Fantom (FTM) | Coin Review |
Fantom aims to be the world’s first Directed Acyclic Graph (DAG) based smart contract platform, they seek to solve the issue of scalability and confirmation time of the existing blockchain platforms while maintaining close to zero cost. The Fantom team has set a throughput target at 20.000 – 25.000 transactions per second. Fantoms mission is to provide compatibility between all transaction bodies around the world and create an ecosystem which allows real-time transactions and data sharing with low cost. In this review, I won’t judge, if this new technology is better than traditional blockchains, let’s instead view it as a new approach to solve current problems.
What Problem does Fantom solve?
Scalability of Blockchain platforms remains one of the biggest challenges we are facing, especially in areas where mass user adoption and utilization of these platforms by enterprises and governments is the goal. In existing blockchains, all nodes verify and store a single block at a time, leading to more extended time in creating blocks and limitations in block size. Therefore, no matter how many nodes are connected, the performance will be limited by the speed of each node. Fantom aims to solve this problem.
Another aspect is Fees. Fantom believes that current fees are prohibitively expensive for a scalable and enduring blockchain with a thriving ecosystem of users and applications. The Fantom OPERA Chain is intended to solve the scalability limitations of existing blockchain with the Lachesis Protocol. We will take a closer look at how exactly this technology operates, in the next section of this report.
Fantoms value proposition focuses on reducing costs, increasing transparency and executing hundreds of thousands of transactions per second. Fantom has the intention of being used on a large scale in various industry verticals. The Fantom Foundation intends to create the Fantom platform along with a Smart Contract-based ecosystem that can be used by all current and future partner companies. They envision future use cases for their product in a multitude of sectors including smart cities, Public Utilities, Smart Living, Health care, Education, Resource Management and Environmental Sustainability and many more. With DAG Based Protocols such as Nano and IOTA seeing big success due to their ability to scale, Fantom could become a prime candidate for the same rate of adoption. Combining DAG technology with Smart Contracts could not only solve current problems but also open up for new opportunities in terms of technology and use cases. I have listed four main benefits below:
Instant settlements-The smart contracts within FANTOM platform will execute asynchronously and with instant confirmation.
Low fees-the transaction fees stand at below 0.01 USD for the users within the platform
Infinite Scalability-unlike blocking-based smart contracts, FANTOM will offer a seamless ecosystem that will not experience lag or downtime.
The open-sourced-FANTOM platform also promotes transparency by allowing users access to all transactions.
Product and Vision
The Fantom architecture is divided into three layers. The bottom layer is known as the OPERA Core Layer. This layer is responsible for creating events and maintaining consensus across all nodes through their Lachesis Protocol. All event blocks can be created asynchronously from nodes, meaning, a single event block verifies the previous transaction, and transactions are verified without being approved by the miners as in traditional blockchains. Thus, an increased transactional load will not lead to delayed approval or bottleneck effects. Similar to a blockchain, transactions are saved on each node in the network, though data is not required to be kept across all nodes. To validate transactions, a second type of node is employed, called the witness node. Witness nodes check validity across all nodes on the network. These nodes rely on Delegated Proof of Stake to elect validators. This DAG system results in blocks being completely removed from transactions and does away with the need for miners.
The middle layer is called the OPERA Ware Layer, and will provide the functionality for payments, issuing rewards, incentives, and other data. Lastly, the top layer, which is called the OPERA Application Layer, will provide APIs for other parties to use features of the OPERA Ware Layer. The Lachesis Protocol enables a consensus system for the decentralized network. The scope of how decentralized the platform is, cannot be determined at the moment, because it depends on the node system, and at this point, there is little information on the number of system nodes, who will operate them, or where they will be located.
Fantom has a very large team so that we will only focus on four key roles here. The founder is Dr. Ahn Byung Ik. Dr. Ahn holds a Ph.D. in computer technology from Yonsei University and is President of the Korea Food-Tech Association. Dr. Ahn’s record of previous successes in the startup world is notable. In 1998, he established an area based service business called Point-I which he then offered after IPO. Once again, in 2010, Dr. Ahn established food-tech platform SikSin(much like Yelp) which has reached 1 million+ downloads. Judging by this background the lack of knowledge about Blockchain technology might be a bit worrying, though.
