Altcoin of the Week: What is Fantom?
As the popularity of cryptocurrency continues to grow, so too do the number of altcoins created in the space. Altcoins are named because they are cryptocurrencies that are not Bitcoin or Ethereum and are usually considered to be “alternatives” to using these two large blockchains.
Before you buy any sort of altcoin, it’s important to do your research, especially if you intend to invest for the long term. This is because several altcoins, such as the famed Squid Games Token are actually scams, which could result in the creator running off with all your money.
This week it’s time to learn about an altcoin which recently began climbing the charts, a coin known as Fantom. If you are interested in purchasing this coin, then keep reading, to find out all about what you can expect with an investment in Fantom.
What is Fantom?
Fantom got its name from The Phantom of the Opera, a famous French novel and play. For this reason, it was called Fantom Opera. Fantom refers to the protocol itself, while Opera refers to its smart contract chain which it operates dapps on. Fantom Opera is a layer 1 blockchain solution which allows multiple dapps to execute at the same time on a single platform. Fantom is EVM (Ethereum Virtual Machine) compatible.
Fantom is able to execute multiple smart contracts at once by using a unique consensus mechanism known as the Lachesis Protocol. This protocol uses a Directed Acyclic Graph algorithm to perform multiple Byzantine Fault Tolerance transactions simultaneously without them needing to be synchronized. This means transactions on Fantom are confirmed within 1-2 seconds, as this processing eliminates the bottleneck seen when processing Bitcoin transactions.
The nodes running the Lachesis Protocol run on a proof of stake layer, meaning those who hold enough of the Fantom token can process transactions to build new blocks on the platform. To date, there are several DEFI projects using this platform, the most famous of which are SushiSwap and Curve.
In 2019, Fantom announced future plans to add compatibility with Binance to the blockchain which they achieved. This is great for the DEFI world, but for those who wish to create a dapp that processes quickly and efficiently, you’ll want to do it via the EVM layer, as it is very easy to do this the Fantom mainnet, Opera.
What is FTM?
FTM is the abbreviation given to the Fantom cryptocurrency which is the utility token of the Fantom blockchain. In order to stake Fantom, or perform any actions on the blockchain, you will need some FTM. Holding FTM has other benefits however, as it also gives you governing rights in the blockchain. If you hold enough FTM, you will get to vote on future changes being implemented to the platform.
Currently, there is a circulating supply of 2.5 billion tokens. There are 3.175 billion total. They are available as both an ERC-20 token for use in the Ethereum system, as well as a BEP-2 token in the Binance ecosystem. Anyone with 1 FTM can stake transactions on the Fantom blockchain. Users receive a 4% annual percentage yield when they stake their FTM but have the option to gain a higher return by locking up their FTM in smart lending contracts for a specified length of time.
Fantom also offers the option to use the native cryptocurrency as collateral on the blockchain for other associated minted cryptocurrencies. These are fUSD, a Fantom stablecoin, fSwap, and fLend.
Who Invented Fantom?
Fantom was invented by Dr. Ahn Byung Ik in 2019, who was also the CEO of the Fantom Foundation behind the platform until passing the baton to current CEO Michael Kong. The Fantom Foundation is based in Korea and they embarked on the project in order to try and solve the scalability, security, and speed issues associated with Bitcoin and Ethereum.
Should You Buy Fantom?
Out of the many altcoin projects investigated on MintDice, Fantom appears to be one of the good ones. Transactions on Fantom are inexpensive, the blockchain is built to work with both Ethereum and Binance, and it definitely has a future as a layer one solution. Not to mention it has a great team who is very public about their involvement in the project
The problem with Fantom? Well, it’s a small player in a big world. There are simply so many layer one and layer two solutions out there for Ethereum, and there is no guarantee everyone will enjoy using Fantom to build and execute Dapps. Plus, some people simply prefer to build directly on Ethereum (although it is getting expensive) This makes an investment in Fantom slightly riskier than one in Ethereum, although you’ll save a bunch in transaction fees.
That being said, it is nice than you can lock up your Fantom for a percentage return. Therefore if you do decide to buy the coin, rather than just holding long term as an investment strategy, it’s probably better to loan your FTM via a smart contract for the returns. It is also a smart idea to stake your FTM. It is cool that you can get involved in FTM through either Binance or Ethereum, the choice is yours.
Where Can You Buy Fantom?
If you do decide to purchase, and hopefully leverage, some Fantom, it’s best to buy it on the Binance exchange as this is the simplest place to buy. Binance offers many trading pairs for FTM such as USDT and BTC. But if you have an account on KuCoin or FTX, Fantom can also be purchased on these exchanges using USD or USDT.
Overall, the Fantom project is a decent layer one solution to many of blockchains current problems. But it’s still a small fish in a large pond, and it’s difficult to predict whether an investment in FTM will be good in the long run. For the time being, if you do decide to invest, be sure to leverage your coins in order to get the most possible from your investment.