Fantom (FTM) is a blockchain platform designed to support decentralised applications (dApps) and smart contracts. It features a unique consensus mechanism that ensures high transaction speeds without sacrificing decentralisation or security. This balance addresses the "blockchain trilemma," which typically involves trade-offs between speed, security, and decentralisation. Fantom aims to optimise all three through its innovative proof-of-stake (PoS) consensus mechanism, Lachesis.

The native token of the Fantom network, FTM, serves multiple purposes, including staking, governance, payments, and transaction fees. Validators, developers, and community members receive FTM tokens as rewards funded by transaction fees.

Fantom was created to overcome the limitations of earlier blockchain platforms like Bitcoin and Ethereum, specifically their long transaction times. Validators stake FTM tokens to participate in the validation process, which enhances network security and aligns their interests with the network's proper functioning. Additionally, Fantom's treasury, funded by transaction fees and other revenues, supports ongoing development and new initiatives.

How Does Fantom (FTM) Work?

The Fantom network was designed to offer high transaction speed while maintaining security and scalability built around four core principles:

Modularity

Fantom’s modular architecture allows for extensive customisation. For example, users can seamlessly transfer Ethereum-based decentralised applications (dApps) to the Fantom mainnet, which operates on Opera, Fantom's open-source blockchain.

Scalability

Applications on Fantom function independently, ensuring that the performance and stability of one application remain unaffected by the network traffic of others.

Open Source

The Fantom protocol is open-source, enabling anyone to run a node and modify the underlying code.

Security

Fantom is secured by the Lachesis consensus mechanism, which the Fantom team claims is faster, more secure, and more scalable than both the Classical and Nakamoto consensus systems.

What Gives the Fantom (FTM) Token Value?

Fantom addresses scalability issues of traditional blockchains with its high-speed Lachesis consensus mechanism. Lachesis is leaderless, offers finality, and provides Asynchronous Byzantine Fault Tolerance, allowing the chain to scale without compromising security. Transactions on the Fantom network clear in one second and cost fractions of a penny.
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Developers can build dApps and run smart contracts on Fantom, with numerous projects already deployed in the decentralised finance (DeFi) space. Examples include cross-chain swaps by 1inch, decentralised exchanges like SushiSwap, NFT projects such as BitGem and Bitlootbox, and cryptocurrency-accepting travel services like Travala.

What Makes Fantom (FTM) Unique?

Traditional blockchain systems, such as the Bitcoin blockchain, aren't designed for scalability; rather, they prioritise security and decentralisation. A transaction on the Bitcoin network, for example, can take anywhere from 10 to 15 minutes which makes scaling the network in terms of transactions difficult.

The Fantom team aims to fill this gap by utilising a leaderless proof-of-stake (PoS) protocol that is used to protect the network (i.e., the blockchain does not compromise security or decentralisation). Moreover, a transaction on the FTM network takes 1–2 seconds to complete with the transaction costs being far lower than those of Bitcoin.

The Fantom Opera mainnet is Ethereum Virtual Machine (EVM)-compatible and supports full smart contract functionality via Solidity. Fantom's network is unique in that it is self-contained, meaning that the performance of one area's traffic congestion has no bearing on other areas of the network.

What is Fantom (FTM) used for?

The Fantom network's primary token, FTM, is utilised for payments, governance, staking and fees and for safeguarding the network.

Payments

The Fantom network's speedy finality makes the payments faster (take around a second). Moreover, high throughput and low costs (roughly $0.0000001) make the FTM token perfect for exchanging money.

Governance

For on-chain governance, FTM is required where stakeholders can propose and vote on modifications and improvements through governance. Because Fantom is a fully permissionless and leaderless decentralised ecosystem, on-chain governance is in charge of all network decisions. Therefore, the governance token, FTM, must participate in the voting process.

Staking

FTM can be used to stake to secure the Fantom network and receive FTM tokens as a reward without requiring any special hardware or software. You can do it from your phone or computer — it's as simple as that!

Network Fees

FTM is used to pay for network fees such as fees for deploying Fantom smart contracts or creating new networks or even transaction fees. The fee ensures that the network is not an easy target for spam, and a malicious user cannot cause speed issues or clog the ledger with meaningless data. Although the fees on Fantom are pretty low, they are sufficient to keep the attackers away by making entry into the system exceedingly costly for a malevolent actor.

Network Security

With the use of a proof-of-stake system, the FTM token aims to secure the network where stakers need to lock their tokens, and validators need to hold a minimum of 3,175,000 FTM to participate. Fees and epoch rewards are given to stakers and validators for their services.

Fantom’s combination of speed, security, scalability, and unique features make it a promising platform for various blockchain applications.