What is Phantasma (Soul)?

Introduction

Phantasma is a Layer 1 blockchain protocol designed to facilitate the deployment of decentralized applications (dApps) without unnecessary complexity. The network offers a foundational platform for dApps, allowing for interaction between side chains while mitigating the risk of network disruption from individual applications. This architectural approach emphasizes autonomy for developers, enabling their dApps to function independently within the Phantasma ecosystem.

Distinguished by its efficient transaction validation capacity, Phantasma handles substantial volumes with notable proficiency. Its support for commonly used programming languages like C#, Java, Solidity, and Python provides developers with a familiar environment for creating applications spanning communication, entertainment, marketplace transactions, and storage solutions.

Phantasma has gained traction in NFT and gaming circles. Its adaptability has resonated with users seeking solutions for blockchain interoperability in these evolving sectors. As the blockchain landscape evolves, Phantasma represents a pragmatic option in the array of available protocols, demonstrating its relevance within the dynamic crypto ecosystem.

Phantasma was founded by Sergio Flores, also known by his pseudonym “CityOfZion”. Sergio is a well-regarded figure in the blockchain community, particularly known for his contributions to the NEO ecosystem before entering the Phantasma project.

What is Phantasma?

Phantasma is a Layer 1 blockchain designed to serve as the infrastructure for decentralized applications (dApps). Unlike traditional blockchains, Phantasma is tailored for simplicity, aiming to provide a user-friendly platform for developers to build and deploy dApps.

A blockchain is a distributed ledger that records transactions across a network of computers. What sets Phantasma apart is its emphasis on seamless integration, scalability, and independence for each decentralized application within its ecosystem. The architecture revolves around deploying infinite side chains, high transactions per second (TPS) capacity, and inter-chain technology to facilitate connectivity between chains.

Infinite Side Chains Deployment

Phantasma Chain has a concept of infinite side chain deployment. This innovation allows every dApp on the Phantasma Chain to operate on its dedicated side chain, ensuring independence from other applications. This design minimizes the risk of network disruptions caused by a single dApp, providing a robust, safer, and resilient ecosystem.

The chain presents impressive scalability, with a notable capacity to validate 10,000 transactions per block, extending not only to the main chain but to every individual side chain. The cumulative effect allows each side chain to achieve the same maximum TPS independently, contributing to an overall network capacity calculated by combining the main chain and all side chains.

Side Chain Security Sharing

Phantasma’s architecture is achieved through a mechanism where the security and consensus of the main chain extend to the side chains, creating a unified security model. Each side chain, while operating independently in terms of functionality and processing transactions, relies on the main chain for its consensus validation.

This means that the main chain validators also secure the side chains, ensuring that the security level of the entire network is consistent and not diluted by the addition of side chains.

Phantasma incorporates cryptographic techniques and inter-chain communication protocols to maintain this security model. Side chains periodically commit their state to the main chain, which acts as a checkpointing mechanism. This process ensures that even if a side chain is compromised, the network can revert to a known good state, minimizing the impact of any security breach.

Phantasma’s Inter-Chain Technology for Seamless Connectivity

Phantasma Chain incorporates advanced inter-chain technology, fostering seamless connectivity between different chains, a feature that empowers developers to build dApps that transcend individual chains and make gas fees cheaper.

The network supports programming languages such as C#, Java, Solidity, and Python, and plans to include additional ones in the future.

Ecological Development of Phantasma (SOUL)

Phantasma has focused on building a solid foundation for ecological development, emphasizing scalability, developer friendliness, and a rich feature set. The platform has seen many decentralized applications (dApps) leveraging its unique capabilities, such as infinite side chains and smart NFTs.

Phantasma has reported increasing transaction volumes and active users, indicating a healthy and growing ecosystem. The platform’s emphasis on ease of use and low transaction fees has attracted developers and users alike, contributing to its organic growth.

The Phantasma team has also proactively partnered with gaming studios, NFT creators, and other blockchain projects, further expanding its ecosystem and utility.

