can be done on-chain, and ensures that the network stays democratic and decentralized.
Those who stake FTM for longer also have the option to keep some liquidity, with sFTM (synthetic Fantom) tokens available to be unlocked and used in the Fantom DeFi ecosystem.
Fantom DeFi ecosystem
Once inside the ecosystem, FTM holders can take advantage of DeFi applications like Beethoven X, an automated liquidity provider and price sensor which helps FTM holders make the best use of their tokens.
Beethoven X leverages the code of Ethereum’s Balancer V2 protocol to provide an easily-accessible investment space that automatically rebalances and reallocates your portfolio, to ensure maximum yield.
Like Beethoven X, many of the dApps built on Fantom have branding and design aesthetics that take inspiration from the ghostly name of the platform:
- Geist is a liquidity protocol that brings undercollateralized lending to Fantom
- SCREAM Finance is a spooky, Fantom-based take on Ethereum’s lending protocol C.R.E.A.M Finance
- SpiritSwap brings yield farming and the Uniswap-style automated market maker model to the Fantom network
These DeFi opportunities and incentives seem to be attracting traders to Fantom, because in October 2021, the project passed 1 million unique addresses on the network.
The future of Fantom and FTM coin
Being Ethereum-compatible is a wise move for any nascent layer 1 blockchain because the project can work alongside the biggest dApp ecosystem in the crypto space, instead of having to compete with it.
Continuing with the idea of interoperability, Fantom has also teamed up with RenVM, meaning that holders of cryptocurrencies like Bitcoin, Zcash, and Dogecoin can port their assets over the “RenBridge” and into the Fantom ecosystem, where they can be used as RenBTC, RenZEC or RenDOGE.
And like with many layer 1 blockchains in the latter half of 2021, Fantom has attracted new users to its ecosystem by offering NFT mints at a fraction of the cost of those on Ethereum.
At the center of this is Artion, Fantom’s dedicated NFT marketplace that operates with 0% commission and rapid confirmation times. Fantom is also keeping one eye on the future courtesy of PaintSwap, an ecosystem that combines NFTs with DeFi to open up new sources of crypto liquidity.
Some of the more popular NFT projects featured on the platform, aside from the inevitable “FantomPunks” project, include Portalheads and Bitumans, which recently saw the highest NFT sale on Fantom so far, with a single unit being sold for 150,000 FTM tokens on the secondary market.
The Fantom blockchain is also hoping to provide a home for central bank digital currencies (CBDCs), so it’s going to be fascinating to see how the community develops over the next few years, and how the Fantom team can harmoniously merge the decentralized and enterprise worlds.
With growing user interest and an important focus on making the user experience as simple and painless as possible, it looks Fantom won’t be fading away anytime soon.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.