The COO Bob Tucker has more than 25 years of experience handling companies for leading banks and property supervisors, consisting of Barclays Capital, Bank Austria Creditanstalt, Male Investments, and ANZ Bank.
Their CMO ake Choi acts as Chief Financial investment Officer at Digital Currency Holdings. He has a history in the financial services market through previous functions such as Security Expert for the Digital Currency Group at Capital Markets CRC and as Vice President of Sales with digicash.
The CIO Michael Kong previously worked as Chief Technology Officer at Digital Currency Holdings. Before that, he was a developer for Block8, where he developed blockchain-based applications an led a team of external web developers.
The group seems business-minded and has built companies with large user bases before. The team and advisory board really stand out here. With 14 foundation members, 15 platform developers and 15 advisors, Fantom has some serious talent and a wide range of experience behind It. With the majority of their large team having extensive experience in blockchain, the financial sector, and their target audience.
I believe that one of the main metrics to determine the success of a blockchain is usage and partnerships. The website lists the South Korea Food-Tech Association as a partner, which includes the top 90 leading companies in the 200 billion dollar food industry. Fantom will provide dApps that can be used for food reservations, geolocation delivery services, and supply-chain management, but this is just one of many use cases that Fantom has planned. Fantom also partnered with Oracle Korea. The team has specified that Oracle is interested in Fantom’s technology, details of this partnership are not clear yet.
Tokenomics: What is the FTM Token?
The FTM token is used primarily for staking and to reward witness nodes participating in the validation of the network. FTM tokens will also be used for incentivization schemes to reward users and attract contributors to the platform. FTM will at first be provided as an ERC20 token up until the launch of their mainnet in Q3 2019. The demand for FTM tokens should increase as more users join the network and more transactions being made on the network. The total supply is 1.987.133.655 FTM.
Growth potential and Roadmap
I believe Fantoms’s development plan is realistic, and it offers several events and releases throughout 2019, leading up to Q2 2020. Not many projects have long term plan like that. The team is focused on the long term goal of creating a platform that rivals the current leaders. By taking their time, they can evolve the network’s capabilities and develop solutions for problems that exist now and problems that may exist in the future. Judging by the information available, Fantom’s team is aware of the fact that it will take several years before the product will be fully functional and become competitive enough to reach mainstream adoption.
DAG based Smart Contract platforms are becoming more and more sought after as networks such as Ethereum start to show their limitations. As I said in the introduction to this report, DAGs arent better or worse than traditional blockchains, they are simply an alternative. Time will tell which technology will be implemented on a bigger scale and for what purpose it will be used.
Fantom falls into the Blockchain 3.0 category, and as a result faces competition from platforms that seek to address current blockchain scalability issues such as IOTA, Nano, EOS, Cardano, and Hashgraph. Fantom has some serious ground to cover in regards to the competition currently operating in this space.
The team is clearly taking their time to make sure they will be able to deliver on their promises. While this is a great attitude and goal, they also risk being left behind in terms of adoption. If DAGs succeed, we could see a similar situation as we’ve seen with Ethereum before, where one large platform takes the majority of users, because they are the first mover. On the other hand, Fantom is aggressively securing large partnerships, which will ultimately lead to adoption if they manage to build a reliable platform. As a project based in Korea, Fantom could arguably maintain a hold on their domestic market via the connections of Dr. Ahn and others on the team possess. Nonetheless, this is not a guarantee.
That being said, if Fantom is able to deliver on the promise of high TPS and leverage their industry domain toward enterprise adoption, I see the possibility for a path to actual use. I think Fantom has a team with the right mixture of blockchain expertise and industry domain, strong connections and partnerships and a very promising technology but in the end, it all comes down to one question: Will they be able to deliver a more superior platform compared to what is available today?
FTM scored 55 out of 76 Points in our evaluation program.