About Fantom (FTM)

Blockchain technology has the potential to become the premier network for global solutions in the future. It will span various fields, from finance to healthcare, from art to education, and a suitable layer of scalability will emerge to support human development. To achieve this, we need to create a scalable and efficient blockchain. Fantom may be an excellent solution because it was designed to address the trifecta of scalability, security, and decentralization—barriers many Layer 1 blockchains struggle to overcome.

Fantom was founded in 2018 by computer scientist and SikSin developer Ahn Byung, whose program is widely used in South Korea for rating restaurants. Initially, Ahn Byung served as the CEO of the Fantom Foundation but stepped down in 2019 after Michael Kong, a skilled developer from the Ethereum smart contract community, took over the company. Additionally, Andre Cronje, the founder of Yearn Finance, was a long-term technical advisor to Fantom.

In March 2022, Cronje left the DeFi space. Before his departure, Cronje significantly contributed to Fantom’s development, particularly in advancing its multi-chain work. Shortly after Cronje and his collaborator Anton Nell left the DeFi industry, rumors emerged that they would terminate about 25 of their developed applications and services, including Fantom. This news potentially harmed the Fantom Foundation and its project (and token price) until the Foundation issued a statement clarifying that the rumors were unfounded. The statement indicated that Cronje and Nell did not “terminate” these 25 projects but transferred all development matters to existing teams, many of which had been independently developing and running projects. The statement also confirmed that Fantom’s technical development was proceeding normally.

Fantom (FTM) is a distributed ledger technology (DLT) project, slightly different from typical blockchains. DLT allows for the creation of decentralized databases. Fantom is a permissionless, decentralized, and open-source smart contract platform. It introduces an innovative consensus mechanism that allows different blockchains to coexist asynchronously without slowing down the main network. This consensus mechanism, Lachesis, is technically an aBFT (Asynchronous Byzantine Fault Tolerance). Lachesis enables transactions to be nearly instantaneous and can withstand malicious behavior from up to one-third of network participants. This mechanism makes Fantom faster, cheaper, and more secure than previous technologies.

Additionally, thanks to its modular architecture, Fantom can fully customize blockchains for digital assets, with different features tailored to specific use cases. Fantom is often regarded as an “Ethereum killer” because it addresses Ethereum’s scalability and transaction cost issues. While Ethereum has proven to be a solid and reliable blockchain, Fantom has reached a new level in speed and cost-efficiency.

Fantom’s Operation: OPERA Mainnet and Network Components

As mentioned earlier, Fantom is supported by the Lachesis consensus mechanism, which combines Proof of Stake (PoS) and Directed Acyclic Graph (DAG). DAG is a special structure used for ordering computer data, unlike traditional blockchains that involve consecutive data blocks; instead, it consists of a network of transactions connected in a tree-like structure. Typically, transactions are verified using the “Gossip” algorithm, which involves transmitting consensus information between nodes across the network.

Overall, Lachesis is a system representing the fundamental consensus layer of Fantom, and it can be integrated into any distributed ledger. Lachesis is a crucial factor for the operation of the Fantom OPERA mainnet.

Opera utilizes three components to achieve network functionality:

1. Clotho: A special type of event block.
2. Lachesis: The consensus mechanism.
3. Atropos: A special event block selected by Clotho.

A complex confirmation mechanism verifies transactions within the network, where nodes continuously notify each other. Nodes then transmit blocks received from other nodes and their own blocks to the network, propagating the validated information. Clotho communicates to reach a consensus on the election of Atropos. Ultimately, a series of Atropos blocks, formed along the DAG, constitutes the main chain. This main chain preserves all nodes and serves as a temporal reference.

Fantom’s high scalability makes it particularly well-suited for developing DApps (decentralized applications). Each DApp can utilize customizable Opera sidechains, with no limit on their number. Additionally, Fantom’s smart contracts are fully compatible with Ethereum’s EVM, allowing developers to use the Solidity infrastructure for writing smart contracts. This means that the two ecosystems and their respective tokens are fully compatible.

