Ethereum Blockchain may be effective and life-changing, but it is plagued with some issues. Initially, the network worked smoothly, developers could seamlessly create their decentralized apps and smart contracts, while users could carry out transactions without paying a lot in gas fees. As more decentralized apps were built on the blockchain, it became congested and transaction fees increased. Crypto enthusiasts have to pay high gas fees before their transactions are verified. For instance, if an NFT project on Ethereum wants to mint NFTs, community members tend to engage in gas wars, with some offering to pay more in fees to have their transactions verified before the end of the sale. This is one of the numerous ways that the congestion in Ethereum affects both the NFT and DeFi spaces.
Fantom is one of the new generation networks that is trying to solve the issues that are noticeable in the Ethereum network. It is a smart contract platform that offers scalability and cheap gas fees with the Directed Acrylic Graph- DAG.
Fantom is trying to be the support infrastructure for developers that are creating smart city features. It intends to execute hundreds of thousands of transactions in a second, which is far faster than what is obtainable on Ethereum. As a high-performing network, it will be utilized in different sectors, improving their functionalities.
Who created Fantom?
Fantom was created by a notable South Korean computer scientist, Dr. Ahn Byung IK. He works with Fortune Magazine, and possesses a doctorate degree in computer science. Dr. Ahn is also the founder of a restaurant rating app called, SikSin. Though he founded Fantom, he has cut ties with it, handing over the project to Michael Kong. Kong has an in-depth knowledge of blockchain technology as a smart contract developer. The current CEO of Fantom, Michael Kong has worked in different capacities in the blockchain space.
Some of Fantom’s decentralized finance applications that users can access will be discussed below.
With this feature, users can mint different types of synthetic assets on the network like CBDCs, tokens, and other digital assets.
Liquid staking is the process of allowing delegators to have access to their staked tokens and utilize them in decentralized finance features. Fantom offers this feature that permits users to utilize their staked FTM tokens in different decentralized finance applications.
Crypto enthusiasts can use the fLend feature to lend and borrow digital assets and earn revenue in the process.
With this feature, people can trade their digital assets through the decentralized swapping functionality.
What is Fantom’s architecture?
Fantom is a Delegated Proof of Stake network that functions with different layers like Opera Ware Layer, Opera Core Layer, as well as Application Layer.
Opera Core Layer
The job of the Opera Core Layer is to ensure that the nodes in the network work effectively. As the first layer, it ensures that transactions are verified via DAG technology. Unlike other networks, DAG technology does not need every node to save data on every transaction that occurred. Fantom, through Lachesis protocol, saves transactions on the validating and Witness nodes. Witness node verifies transactions using the data gathered by the validator nodes. Immediately transacting is verified, they are added to the blockchain. To become a validator node, the user must have one million FTM locked in their wallet. Validator nodes verify new transactions from the timestamped point called Lamport.
The consensus mechanism of the Fantom network is Distributed Proof of Stake.
Opera Ware Layer
The second layer is the Opera Ware Layer that is designed to allow the network to function effectively, as well as monitor the reward system and write ‘Story Data’ for the network. Story Data is a tool that tracks every transaction that has occurred in the network.
With this layer, developers can create their decentralized apps. It is highly secure and ensures that the public APIs work effectively.
Benefits of Fantom
As earlier mentioned, Ethereum is plagued with scalability issues, making it difficult for developers to launch their smart contracts and decentralized apps. Apart from the aforementioned, users have to worry about slow transaction speed. With Fantom, congestion issues are non-existent, as the network is highly scalable, with a fast transaction speed.
Environmentalists have complained on numerous occasions about the impact of Proof of Work networks on the environment. Mining consumes large computing power, and this has forced some countries to ban this activity. On the other hand, validating processes that are common in Fantom is energy efficient because the Lachesis consensus mechanism needs a lesser amount of electricity.
Affordable Gas Fees
With the coming of Fantom, the gas fees that crypto enthusiasts pay when they carry out transactions have reduced drastically. When compared with what people pay when they use Ethereum, Fantom is cost-saving.
Use Cases of Fantom Token (FTM)
FTM is the native token of this ecosystem and it possesses different use cases. The token can be used in governance activities, fee payment, compensation of validators, staking rewards, and much more.
Holders of FTM that delegate their tokens to any validator of their choice are rewarded. Usually, the incentives can be accessed by the users after the staking period ends.
As an environmentally-friendly network, validators play crucial roles in the functioning and security of the network. They are rewarded with FTM tokens for preventing spam and verifying transactions. Only those that have the minimum number of FTM tokens are allowed to host a validator node. As for token holders that do not meet the threshold, they can delegate FTM to validators for rewards.
Using the network for transactions incurs transaction fees, which are paid with FTM. When a user initiates a transaction on Fantom, the native token- FTM- must be paid before the transaction can be verified. Before a smart contract can be deployed, fees must be made in FTM.
Holders of FTM are allowed to vote on proposals and decide on what happens in the ecosystem.
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