What is Fantom (FTM)?
Fantom is a DAG network that permits users to send and receive cryptocurrencies and use smart contracts to interact with dApps. In a sense, Fantom is a faster, cheaper version of Ethereum but more centralization.
What is DAG?
Fantom uses a DAG, and a DAG is not a blockchain. In a blockchain, every block contains data, but each block must also have one before it and one after it to become a chain. In a DAG, there are a cluster of computers in this network and they all just kind of gossip back and forth repeatedly about transactions that they have with adjacent computers.
By using this back and forth method, they agree on the ledger and how they should store the data throughout time. Think of it kind of like a rumour that spreads.
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Pros and Cons
Although they have both pros and cons, the cons are more significant in number. The transactions are confirmed as quickly as possible instead of waiting for past transactions to be approved. This also increases something called Finality.
Fantom uses a remarkable proof of stake model called Lachesis. Lachesis now has only 50 validators, and to become a validator, you need to stake approximately one million phantom coins, which is a tremendous amount of money nowadays. This doesn’t shriek decentralization, but maybe that’s not the most vital thing to the fantom network.
One important thing to ponder about using a DAG and their Lachesis model is attacking the network and creating fake transactions. You only need to have control around a third of the network, which is less than other cryptocurrency networks. Also, it is not necessary to be a validator to earn rewards. Validators are very expensive to set up, so you can delegate your fantom coins to another validator you trust.
To utilize them to participate in the DAG, you only need one fantom coin to do this, and you can earn delegated staking rewards. In this case, you need to choose a lock-up period from one day to one year. The longer time you stake your tokens, the higher the reward you can earn. Also, due to the working of the DAG and the Lachesis staking protocol, the network is rapidly up to around 4500 transactions per second, involving basic transactions and smart contracts.
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Finality of the transactions
Finality is a term that means when the block is confirmed. For example, it can take up to an hour; for Ethereum, it can take up to 10 minutes, and on the Fantom, it is approximately one to two seconds. These transaction costs are also very low on the fantom network.
Each transaction is about less than a penny. You can lock up your fantom coins to mint fUSD, a stable coin backed by fantom coins at a five-to-one ratio, implying that the stable coin should be propped up decently and hold its value during turbulent markets.
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Fantom is EVM compatible, which stands for the Ethereum virtual machine. If you construct something on the Ethereum network, you can copy and paste your work over to the fantom network, and it should work with a few minor tweaks.
This is good news for porting over popular dApps like curve finance, Sushi swap and cream, which is the fork of the famous compound DAB.
They promise around 370 million tokens currently worth half a billion dollars to developers who can create unique and valuable applications on their network. The matic and the avalanche incentive programs gave a bunch of free tokens away as advertising getting people to join the network and earn money.
Fantom instead isn’t giving money to its users but is to its developers. It is essential because when you give money to the users, they follow where the money flows, and if you run out of the amount to keep giving them, they will hop off your network and follow to the next highest paying one. However, Fantom incentivizes developers to construct projects that get users to hold their amount on the system up to a million dollars per month.
If you desire to make money being a developer, come up with the idea that gets people to lock their money on the fantom network, and you will be a millionaire. The downside of this is that it also means the return for users may not be as lucrative compared to other networks, but it will be interesting to see how this half-billion-dollar incentive program plays out. If everything is EVM compatible, whatever is developed can be used on many other networks.
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Fantom has great branding everywhere I look. It’s like they have entire marketing, even the dApps like spooky swap, which is a decentralized exchange or tear it or like the Tarot cards is unique lending and borrowing protocol or even scream finance which is much like AAVE.
All across the board, creative people are working in the spooky ghostly Halloween-ish branding throughout the network.
Fantom is different when it comes to governance. Usually, on other blockchains, they have a voting system where you can use your coins to develop innovative ideas, and other people can use their coins to vote based on the number of tokens they stake. Then the majority vote implements the final answer. In contrast, Fantom lets you vote how much you want to vote for a new idea from one to four.
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Early when it started, Fantom was 1 penny valuable, but now it’s $1.50. Fantom is inflationary and has around 2.6 billion coins in circulation, and about 500 million of them are held in the staking smart contract as staking rewards.