FTM Token

The FTM token has multiple use cases, including rewarding investors who stake tokens to secure the network. As Fantom operates on a PoS protocol, it requires users to lock up their tokens to prevent malicious actors from executing 51% attacks, submitting malicious proposals, and otherwise attacking the network. Here are its original use cases:

1. Paying Transaction Fees:

• FTM can be used to pay transaction fees on the Fantom chain, allowing users to perform transactions without incurring high additional costs.

1. Participating in DeFi Mining:

• FTM can be used to participate in DeFi mining, such as liquidity mining, where users provide liquidity to earn rewards. This is a key feature within the Fantom ecosystem.

1. Participating in Governance:

• FTM holders can engage in the governance process of Fantom by voting on decisions regarding the future direction of the ecosystem, including project proposals and other decisions.

FTM Tokenomics

FTM is the native token of the Fantom Opera network, with a total supply of 3,175,000,000 FTM. FTM can be used for paying transaction fees, participating in governance voting, and staking to earn rewards. The inflation rate of FTM is approximately 2.5%, adjusted through staking and burning mechanisms. Users holding FTM can earn around 11% annualized returns through staking. The price of FTM fluctuates with market supply and demand, making it a crucial component of the Fantom ecosystem.

S Token

The S token will become Sonic’s native token, and the new token will be introduced with the upgrade of the Fantom public chain. It has several roles within the Sonic network:

• Paying transaction fees
• Staking to participate in securing the chain (minimum 1 $S)
• Running validators to secure the chain (minimum 50,000 $S)
• Participating in governance

S Token Upgraded Functions and Differences:

Differences Between Sonic (S Token) and FTM Token:

1. Inflation Rate:

• The inflation rate of the S token is different from that of the FTM token. The S token controls inflation through a multi-minting mechanism to ensure stability in the token supply.

1. Burn Mechanism:

• The S token introduces a burn mechanism, meaning that some S tokens can be destroyed to reduce the total supply and lower the inflation rate.

1. Ecosystem Development Fund:

• The ecosystem development fund for the S token is more abundant than that of the FTM token, supporting high-quality DeFi projects and ecosystem development.

1. Multi-Minting Cap of 6%:

• The multi-minting cap for the S token is set at 6%, meaning that only 6% of new tokens can be minted each year. This cap controls inflation and maintains token value stability.

1. Compatibility and Migration:

• The S token is 1:1 compatible with and can migrate from the FTM token, allowing users to easily convert their FTM tokens to S tokens while enjoying new features and benefits.

S Token Tokenomics

At Genesis, the supply of 3,175,000,000 $S will equal the total supply of 3,175,000,000 $FTM and can be converted to $S at a 1:1 ratio through a gateway. According to decisions from multiple governance proposals, the following additional elements will be gradually implemented into the $S token economics:

Airdrop

An additional 6% of the $3.175 billion will be minted six months after the Sonic launch. These tokens will be specifically allocated for airdrop projects to reward Opera and Sonic users and developers.

Ongoing Funding

Six months after the launch of Sonic, additional S tokens will be minted for:

• Increasing the adoption and global impact of S
• Expanding the team and operational scale to drive higher adoption
• Implementing strong marketing campaigns and DeFi onboarding activities
• Launching Sonic Spark and Sonic University programs to drive the adoption of Sonic technology and the future of innovation

To fund this plan, an additional 1.5% of $S (47,625,000 tokens) will be minted annually over six years, starting six months after the mainnet launch. To prevent inflation, unused newly minted tokens from the current year will be burned, ensuring that 100% of newly minted tokens in this plan are allocated to network growth rather than held by the treasury for future use.

For example, if only 5,000,000 tokens are used in the first year, the Sonic Foundation will burn the remaining 42,625,000 tokens.

By locking FTM tokens using the staking feature, users can earn sFTM rewards. sFTM can be used as collateral in Fantom’s native DeFi applications. This process is known as liquidity staking, and it is offered by only a few other protocols.

