How FTM (Fantom) Works

Fantom (FTM) is a highly scalable blockchain platform designed to support decentralized applications (dApps) and digital currencies. Unlike traditional blockchains, which rely on proof-of-work or proof-of-stake consensus mechanisms, Fantom utilizes a unique technology known as the Lachesis protocol. This approach allows for fast and secure transactions, while maintaining network decentralization.

Lachesis Protocol

The Lachesis protocol is a type of Directed Acyclic Graph (DAG) based consensus algorithm, which distinguishes Fantom from other blockchain networks. In a DAG system, transactions are not confirmed in blocks as in other traditional blockchain architectures like Bitcoin or Ethereum. Instead, transactions are processed asynchronously and are confirmed as individual events.

Thanks to the DAG structure, Fantom’s Lachesis protocol allows for a higher rate of transaction throughput, lower fees, and faster confirmation times. This design helps to overcome some limitations found in traditional blockchains, particularly around scalability and speed. The protocol also includes a byzantine fault tolerance (BFT) feature, promoting security and ensuring that a small number of faulty or potentially malicious nodes do not interfere with the network’s operations.

Opera Chain

Fantom's public blockchain, known as the Opera Chain, is where transactions and smart contracts are handled. Opera operates using the Lachesis consensus mechanism. Additionally, it is fully compatible with the Ethereum Virtual Machine (EVM), which makes it relatively easy for developers currently building on Ethereum to migrate their projects to Fantom without needing to modify the underlying code significantly. This cross-compatibility can encourage more dApps and decentralized finance (DeFi) projects to utilize Fantom for its higher transaction speeds and lower costs.

FTM Token

The FTM token acts as the native cryptocurrency of the Fantom ecosystem and has several primary uses within the network. Firstly, it serves as the energy for network transactions — users need FTM to pay for transaction fees. Secondly, the token is used for staking purposes in Fantom’s proof-of-stake system, where validators are required to lock up a certain amount of FTM to participate in validating transactions. FTM is also used for network governance, allowing holders to vote on changes to the platform’s operational features.

Smart Contracts and DeFi

One key offering of Fantom’s platform is its smart contract capabilities. Its compatibility with Ethereum’s EVM allows it to support a wide variety of DeFi applications. With support for Solidity, the popular programming language used to craft Ethereum smart contracts, developers also benefit from a familiar development environment. This functionality extends beyond just DeFi, including areas such as supply chain management, healthcare, and digital identity.