It makes sense that Fantom has released its own token. The Fantom system allows the use of various protocols, including that of NFTs and DeFi related dApps. The FTM token is therefore used for network security. The token is available on the native mainnet, but also as an ERC-20 and BEP-20 token. Below you can read about all the advantages of the Fantom token.
The token is used to secure the network. You can participate in this by either staking your FTM, or by becoming a validator node. In addition, you can make payments on the entire ecosystem. The protocol charges a very low fee for this. Also, as mentioned earlier, the transaction speeds are extremely fast.
Holders of the FTM coin can also vote for changes on the network. This requires an FTM governance token. So if you are active on the FTM ecosystem, you can hardly avoid it. You will then have to buy some FTM. Since the popularity of this network has grown tremendously in the last year, the price has grown with it.
How does the Fantom consensus mechanism work?
For this purpose, The Fantom Foundation has created Lechesis. Lachesis is Fantom's aBFT consensus algorithm. Simply put, a consensus mechanism is the engine that powers the blockchain. Compared to classical and Nakamoto consensus, Lachesis is a faster, scalable and more secure choice. The aBFT algorithm consists of a strong piece of engineering that allows for several applications.
For example, developer can use Lachesis to build peer-to-peer applications without having to create their own network layer.
The algorithm allows all participants in the network to perform tasks at different times. Thus, it is much more scalable than, say, Bitcoin. In addition, no participant has a special or particular role within the Fantom network. Everyone is basically equal. You could say that the Fantom network employs a leaderless mechanism. Hence, transactions can also be performed within 1 to 2 seconds. There is no need to wait for a block confirmation.
The FTM network has seen a huge surge in the past year as many people realized the large number of advantages of the network. In addition, it has been a problem with Ethereum for years that the transaction fees are too high. For example, at times when you made a transaction worth $50 in Ethereum, you may have had to pay almost $35 in transaction fees. This problem has completely disappeared with FTM.
What is a consensus algorithm?
The consensus mechanism is the core of distributed technologies. In a decentralized environment, where no central party validates transactions, the consensus protocol ensures that all participants in the network reach an agreement: the network as a whole validates transactions in a completely trustless manner. Classical consensus protocols have been around for a long time and have been used in distributed databases since the 1980s.
Asynchronous Byzantine Fault Tolerance (aBFT).
Asynchronous Byzantine Fault Tolerance is the highest standard of consensus algorithms. It solves the blockchain Scalability Trilemma, according to which only two of the following three components are possible at once: decentralization, security, and scalability. Fantom uses a DAG-based aBFT consensus algorithm. They have called this system Lachesis. Lachesis is asynchronous and leaderless.
Lachesis is designed to easily plug into applications written in certain programming languages. So developers only need to focus on building applications on the FTM network.
Lachesis then connects to other Lachesis nodes and guarantees that everyone processes the same commands in the same order. In short, a complete ecosystem which is alive and well and can process transactions quickly and securely.
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