Directly from their wallet, users can access three products on Fantom:

• fMint: By locking FTM at a 5:1 ratio, users can mint a stablecoin pegged to the US dollar, called fUSD.
• fSwap: Users can use the minted fUSD to purchase up to 174 synthetic assets. These assets are collateralized by FTM and are pegged to assets outside the Fantom ecosystem, such as other cryptocurrencies or commodities.
• fLend: fLend functions as a traditional lending market. Users can lend their FTM and fUSD to liquidity pools to earn interest. Additionally, they can use fUSD as collateral to borrow synthetic assets for trading.

Fantom’s second DeFi ecosystem is based on interoperability with Ethereum protocols such as Sushiswap, Curve, and Cream Finance. To facilitate this, Fantom provides the Fantom Bridge for transferring ERC-20 tokens onto the Opera network.

Fantom Ecosystem

The Fantom ecosystem has experienced rapid growth, positioning itself as a leader in DeFi innovation and attracting significant capital.

Source: Fantom Ecosystem

Here are some of the most popular projects currently in the Fantom ecosystem:

• SpookySwap: An automated market maker (AMM) decentralized exchange (DEX) on the Fantom Opera network. Users can swap various tokens on the Fantom network with very low fees, earning fees by providing liquidity to the pools used for swaps or by staking liquidity to earn BOO, the project’s governance token.
• SpiritSwap: Another decentralized exchange (DEX) on the Fantom Opera network, based on the Uniswap constant product AMM model. Users can easily swap tokens at a break-even rate, use lending services, buy bonds, and earn LP (liquidity provider) tokens. SpiritSwap’s main token is SPIRIT, which serves as the protocol’s governance token and is used for rewards in yield farming.
• Scream: A highly scalable decentralized lending protocol supported by Fantom. Users can borrow and lend tokens on this platform with low fees. Additional currency markets have recently been introduced, including stablecoins like USDC and DAI. SCREAM is the native token of the protocol, used to incentivize lending activities and explore future development opportunities within the SCREAM ecosystem.
• Tomb Finance: The first algorithmic token ecosystem on Fantom pegged to the FTM token. The pegging system operates based on a minting tax mechanism, issuing more coins when prices rise and buying back coins from the market when prices fall. The project aims to make TOMB a primary medium of exchange on the Fantom network by providing liquidity assets to participants in the expanding DeFi ecosystem.

Any protocol on Fantom that meets specific requirements can participate in incentive programs directly promoted by the Fantom Foundation. This aims to ensure linear growth of the ecosystem and enhance the security and quality of projects.

fWallet

fWallet is a new wallet in the Fantom ecosystem designed to provide users with a more intuitive and convenient asset management experience. The wallet, developed based on user feedback, features an updated interface and several new functionalities. fWallet supports staking, allowing users to increase their staked FTM amount, extend the locking period, and partially unlock staked FTM for greater flexibility. Additionally, fWallet integrates cross-chain bridging functionality, enabling users to transfer assets between Fantom and other compatible chains easily. The built-in exchange feature utilizes the DEX aggregator OpenOcean to ensure users get the best prices when swapping tokens and provides price charts to help users make informed trading decisions.

WalletConnect v2

WalletConnect v2, a key technology in the Web3 ecosystem, provides secure connections between decentralized applications (DApps) and wallets. It introduces multi-session support, allowing users to use the same wallet across multiple DApps and seamlessly switch between devices. It also supports custom signatures and complex interactions across multiple chains, making it an ideal bridge for user interactions with DApps and promoting the development of decentralized finance and other Web3 applications. Additionally, fWallet has integrated WalletConnect v2, enhancing users’ ability to manage software wallet private keys and recovery phrases, and has incorporated the Fantom Name Service to improve user experience and application functionality further.

Fantom Sonic

On October 25, 2023, the Fantom Foundation announced the launch of its latest technological upgrade, Fantom Sonic, aimed at enhancing the network’s scalability and performance. The upgrade includes a new virtual machine, improved data storage, and optimized consensus mechanisms.

