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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?
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.
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.
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.
And you are ready to trade 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:
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.
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:
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:
You can stake your FTM tokens on the Fantom network in the following ways:
It would help if you kept some important factors in mind before staking.
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.