In recent years, Fantom (FTM) has gained attention as a smart contract-enabled blockchain designed for decentralized application (dApp) development. Built with scalability, security, and decentralization in mind, Fantom provides a robust environment for developers, addressing the “Blockchain Trilemma” by offering a balance of these essential elements. With its unique approach, Fantom aims to enhance the blockchain space by providing faster and more cost-effective solutions.
Unlike older networks, Fantom stands out for its flexibility and ability to offer lower transaction fees without sacrificing efficiency. Let’s learn more about Fantom below!
What is Fantom?
Fantom is a decentralized, open-source platform created specifically for dApps and digital assets. Each application on Fantom functions on its own blockchain, which is individually optimized to meet the unique needs of that project. Although each dApp operates on its own blockchain, it still benefits from the security and speed provided by Fantom’s main network.
Fantom’s modular structure makes it possible for developers to customize aspects of their dApp blockchains, such as tokenomics, governance, and transaction speed, to align with the specific goals of their applications. This flexibility, combined with the platform’s focus on low-cost, high-speed transactions, makes Fantom an appealing choice for developers looking to build on a next-generation blockchain.
Fantom Network Structure
At the core of Fantom’s functionality is its Lachesis consensus mechanism, a unique, leaderless proof-of-stake (PoS) model designed to ensure both speed and security. Lachesis operates as an asynchronous Byzantine Fault Tolerant (aBFT) system, meaning it allows different nodes to process data independently without waiting for a sequence, making transactions incredibly fast and resilient. This also enables the network to tolerate up to one-third of participants engaging in faulty or malicious actions without disrupting the network.
One of the standout features of Lachesis is its near-instant transaction finality. In contrast to Proof-of-Work (PoW) systems, which require multiple block confirmations, Fantom’s aBFT mechanism confirms and finalizes transactions within seconds. By eliminating the need for lengthy block confirmations, Fantom achieves a level of scalability that is hard to match.
Each node on Fantom’s network maintains its own Directed Acyclic Graph (DAG) structure, which records the order of events and transactions independently. These event blocks are then compiled into finalized blocks, which are recorded on Fantom’s broader network. Nodes communicate only as needed about transactions and events, without finalizing blocks or determining the network’s state, contributing to a decentralized, leaderless environment where all nodes play an equal role.
FTM Token and Staking Mechanism
The FTM token is the backbone of Fantom’s network, used for everything from securing the network to making payments and voting on important decisions. FTM holders can earn rewards by staking, which means locking up their tokens to support the network. Fantom offers flexible staking options: you can stake your FTM for basic rewards or lock it for a set period to earn higher returns.
Fantom’s staking also includes a unique feature called Liquid Staking, which allows users to mint a synthetic version of FTM called sFTM. This can be used in Fantom’s DeFi (decentralized finance) system to earn additional rewards, providing even more flexibility and potential earnings for users.
Use Cases and Future Applications
Fantom’s flexibility and speed make it an ideal platform for a wide range of applications. Developers can create dApps for anything from finance (DeFi) and payments to more complex areas like supply chain management and smart city projects. Its unique structure, which allows each dApp to operate independently yet still benefit from network-wide security and speed, opens the door for creative use cases across various industries.
Buy & Sell Fantom (FTM) in a Tax-Advantaged Crypto IRA
For investors looking to add Fantom (FTM) to their portfolios, a tax-advantaged Crypto IRA at iTrustCapital can be an option. Buying and selling FTM through a Crypto IRA allows you to benefit from potential gains while enjoying tax advantages, which can help maximize your long-term returns.
Click below to learn more about the benefits of investing in an IRA.
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