The Sonic upgrade replaces the previous Fantom Opera network and introduces several key technical improvements, with the core being the optimized Lachesis consensus mechanism. This asynchronous Byzantine Fault Tolerance (aBFT) mechanism allows for 2,000 transactions per second (TPS) while reducing transaction finality time to 1 second, a speed far exceeding Ethereum and Bitcoin’s confirmation times.

The Sonic upgrade also introduces a new virtual machine (FVM), making Fantom’s smart contracts fully compatible with the Ethereum Virtual Machine (EVM). Developers can seamlessly migrate existing contracts to the new platform without modification. Additionally, the upgrade optimizes data storage needs, reducing validator node data from 2,000GB to 300GB and archival node data from over 11TB to below 1TB. This not only improves operational efficiency but also lowers operational costs.

To complement the Sonic upgrade, the Fantom Foundation has launched a reward program for the MEME track, offering a prize pool of 10 million FTM to encourage community engagement and activity. These measures demonstrate Fantom’s commitment to improving network performance while fostering ecosystem diversity and user participation. With the official launch of Sonic, Fantom aims to stand out in the competitive public blockchain space and attract more developers and users to its ecosystem.

Fantom Sonic Migration

Fantom Sonic is a decentralized exchange on the Fantom Opera network that is currently undergoing a token migration. The native token of Sonic, SONIC, will be migrated from the Fantom Opera network to the Fantom Avalanche network. This migration aims to enhance the efficiency and security of Sonic and to achieve better integration with the Avalanche ecosystem.

During the migration process, SONIC holders must transfer their tokens from the Fantom Opera network to the Fantom Avalanche network. This can be done through the Fantom Bridge or the Sonic official website. After the migration, SONIC holders will receive an equivalent amount of new SONIC tokens, which can be used on the Fantom Avalanche network. This migration is part of the Fantom ecosystem’s development towards a more efficient and secure direction. The move will increase Sonic’s competitiveness and provide users with a better trading experience. Upon completion of the migration, Fantom Sonic will continue to offer decentralized trading services on the Fantom Avalanche network.

Is FTM a reliable investment?

Many people consider Fantom to be a highly innovative project. Given the significant potential for innovation demonstrated by the Fantom Foundation so far, the ecosystem around Fantom is worth observing and studying. There are many projects related to Fantom that have the ability to execute transactions quickly at very low costs and are compatible with EVM, which is crucial for attracting new capital to decentralized finance.

However, there are some issues to consider. Primarily, the number of validators on the Fantom network is very small, which may lead to centralization of the network. Additionally, the requirements to become a validator are very high: one needs to stake a large amount of tokens, and the nodes require substantial hardware capabilities. In reality, the number of validator nodes is very limited, which introduces some potential structural risks for Fantom.

One possible solution to this issue might be to attract new stakeholders by offering additional incentives. However, everything must align with the project’s healthy development. As we know, the more reliable a protocol demonstrates itself to be, and the more use cases it has, the higher the engagement from users and investors.

How to Own FTM？

One way is to hold FTM through centralized cryptocurrency exchanges. To hold FTM on Gate.io, you first need to create a Gate.io account and complete identity verification. Then, deposit funds into your account. Finally, you can buy and hold FTM by following the steps to purchase FTM on either the spot or derivatives market.

Key Points Related to Fantom

An article published by the Fantom Foundation’s official blog on October 7, 2022, revealed that Unstoppable Domains has integrated Fantom into its services. Users can now purchase a domain name to use as a universal Web3 address, rather than using a 42-character wallet address.

Unstoppable Domains, based in San Francisco, allows users to create blockchain-connected URLs similar to traditional web URLs. In essence, this means converting cryptocurrency wallet addresses into simpler, more readable names associated with decentralized applications (dApps) and exchanges.

This integration also enables Fantom users to purchase a domain name as a username, cryptocurrency address for FTM or other Fantom tokens, and more.

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