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Official site fantom.foundation Explorer ftmscan.com Source code github.com/Fantom-Foundation

What is the Fantom network?

Back in 2020, the so-called ‘DeFi summer’ saw an emergence of crypto projects that aimed to enhance the decentralised finance (DeFi) ecosystem. During the influx of many DeFi projects, the team behind the Fantom crypto network found out that particular aspects of blockchain technology limited the functionality of decentralised finance protocols.  

Fantom presents a Directed Acyclic Graph-based smart contract platform for decentralised applications (Dapps). As stated by the Fantom team, it is a decentralised, highly scalable, open-source and permissionless platform used to build Dapps.  

In contrast to blockchain technology, the Directed Acyclic Graph (DAG) technology resembles a graph; networks are made of vertices and edges. The result is that crypto transactions come in the form of vertices and are stacked on top of one another. 

Fantom operates on top of this technology to address the shortcomings of other blockchain platforms, along with a novel version of the Proof-of-Stake (PoS) consensus mechanism known as Lachesis.

If you want to learn more about consensus mechanisms, why not read this article: 'Proof-of-Stake vs Proof-of-Work: Is PoS better than PoW?'.

The native cryptocurrency of the Fantom network is the FTM token. It is mainly used for processing transactions, staking, voting and paying network fees.

Does Fantom solve the blockchain trilemma?

According to the core team, Fantom solves the blockchain trilemma. The blockchain trilemma refers to the inability to maintain a balance between security, decentralisation, and speed at the same time.  

Fantom claims to solve this issue by using a unique set of technologies. The team claims that Fantom’s DAG-based asynchronous Byzantine Fault Tolerance (aBFT) algorithm outperforms the Classical and Nakamoto models as being a more scalable and secure alternative that enables developers to create peer-to-peer apps. 

In simple terms, it has been claimed that Fantom solves this due to its novel Lachesis consensus mechanism which provides a high degree of speed while maintaining a substantial level of security and decentralisation.

How was Fantom developed?

Fantom was created back in 2018 by Ahn Byung Ik, a computer scientist from South Korea well-known for the founding of the Siksin restaurant review platform in 2010.  

Ahn Byung Ik served as the CEO but stepped down in 2019; he left the company in the hands of Michael Kong, a software developer experienced in creating Ethereum-based smart contracts. 

Fantom launched its mainnet in December 2019. The team managed to garner financial backing from several venture capital companies. 

Apart from the founder, we can single out another prominent member during Fantom’s early days. Andre Cronje, the founder of Yearn Finance, served as an advisor to the Fantom team, and brought to the table technical knowledge of the inner operation of DeFi to the Fantom ecosystem.

Andre Cronje stated that he never left Fantom; due to receiving bad press, he thought it would negatively impact Fantom. 

Fantom was one of several crypto projects rocked by the decision of Andre Cronje and Anton Nell until they decided to leave the DeFi space in the beginning of 2022.


What is the Fantom Foundation?

The Fantom Foundation presents a non-profit organisation dedicated to developing the Fantom blockchain platform. It was founded in 2018 by Ahn Byunk Ik; even though it is headquartered in Singapore, the foundation includes a team of engineers and developers from across the world.  

The main vision of the Fantom Foundation was to create a strong ecosystem suitable for Dapps on the Fantom blockchains. It has managed to achieve notable partnerships such as Beethoven X, SpookySwap and Tarot. Fantom aims to provide an efficient platform for building and deploying smart contracts and Dapps, with a focus on community and partnerships to drive adoption.

What about governance rules?

Fantom utilises on-chain governance; the voting is entirely on-chain and decentralised. One FTM token equals one vote. Therefore, governance rights are available to all FTM holders that stake their tokens. Each proposal submission costs 100 FTM tokens that will be burned during the operation. Voting costs just a transaction fee which is a very small fraction of 1 FTM coin. 

Fun fact - users are enabled to vote with a simple yes or no or express the degree of agreement with the proposal. For example, 0 refers to disagreement, and 4 means full agreement. Each proposal includes multiple options.

The 2023 Fantom Foundation hack

On 17 October 2023, hot wallet assets of the Fantom Foundation were drained due to reportedly a zero-day vulnerability on Google Chrome. The incident resulted in an overall loss of 4,510.48 ETH across multiple crypto wallets, worth approximately $7 million.  

While early reporting of the security breach pointed to the exploitation of a vulnerability in Google Chrome, the report also points to a compromise of private keys

Allegedly, the breach presented a sophisticated strategy involving coordinated phishing scams, social engineering tactics, or the dissemination of malware which added up to the unauthorised acquisition of private keys of the Foundation’s employee.


The team has acknowledged the network security incident and claimed that approximately $550K was stolen from the Foundation which amounts to less than 1% of its overall assets. It further claimed that the majority of stolen funds belonged to a certain employee. 

Unique features of Fantom (FTM)

Fantom’s utility can be understood in the context of the so-called Layer 1 wars. Until Ethereum native DeFi applications find a better solution, it is considered slow and expensive to use. Users who want to make the most of the DeFi space in a short period of time may find it not suitable enough. Fantom is one of many blockchain networks built to provide an alternative to Ethereum

Fantom aims to reach the goal of 300,000 TPS, but what makes it stand out on the crypto market is its time-to-finality. As claimed by the Fantom team, the project’s time-to-finality for each transaction is somewhere between one and two seconds.  