To support its ecological development, Phantasma has implemented various incentive programs, including grants for developers and rewards for community contributions. These programs aim to foster innovation and engagement within the ecosystem, ensuring its long-term vitality and relevance.

What is the SOUL token?

A strong part of Phantasma’s decentralized ecosystem is its governance token, fittingly named “SOUL.” It plays an important role in governing the Phantasma Chain, by offering users and developers the ability to utilize network resources.

Beyond its functional aspects, SOUL operates as well as a decentralized governance tool, allowing users to participate in on-chain voting mechanisms and crucial governance events.

Maximum Supply and Inflation Mechanism for Soul

According to the Phantasma Chain’s white paper, in the beginning they issued a controlled supply model for SOUL, with an initial maximum supply capped at 94,000,000 tokens. To sustain long-term improvements to the ecosystem, a carefully crafted inflation mechanism was implemented, with the yearly inflation rate set at 3%, as well as a monthly distribution of 125,000 SOUL to eligible Soul Masters. This inflation mechanism is designed to strike a balance, ensuring sustained incentivization for developers and network validators.

The inflationary rewards are then allocated to key contributors within the Phantasma ecosystem. The Block Producers, responsible for validating network transactions, receive 1% of the inflation, while the Phantom Force (developer community) and various ecosystem incentives each receive another 1%. This allocation model ensures a fair distribution of incentives across vital components of the Phantasma Chain, fostering a healthy and dynamic ecosystem.

Incentivization for Developers

Phantasma recognizes the importance of incentivizing developers to contribute to the ecosystem consistently. Within the inflation model, there is a mechanism to attract and retain talented developers, fostering an engaged, sustainable community. This approach rewards contributors and maintains the high-quality standards required for network development, ensuring long-term growth.

Funding for Phantom Force Foundation

The Phantom Force Foundation, a decentralized team driving Phantasma’s development, receives a steady stream of funding through the monthly release of SOUL tokens generated by the annual inflation, replacing the traditional model of lump-sum funding, allowing for more decentralized decision-making throughout the year.

This means that the foundation is able to allocate resources and support ongoing projects, contributing to the network’s evolution as a whole.

Dual Token System (Staking)

Phantasma uses a Dual Token System to streamline transactions and enhance user experience. At the core of this system is Phantasma Energy, denoted as KCAL. KCAL serves as the network resource token, essential for transaction fees within the Phantasma Chain, aiming to simplify transactions by introducing a secondary token that complements the governance token, SOUL.

Users can actively participate in the Phantasma ecosystem by staking their SOUL tokens, earning Phantasma Energy (KCAL) as a reward. This integration allows users to engage with the blockchain more easily, and initiate transactions without needing to pay fees directly in SOUL. The staking mechanism ensures a steady supply of KCAL, making the platform more accessible and user-friendly.

Soul Masters and Additional Rewards

A significant incentive within the staking ecosystem is the recognition bestowed upon Soul Masters. Users staking a minimum of 50,000 SOUL qualify for the Soul Master title, unlocking additional rewards from a monthly pool of 125,000 SOUL. This encourages higher levels of participation and acknowledges and rewards users who contribute significantly to the network’s staking infrastructure.

One such example is the CROWN NFT Rewards for Continuous Staking, a reward system for dedicated stakers in the form of CROWN NFTs. Soul Masters staking at least 50,000 SOUL continuously are eligible to receive a CROWN NFT every 90 days, starting from Phantasma’s Genesis block.

These exclusive NFTs contain a portion of the ecosystem’s total KCAL fees for the last 90 days, along with a share of the ecosystem incentive allocation. This reward structure further motivates users to engage actively with the staking mechanism, promoting long-term commitment to the protocol as a whole.

Consensus Mechanism (Block Producers)

Phantasma Chain adopts a unique variant of Proof-of-Stake (PoS), requiring users to hold a stake in the network to become validators, also known as block producers. This consensus mechanism ensures that participants actively contribute to the network’s security and validation processes.

