I have seen some cool branding when it comes to blockchains and the platforms that are built on them, but none have come near as cool as the stuff I’ve seen on the fantom network. Everything just fits the spooky atmosphere and it’s really cool to see everyone collaborating on these branded projects.
Welcome to whiteboard crypto, the #1 Youtube channel for crypto education and here we explain topics of the cryptocurrency world using analogies, stories, and examples so you can easily understand them. In this video, we are going to explain what the Fantom Network is, how it is different from the other Ethereum killers, and also some unique idea they are implementing that is currently worth around $500,000,000 and what that means for their future price.
Fantom uses a DAG
So a DAG is actually not a blockchain. In a blockchain, each block contains data, but each block must also have one before it, and one after it, so it is a chain. In a DAG, there are a bunch of computers in a network and they all kinda gossip back and forth about transactions they have with nearby computers. Using this back and forth method, they agree on what the ledger and data should be throughout time. Think of it like a rumor that spreads. This has pros and cons, for example, the transactions are confirmed as fast as possible, instead of waiting on past transactions to be confirmed. This also increases finality, but we’ll talk about that later.
Proof of Stake called Lachesis
Fantom also uses a special Proof of Stake mechanism called Lachesis. If you don’t know what proof of stake is, check out our two videos on it, people seem to really enjoy them. Right now, Lachesis has only around 50ish validators, and to become a validator, you need to stake at least 1,000,000 FTM coins, which is currently a lot of money. To me, this doesn’t scream decentralization, but maybe that’s not the most important thing to the Fantom Network.
One thing to note about using a DAG and Lachesis, is that to attack the network and create fake transactions, you only need around to control about ⅓ of the network, which is much less than other cryptocurrency networks.
Also, you don’t have to be a validator to earn rewards, as validators are very expensive to set up… you can delegate your fantom coins to a validator you trust for them to use and participate in the DAG. You only need 1 fantom to do, and you can start earning delegated staking rewards. However, you also must select a lockup period from 1 day to 1 year. The longer you stake your tokens, the higher the reward you can earn.
Due to how the DAG works and the Lachesis Staking protocol, the network is very fast, up to around 4500 transactions per second, including basic transactions and smart contracts. The important thing here is the finality of the transaction though. Finality means when it is actually confirmed, for example on Bitcoin it can take up to an hour, for Ethereum it can take 10 minutes, and on the Fantom network it is around 1-2 seconds.
Transaction costs are also very low, right now each transaction is less than a penny.
One cool thing I thought was cool is that on the network, you can lock up your FTM coins to mint fUSD which is a stablecoin backed by FTM coins at a t 5-to-1 ratio, meaning the stablecoin should be propped up pretty decently and hold its value even during turbulent markets.
EVM compatible
I haven’t mentioned this yet, but it’s quite important. Fantom is EVM compatible, which stands for Ethereum Virtual Machine. Essentially, if you build something on the Ethereum network, you can quite literally copy and paste your work onto Fantom and it should work with some minor tweaks. This is very good news for porting over popular dApps, like Curve Finance, Sushiswap, and CREAM (which is a fork of the famous Compound).
There are also a ton of devs on this network, and I’ll explain that next!
Fantom's Incentive Program
So the Fantom network has quite a hefty incentive program. Right now they are promising around 370m tokens, currently worth over $500,000,000 to developers who can create unique and useful applications on their network. Let me explain how they are different. So the Matic and Avalanche incentive programs basically gave a bunch of free tokens away as advertising, getting people to come onto the network to earn money. Fantom, instead, isn’t giving money to it’s users, but to it’s developers.
This is important because when you give money to the users… they go where the money flows and if you run out of money to give them, they can hop off your network and go to the next highest paying one. For Fantom though, they are incentivizing developers up to $1,000,000 per month to create projects that get users to hold their money on the system. Basically, if you want to make money being a developer, come up with an idea that gets people to lock up their funds on the Fantom network and you will be a millionaire. This also means the returns for users may not be as lucrative compared to other networks, so it’ll be interesting to see how this plays out. If anything, everything is EVM compatible, so whatever is developed can be used on a lot of other networks too.
$5,000,000 TVL = 1,000,000 FTM
$50,000,000 TVL = 1,800,000 FTM
$100,000,000 TVL = 5,000,000 FTM
$200,000,000 TVL = 12,000,000 FTM
Good Branding
It’s without saying that Fantom has fantastic branding. Everywhere I look, it’s like they have a whole marketing team. Even the dApps like Spookyswap, which is a decentralized exchange, or Tarot (you know, like Tarot Cards) a unique lending and borrowing protocol, or even Scream Finance, which is kinda like AAVE. All across the board, there are creative people working in the spooky, ghostly, halloweenish branding throughout the network.
Speaking of branding, something I found about Fantom is there’s this guy who created ‘FTM Alerts’ account, with a few thousand subscribers on YT and around 40,000 twitter followers and he just shares a bunch of news about the Fantom Network. I have yet to find someone like this for other networks, and it’s big news to find a content creator focusing on one network, it means they really believe in the project so much to spend time and money creating free content for others. I actually have talked with Austin from FTM Alerts, he was super helpful in creating this video!
Governance
I personally really like the way that Fantom is different when it comes to governance. So usually other blockchains will have a voting system where you can propose new ideas and then people can vote yes or no based on how many tokens they stake, and then the final answer is implemented by majority vote. Fantom, instead of using yay or nay… actually lets you vote from 1 to 4 how much you want to vote on a new idea. This way instead of yes, you can say kinda yes. To pass and be implemented, an idea must have at least 66% of the voting power. I thought this was unique and I haven’t seen it anywhere else.
Tokenomics of FTM
First off, the FTM coin was worth around 1 penny in December 2020, and now, almost a year later it is worth $1.50, so that’s the first thing you need to know.
Secondly, FTM is meant to be inflationary by nature, but they do have a max supply. Right now, there are around 2.6 billion coins in circulation, and around 500 million are held in the staking smart contract to be given out at staking rewards.
As we end this video, we want to let you know about our DeFi for Beginners guide that is fresh off the press, filled with fun images and examples and explanations that we haven’t put into videos yet. If you’re interested, it’s completely free right now, you can grab it at WhiteboardCrypto.com, we think you’ll find it really helpful if you want to make money in crypto and decentralized finance.
Thanks for watching, we hope you enjoyed this video, we really hope you learned something, and most of all, we hope to see you in our next video!
