Fantom is a "blockchain" that runs on a scratched built DAG consensus method. This aims to give close to zero fees and near instant transaction times. But can Fantom really live up to those claims? Will it be able to compete with the market today?
Background
The blockchain is created by a team based in South Korea, they aimed to create a blockchain that could get as close as possible to running smart contracts with near instant transactions and zero fees. Fantom achieves this using a DAG protocol which is different than traditional blockchain protocols, some well known DAGs are IOTA & NANO. The test-net launched in late 2018, with the main-net planned to release half a year later. The main release was delayed, however, it came out half a year after the initial release window.
Fantom aims to be a decentralized protocol & platform, but during the initial release and development the team will be closely managing the network until it attracts enough users to be decentralized. 6 months after the main-net release the team will have the right to make change to underlying network rules & for some time after release the team will hold a large number of tokens to help guide the governance voting. How long the team plans to do this hasn't been announced. This process have been going well with very few snags along the way. At one point however, two of the network's largest validators slowed their block creation rate which caused the network to go offline for the better half of a day.
As mentioned earlier, Fantom runs on their own version of DAG or Directed Acyclic Graph. Bitcoin, as an example, works linearly where there are forks and miners compete with the invalid blocks created are ignored. DAG has transactions include the parent transactions and signing their hashes. This creates a large heap of blocks with several different transactions, a consensus algorithm then orders these linearly and ignores the invalid transactions.
This is also combined with a separate consensus method known as TxFlow, it runs parallel and votes on new block creation along with the aBFT/DAG. All users essentially have their own LEDGER of transactions and can submit a new one to a node. In summary: a user submits a transaction to a note and signs a receipt. The node broadcasts this into the DAG structure and the transaction is spread out amongst the nodes. Once that block is spread out enough in the DAG, the network broadcasts a confirmation across the network once majority has acknowledged it. Once the transaction hits this stage the network agrees on a finalized timestamp for the transaction. This protocol is known as the Lachesis protocol.
Validators that run nodes require to have 3,185 million Fantom staked to run, users can stake to a validator to get a portion of the rewards and help the network have a decentralized network. This has been decreased to 1 million Fantom. Staking rewards are automatically given out to validators from a reserve from the initial launch along with a small network fee. Delegators & validators can also participate in governance proposals and submit proposals for network changes. However, there is a deposit that a user most pay for each proposal and if the proposal gets rejected by a majority vote, the deposit is lost.
The network hosts smart contracts that can be run very cheaply and efficiently thanks to the network's highly scalable DAG/aBFT consensus. Same as with all other blockchains running smart contracts, seeing more Dapps being built on them and utilized increases the network's value. Staking rewards can be accessed by anyone, not only validators. Users can get a rough 4% APY without lockup or up to 13% for a 365 binding period. Any staked Fantom can be redeemed ahead of time, but any gathered rewards will be burned.
Fantom today
As of today, Fantom is still centralized. The team plans to head more towards a decentralized network and has been doing so since main-net launch. But the price to run a validator is very high, 1 million FTM is today worth around 3 million dollars. That along with that validators performing double signatures or faulty transactions can have their coins slashed, which is a risk. Given time this network can compete with the largest blockchains, as it is permissionless with high scalability and possibility for a decentralized nature. That will take time, however, and if Fantom will come out on top remains to be seen.
- Really fast and robust consensus method
- Strong smart contract support
- Centralized
- Requires main wallet & platform to be accessed
- Outsources wallet development
