Fantom is a Layer 1 blockchain that features multiple execution chains on top of a single consensus layer, earning the nickname “the Ethereum killer.”
The Fantom team built a new model for reaching consensus called the Lachesis protocol, which is an Asynchronous Byzantine Fault Tolerance (aBFT) consensus mechanism using Directed Acyclic Graphs.
The big innovation with this model is that transactions are not confirmed between nodes in a particular order. Instead, individual nodes confirm transactions and then agree with other nodes later in no particular order.
This model results in enhanced performance in terms of speed, scalability, and security relative to older consensus models like Classical and Nakamoto.
In addition to the consensus layer, Fantom uses an EVM-compatible smart contract chain called Opera.
With its enhanced consensus performance, Fantom has been viewed as a strong alternative to the Ethereum network as it takes very few adjustments to deploy EVM-compatible smart contract dApps onto the Fantom network.
What is Fantom (FTM)?
Fantom is a directed acyclic graph (DAG)–based smart contract platform that provides the infrastructure for decentralized applications (dApps) and digital assets.
Unlike traditional blockchains that use a linear chain of blocks, Fantom employs a DAG structure, allowing faster transaction speeds and increased scalability without compromising security or decentralization.
At the heart of Fantom lies the Lachesis aBFT consensus mechanism, an asynchronous Byzantine fault-tolerant system.
This innovative consensus mechanism ensures that transactions are confirmed in less than one second and cost just a few cents .
The aBFT system is crucial because it guarantees high speed and security. It allows the network to finalize transactions quickly while remaining secure even if up to one-third of the nodes are compromised or malfunctioning.
Key Features and Advantages of Fantom
Fantom offers several unique advantages that make it an attractive platform for developers and users:
- High Speed and Scalability: Fantom’s DAG architecture and Lachesis consensus mechanism enable high throughput and low latency, making it one of the fastest and most scalable blockchain platforms available.
- Security: Fantom’s proof-of-stake (PoS) consensus mechanism and robust network architecture ensure the security and integrity of transactions on the platform, protecting users’ assets and data from malicious actors.
- Low Transaction Fees: Fantom boasts significantly lower transaction fees compared to other popular blockchains like Ethereum, making it more cost-effective for users.
- Interoperability: Fantom’s interoperability features allow seamless integration with other blockchain networks, facilitating cross-chain asset transfers and data exchange.
- EVM Compatibility: Fantom is compatible with the Ethereum Virtual Machine (EVM), allowing developers to easily port their existing Ethereum-based dApps to Fantom.
- Gas Monetization: Fantom offers a gas monetization program where dApps receive 15% of the gas fees they generate, incentivizing developers to build on the platform.
- Addressing the Blockchain Trilemma: Fantom effectively tackles the blockchain trilemma by providing a balance of speed, security, and decentralization without compromising any of these crucial aspects.
Comparing Fantom with Other Blockchains
Fantom’s key differentiator is its high throughput and low latency, achieved through its DAG architecture and Lachesis consensus mechanism.
Compared to Ethereum, Fantom offers significantly faster transaction speeds and lower fees. However, Ethereum has a larger and more established ecosystem with a broader range of dApps and users.
Other competitors, such as Solana and Avalanche, also present challenges with their unique strengths and features.
Use Cases and Applications of Fantom
Fantom’s versatility and capabilities make it suitable for a wide range of use cases:
- Decentralized Finance (DeFi): Fantom has become a popular platform for DeFi applications, offering fast and inexpensive transactions for lending, borrowing, and trading cryptocurrencies.
- Supply Chain Management: Fantom can be used to track goods and products throughout the supply chain, enhancing transparency and efficiency.
- Gaming: Fantom’s high throughput and low latency make it ideal for blockchain-based games, enabling seamless in-game transactions and asset ownership.
- Non-Fungible Tokens (NFTs): Fantom supports the creation and trading of NFTs, providing a platform for digital art, collectibles, and other unique assets.
- Enterprise Solutions: Fantom can be used to develop secure and efficient enterprise applications, such as identity management systems and data storage solutions.
- “Spooky” Theme: Interestingly, many projects in the Fantom ecosystem have adopted names related to mystery and the supernatural, such as SpookySwap, SpiritSwap, and SoulSwap.
- Incentives for Developers: Fantom has implemented a $370 million FTM reward program to incentivize developers and encourage the adoption of the platform.
What is the Fantom (FTM) token?
FTM token is the native token of the Fantom network and is used to pay transaction/smart contract fees, as well as for staking to participate in Fanton’s on-chain governance system and to secure the network.
FTM tokens are also given as compensation for validators participating in transaction processes and preventing spam transactions.
As an ERC-20 token, FTM can be used across DeFi offerings other EVM-compatible platforms, and blockchains, including the Ethereum network, Avalanche, and Binance Smart Chain.
Here are the primary functions of the FTM token:
- Staking: Users can stake FTM to secure the network and earn rewards.
