Fantom (FTM) – Complete Guide

Established in 2018, Fantom is a level 1 blockchain that is an essential alternative to the low speeds and high costs of transacting through Ethereum. Powered by its native token, FTM, it is a blockchain network that is highly scalable. This blockchain platform is for crypto dApps, DeFi and other enterprise applications. 

Want to know more about this blockchain platform? 

Read on.

How does Fantom work?

Fantom is an open-source and fast smart contract platform for various digital assets.

Built on the aBFT consensus mechanism, Fantom has used many innovations that make it better than the rest. Besides using all the security and versatility of blockchain technology, Fantom uses a directed acyclic graph (DAG) to increase its speed. In this system, the transaction histories of the blockchain are displayed in the form of a ‘hashgraph’. 

It also uses Lachesis, a leaderless consensus mechanism which is a kind of ‘proof of stake’ system. Its advantage is that it can operate seamlessly even when a third of the transaction data is fraudulent. Thus, Fantom can validate transactions independently without going through a queue of transactions. 

With these innovations in effect, Fantom processes a transaction in two seconds, while blockchains like Bitcoin and Ethereum can take several minutes. 

Fantom is also compatible with Ethereum Virtual Machine (EVM). Thus, it is easy to port Ethereum-based decentralised applications to this blockchain.

Native token of Fantom: FTM

FTM is this network’s native token, which can be used for payments, governance, securing the network via staking and other necessary purposes. 

The FTM token has three versions:

Ethereum (ERC-20) token

This version of the FTM token can be used on Ethereum, thereby providing you with many investment opportunities on the blockchain. If you are interested in NFTs, this FTM variant can come in handy. 

Opera Mainnet token

You have to pay a small network fee for every transaction on this network, like creating smart contracts and creating new networks. It is done to compensate validators for their work and prevent transaction spam. You can use the Opera version of the token to pay this network fee. 

Fantom uses a Proof-of-Stake method that requires its validators to hold this token. If you decide to lock up your FTM assets, you can run your validator node and earn transaction fees and rewards. 

You can also receive staking rewards by delegating your tokens to a validator. Although you hold full custody of their funds, the validator takes a small fee for their service. 

By locking in your FTM assets, you can help the network stay secure and decentralised. 

Also, as Fantom is a fully decentralised and leaderless system, all chains regarding the network are carried out by on-chain governance. If you are a staker on this network, you can vote for changes and propose improvements for the ecosystem. 

Binance Chain (BEP-2) token

This variant of the FTM token enables you to use it on the Binance blockchain. 

Using FTM, you also get the benefit of high-speed transactions. Money transfers take approximately 1 second, and it costs around $0.0000001. 

The total number of FTMs available in the ecosystem is 3.175 billion. 2.1 billion are in circulation, while the remaining are reserved as staking rewards. 

Fantom states that depending on governance decisions, it may take more than two years to distribute all the staking rewards and the supply to reach total circulation. 

How to buy FTM?

You can buy FTM tokens using both fiat currency and crypto. You can use bank transfers and debit or credit cards to buy with money. To buy FTMs with crypto, you must use Ethereum, Bitcoin, BNB or Tether.  

You can buy this token from all major decentralised crypto exchanges. For your convenience, let’s take the instance of KuCoin. You can follow the steps mentioned below to buy FTM using KuCoin. 

1. Sign in to your official KuCoin account or sign up if you do not have one
2. Activate 2-factor authentication from the security settings
3. Scan the barcode with your Google Authenticator app and enter the 6-digit verification code
4. Validate your email and submit an ID proof to validate your identity
5. Go to the ‘Assets’ menu and select Fantom(FTM)
6. Then, go to the ‘Deposit’ menu on the left side of your screen and fund your account.
7. Select ‘Markets’ from the trading menu and click ‘Trading.’

And you are ready to trade your FTM tokens.

Storing your FTM tokens

Fantom discourages storing your FTM tokens on exchanges due to custodial risks. Also, you can lose out on staking rewards if you do so. You can use MetaMask, Ledger, fWallet (Fantom wallet) or any other reliable crypto wallet for storing your FTM assets. 

Let’s take the example of the Fantom wallet to understand how to add an FTM token to your crypto wallet. You can install this crypto wallet on Google Chrome as an extension or even use it on your Android and iOS device. 

The steps to create a new account are:

1. Go to https://pwawallet.fantom.network/#/
2. Tap on ‘Create Wallet’
3. Create an at least 8-character long password
4. Re-enter the password, click on the checkbox and download the keystore file

To access your crypto wallet from other devices, you can use the password and keystore file. Make sure you securely store your keystore file. It contains a private key that is encrypted with the password you set. 

1. Click on ‘View your private key’ and copy down your 24-word mnemonic phrase and your private key
2. Verify your 24-word mnemonic phrase 
3. Press ‘Access your wallet’

You can now see your wallet with the public address on the home screen. You can click on the address to access the wallet. 

Steps to receive FTM tokens are:

1. Go to the ‘Wallet’ tab and click on the ‘Receive’ button
2. Use the copy icon to copy the Opera FTM address to your clipboard
3. Send funds to your crypto wallet using this address

Note: You can only send and receive Opera Mainnet FTM tokens

Based on your investment strategy, when you decide to sell your tokens, you can do it in the following ways:

1. From the sidebar, click on the ‘Wallet’ option and click on ‘Send’
2. Enter the amount and address
3. Type your password and click on ‘Send’

Staking on Fantom

You can stake your FTM tokens on the Fantom network in the following ways:

1. On the Fantom website, go to the ‘Staking’ menu
2. Click on ‘Delegation’ from the drop-down menu
3. Based on social media presence, select a reputable validator
4. Choose your Annual Percentage Rate (the higher the tenure, the better the reward)
5. Enter the FTM amount
6. Select the period you want your assets to be locked up

It would help if you kept some important factors in mind before staking. 

• It would help if you staked your tokens to validate your transactions on the Fantom network
• For staking, you will receive FTM tokens in return
• You can unlock and stake/unstake tokens whenever you wish 
• 1 FTM is the minimum staking amount on this network
• Upon getting staking rewards, the delegation fee is 15%
• When you unstake your FTM tokens, there is a bonding time of 7 days, after which you get your funds
• The minimum number of days for locking your FTM holdings is 0 days. You will earn the minimum reward rate in this case. 
• You can lock your FTM holdings for 365 days, thereby getting the maximum reward rate. 

Indeed, Fantom is not the sole project that uses DAG for scalability. However, offering a high transaction rate each second at a surprisingly low fee is letting it receive increased acceptance in certain industries. This will lead to higher adoption among various enterprises.