In this protocol, a dual-tiered system is applied for block producers: Active and Standby. Active Block Producers receive substantial rewards, including 75% of the governance token (SOUL) inflation, as well as a minimum of 25% of transaction fees for the blocks they validate. Standby Block Producers, while not actively validating, receive 25% of the daily SOUL inflation.

The platform also made plans for a growth strategy, involving a gradual increase in the number of block producers over time. The network begins with 10 active Block Producers and 15 standby Block Producers, with an annual addition of 3 new producers. This scalable approach ensures the network’s adaptability to increased demand and transaction volumes.

On-Chain Governance System

Phantasma’s approach to on-chain governance eliminates the need for forks and addresses common drawbacks observed in other blockchain systems during updates. It allows for parameters to be editable on-chain, ensuring the network’s adaptability and responsiveness to requirements.

On-chain polls operate in three distinct modes, each tailored to specific governance needs:

• Unanimity: All voters must agree on the same result for consensus.
• Majority: Consensus is reached if most voters agree on the same result.
• Popularity: The option with the highest number of votes prevails unless the top two options receive equal votes. The choice of poll mode is predefined, depending on the update requirements.

Phantasma’s Goal for Decentralized Apps

Phantasma aligns itself with the vision of fostering decentralized applications (dApps) by offering a robust storage solution. This commitment arises from the platform’s goal to provide a secure, scalable, and censorship-resistant environment for a diverse range of applications.

There are some critical challenges to be observed, though, including single points of failure, vulnerability to censorship, and concerns regarding data privacy.

Oracles

The blockchain introduced a robust Oracle system, enhancing the platform’s smart contract capabilities and blockchain interoperability. It provides real-world data to the blockchain, enabling smart contracts to execute based on external information, thus expanding the scope of decentralized applications (dApps) within the Phantasma ecosystem.

Blockchain Interoperability, Price and NFTs

The Oracle ecosystem comprises three distinct types, each tailored to specific functionalities:

• Blockchain Interoperability Oracles: facilitate communication between different blockchains, contributing to interoperability in the decentralized landscape.
• Price Oracles: Addressing the need for accurate and timely pricing information, these oracles are crucial in supporting financial applications within the Phantasma network.
• NFT Oracles: Specifically designed for Non-Fungible Tokens (NFTs), these oracles enhance the dynamic nature of NFTs on the blockchain, allowing for adaptive changes based on predefined conditions.

The organization also places a strong emphasis on the integration of next-generation oracles, ensuring scalability, security, and real-time data accuracy. By adopting cutting-edge solutions, the platform enhances the reliability of smart contracts, fostering an ecosystem where users can trust the data-driven functionalities.

Non-Fungible Tokens (NFTs)

Phantasma has the Smart NFTs, which are dynamic, programmable assets that redefine the possibilities of tokenization within the decentralized ecosystem, by using multilayered NFTs, allowing for intricate designs and functionalities within a single token, which enhances the creative potential for artists and developers.

The on-demand minting capabilities that the platform offers provide flexibility in creating and deploying NFTs based on real-time demand. This feature streamlines the NFT creation process, catering to the dynamic nature of the digital asset landscape.

Phantasma Smart NFTs also support the infusion of multiple assets, including diverse digital content, creating tokens that encapsulate a rich blend of multimedia, interactive elements, and programmable features.

NFT Marketplace and Support for NFTs

Phantasma hosts an NFT marketplace within its ecosystem, offering a dedicated space for creators and collectors to exchange digital assets. Beyond the realm of digital art and collectibles, the platform also explores possibilities where NFTs represent ownership or access rights to physical assets, bridging the gap between the digital and tangible worlds.

Conclusion

Phantasma offers a suite of innovative features that collectively redefine the landscape of decentralized applications. From its dual-token system, staking mechanisms, and infinite side chain deployment to the technology and the ability of interchain communication.

Despite being seen by the market as a small blockchain, Phantasma has been gaining a lot of traction and becoming more well-known in NFT and on-chain gaming, because of its different approaches to service.