Ethereum is the second-largest cryptocurrency by market cap. It also holds the lion’s share of decentralised projects, with over 200 DeFi and NFT platforms operating on the network. However, Ethereum also has some glaring issues with scalability, transaction speeds, and transaction fees.
Over the last couple of years, several blockchains have emerged that offer everything Ethereum does whilst also solving the issues associated with the network. One of these up-and-coming blockchains is the Fantom network.
What is Fantom?
The Fantom Network was created as part of the Fantom Foundation in 2018 by South Korean computer scientist Ahn Byung Ik. It was created to be a secure and scalable smart-contract platform for developing Decentralised Finance (DeFi) Applications. It aims to fill the gaps of smart-contract platforms like Ethereum by addressing issues like scalability, decentralisation, and the speed of transactions.
The Fantom mainnet, called Opera, was launched in December of 2019, making it a reasonably young blockchain. Opera is a permissionless, open-sourced platform where anyone could participate in staking and governance of the network.
FTM is the native token of the network. It is used for staking, on-chain governance, and platform fees within the network. It utilises a unique combination of the Proof-of-Stake and Asynchronous Byzantine Fault Tolerance (aBFT) consensus mechanism, also known as the Lachesis consensus mechanism.
According to the Fantom Foundation, the Lachesis consensus mechanism is faster and cheaper than other blockchain technology, and it also provides a highly secure environment.
What makes Fantom unique?
Many first and second-generation blockchains like Bitcoin and Ethereum were not designed for scalability. They only prioritised security and decentralisation. This resulted in slower transaction speeds in the network, especially when new nodes were introduced. For instance, a transaction on the Bitcoin blockchain network could take up to 15 minutes, whereas transactions in the Fantom network takes only a few seconds.
Fantom addressed the ‘blockchain trilemma’ of balancing speed, security, and decentralisation using the unique Lachesis consensus.
The PoS process of Lachesis allows validators to create new blocks by staking their FTM, like any other PoS blockchain. But the critical feature of the Lachesis consensus is that the aBFT protocol allows nodes to create blocks independently.
The Byzantine Fault Tolerance algorithm allows for consensus even if there are faulty or malicious nodes in the network. Theoretically, it could handle up to one-third of faulty or malicious nodes without negatively affecting the network.
Therefore, nodes can reach consensus alone through a two-stage block confirmation process as long as they reach a two-thirds supermajority. This means there are no leader nodes responsible for creating blocks, which results in faster transactions while maintaining high levels of security.
The fantom network is more decentralised as the blocks in the network are independent. Every decentralised application runs on an independent blockchain structure that is connected to the Lachesis consensus.
The Fantom Opera mainnet utilises the Fantom Virtual Machine. This is Fantom’s software development kit that provides the framework to develop and deploy decentralised finance applications on the network.
In addition, Opera is also compatible with the Ethereum Virtual Machine (EVM). It allows developers to move their Ethereum based decentralised applications onto the Fantom network seamlessly and provides interoperability with the world’s biggest smart contract-based platform.
Can Fantom dethrone Ethereum?
While Fantom is relatively young, it has a lot going for it, especially as a contender to Ethereum. It is more decentralised due to its independent blocks, and it takes 1-2 seconds to complete a transaction on the network. It is also slowly becoming a hub for DeFi projects. According to data from Defi Llama, in January, Fantom became the third-largest decentralised finance (DeFi) ecosystem in terms of total value locked in.
But what matters in the world of crypto is the global market cap and price action. In this regard, 2021 was a good year of FTM as it started with a price of less than $0.02 and hit an all-time high of $3.48 in October 2021.
However, the price has been on a downward trend since then, falling to a low of $1.31, with a market cap of roughly $3.3 billion, according to CoinMarketCap.
Still, Fantom has shown substantial potential to be a robust alternative for developers while also providing users fast transaction speeds with lower fees.
(Edited by : Priyanka Deshpande)
First Published: IST