- Governance: FTM holders can participate in on-chain governance by voting on proposals and influencing the future direction of the Fantom ecosystem.
- Payments: FTM can be used to make payments and transfer value within the Fantom network.
- Network Fees: FTM is used to pay for transaction fees and other network services.
Fantom Wallet (fWallet)
Fantom offers a free wallet called fWallet, which provides a user-friendly interface for interacting with the Fantom ecosystem.
It allows users to easily manage their FTM tokens, stake, participate in governance, and access various apps.
One of the convenient features of fWallet is its automatic conversion of Fantom ERC-20 and BEP-2 tokens, which run on the Ethereum and Binance networks, to the native FTM tokens used on the Fantom Opera mainnet.
Tokenomics and Distribution
The total supply of FTM is capped at 3.175 billion tokens.
As of January 2025, approximately 2.8 billion FTM are in circulation.
The initial token distribution was as follows:
- 40.18%: public and private sale investors
- 38.76%: vested for staking rewards, distributed daily until 2024. After that period, the protocol will introduce new ways to incentivize validators.
- 12%: advisors
- 7.49%: team and founders
- 1.57%: public investors
Team Background
Fantom Foundation was founded by Ahn Byung Ik and led by Michael Kong as the CEO.
Ahn Byung Ik holds a Ph.D. in Computer Science from Yonsei University in Seoul, Korea. In 2010, he established a food-tech platform called SikSin and is the President of the Korea Foodtech Association.
Michael Kong studied Information Technology and Finance at the University of Sydney, where his final thesis was on decompiling and analyzing virtual machine instructions for the EVM to find issues in smart contracts.
Andre Cronje, a prominent DeFi architect known for his work on Yearn Finance and Keep3rV1, has contributed to the Fantom project, lending his expertise and credibility to the platform.
Notable Investors: Alameda Research, Arrington XRP Capital, Block Tower Capital, Elysium
Notable Projects:
- SpookySwap: DEX
- Geist Finance: decentralized liquidity market
- Tomb Finance: algorithmic stablecoin
- Curve: Stableswap DEX
- Beefy Finance: Yield Aggregator
Risks and Challenges
While Fantom presents a promising blockchain solution, there are potential risks and challenges:
- Competition: Fantom faces intense competition from other layer-1 blockchains, such as Ethereum, which has a larger ecosystem and greater brand recognition.
- Security Risks: Although Fantom has a robust security architecture, no blockchain platform is entirely immune to potential vulnerabilities and attacks. History has shown that even well-established platforms can be exploited, leading to significant financial losses for users.
- Volatility: Like most cryptocurrencies, FTM is subject to price volatility, which can pose risks for investors. The cryptocurrency market is known for its unpredictable swings, and FTM’s price can be influenced by various factors, including market sentiment, regulatory changes, and technological advancements.
- Regulatory Uncertainty: The regulatory landscape for cryptocurrencies is still evolving, and future regulations could impact Fantom’s development and adoption. Governments worldwide are still grappling with how to regulate cryptocurrencies, and stricter regulations could hinder the growth of platforms like Fantom.
Fantom Rebrands as Sonic Labs
Fantom officially rebranded to Sonic Labs. This strategic move, announced on August 1, 2024, marks a significant evolution in the platform’s development.
Sonic Labs is set to introduce a new EVM-compatible chain named Sonic, designed to enhance transaction speeds and efficiency within the blockchain ecosystem.
The forthcoming Sonic chain aims to process over 10,000 transactions per second (TPS) with one-second confirmation times, positioning it as a leading solution for rapid digital asset settlements.
To facilitate a seamless transition, FTM token holders will have the opportunity to exchange their tokens for the new native token, S, at a 1:1 ratio upon the launch of the Sonic network.
This migration is designed to ensure continuity and engagement within the evolving ecosystem
Users can migrate their FTM tokens to Sonic’s native token, S, and participate in staking, with governance features planned for the near future.
Sonic boasts EVM compatibility, near-instant finality, and support for popular wallets like Metamask, Rabby, and OKX, enabling seamless integration for users and developers.
In May 2024, Sonic raised $10 million in a strategic funding round led by Hashed Fund, with notable contributions from angel investors such as Aave’s Stani Kulechov and Compound Finance’s Robert Leshner.
This funding helped establish Sonic as a successor to Fantom, which peaked with $8 billion in total value locked (TVL) in 2022 but has since averaged $100 million in TVL throughout 2024.
According to Sonic Labs CEO Michael Kong, the rebranding and launch of Sonic are the results of more than two years of effort, focusing on redesigning and optimizing the execution stack of the Opera Chain.
Key improvements to the database, storage, and overall infrastructure make operating nodes more cost-effective and efficient.
Sonic aims to leverage its technical advancements and robust ecosystem to build on Fantom’s legacy and attract users and developers in the competitive blockchain space.