Due to Fantom’s vision to resolve the blockchain trilemma, scalability is complemented by a high degree of network security. The Fantom network utilises a novel PoS consensus mechanism, along with a zero tolerance policy regarding validators’ potential errors.  

Compared to other distributed ledger technologies, Fantom stands out with its sustainability. In other words, Fantom’s energy usage is fractional when compared to some of its market competitors due to the DAG structuring technology that enables the Fantom blockchain to operate with small energy consumption. 

The underlying technology for crypto-based smart cities

Finally, an interesting feature about this project is that it creates potential for crypto-based smart cities. As stated by its core team, Fantom could provide the architecture to resolve typical problems such as power outages and storing large amounts of data. 

Fantom announced its vision to become a nervous system for smart cities. It aims to implement a data sharing network that links every aspect of existing solutions in everyday life. The team claims that this could be managed by connecting IoT devices and service providers. 

For example, electricity outages would be sensed with repair services notified immediately through smart contract technology. Fantom aims to fix traffic congestion as well by coordinating interconnected autonomous vehicles with the traffic network.

Disadvantages of Fantom (FTM)

Even though Fantom comes along with promising underlying technology and real-world use cases, it suffers from several drawbacks. The project is still relatively small and less known compared to its competitors on the crypto market. 

Even though Fantom declares itself as an alternative to Ethereum, it is preceded in TVL by several well-known blockchains or Layer 2 solutions. Critics claim that all these chains encompass the same level of scalability as the Fantom blockchain does. Additionally, Ethereum has made a big step by migrating to a PoS consensus mechanism and establishing scalability. 

Critics like to point out that the Fantom protocol suffers from a substantial amount of centralisation concerning the requirements of becoming a validator and the nature of its governance structure. 

In simple terms, validators need to have a broad amount of FTM tokens staked to run a node. This makes it costly for ordinary users to become validator nodes. In the beginning of 2023, it was established that Fantom encompasses less than 100 validators of which 5 controlled the majority of the network. 

When it comes to the governance model, the design and role of the Review Board were heavily criticised. Critics stated that the Review Board serves as an entity with absolute vetoing power.

How does Fantom work?

Apart from the decentralisation objective, Fantom was built around 4 core principles – modular architecture, scalability, security, and open-source. To achieve these goals, Fantom utilises a few technological components. Let’s check them out. 

Directed Acyclic Graph (DAG)

The Fantom network partly attains its speed through the Directed Acyclic Graph (DAG) technology where blockchain transaction histories are displayed as a hashgraph or a graph of blockchain hashes.

As mentioned earlier in this article, DAG refers to a data modelling and structuring technology whose networks comprise vertices and edges, unlike blockchain networks, which are made up of blocks.

It allows a tokenized digital currency to operate similarly to one based on a blockchain. Computers process transactions simultaneously and share their findings with random sets of neighbouring nodes to validate them. Therefore, DAG nodes are enabled to work in a parallel manner.

Lachesis consensus mechanism

A blockchain like Fantom requires an efficient manner to obtain consensus. Simply put, nodes need to be able to agree that the transactions the network supports are valid before approving them on a distributed ledger. 

Fantom uses a novel Proof-of-Stake (PoS) consensus mechanism called Lachesis that aims to resolve issues such as decentralisation, scalability, and security. In developing the Lachesis consensus mechanism, Fantom prioritised particular aspects.  

For example, Lachesis was created to be leaderless. That means the network relies on a system of nodes rather than a single leader. 

Additionally, Fantom relies on the Asynchronous Byzantine Fault Tolerance (aBFT) system; nodes can reach honest consensus, even if some behave in a malicious manner, and regardless of how many do so. The asynchronous aspect ensures that all nodes don’t have to reach an agreement simultaneously. The Asynchronous Byzantine Fault trait aids Fantom in supporting up to one-third of the malicious nodes.

Fantom Opera chain

The Fantom Opera mainnet was created to be compatible with the Ethereum Virtual Machine (EVM). It refers to a smart-contract-enabled ecosystem that supports multiple decentralised applications (Dapps). 

The smart contract platform supports full functionality via Solidity. As claimed by the project's team, the Fantom network is unique due to being self-contained, meaning that the performance of one area's traffic congestion has no impact on other areas of the ecosystem.

What is the FTM token?

The FTM token is the native token of the Fantom ecosystem. It is used for several purposes such as paying for transaction fees, staking to secure the Fantom network, and as a governance tool.  

As mentioned earlier in the text, validators need to stake a minimum of 500,000 FTM tokens to secure the network. Fantom tokens can also be delegated to network validators to make the reward process more affordable and approachable. 

How to buy Fantom?

Crypto users can easily buy FTM on several well-known cryptocurrency exchanges. After deciding which exchange to use to buy FTM, you can start with the process. 

The whole procedure can take as little as 10 minutes, and all you need is a smartphone or computer, means of payment and photo identification. If you are a crypto novice, take a look at our guide: ‘How to buy crypto’

FTM tokens can be safely stored using wallets such as the Fantom wallet, MetaMask, Ledger and other well-known options of storing crypto assets.

Is Fantom (FTM) a good investment?

Fantom might be a good investment due to its underlying technology, strong community and initial backing by venture capital companies. It is a highly scalable blockchain platform for Dapps, but it is not a risk-free investment. 

Aside from the fact that the crypto market is susceptible to volatility and other kinds of threats, Fantom is an insecure investment like many other digital assets. Always do your own research and never invest more than you can afford to lose.