Fantom: Redefining DeFi with DAG Technology
Introduction
Fantom is a Directed Acyclic Graph (DAG)-based smart contract platform designed for decentralized finance (DeFi) transactions. It addresses the limitations of traditional blockchains like Bitcoin and Ethereum, offering faster transaction times through its innovative approach.
The Lachesis Algorithm
Fantom utilizes a permissionless protocol and the aBFT consensus algorithm, implemented through the Lachesis algorithm. This asynchronous process ensures decentralization and security while expediting transaction processing. The peer-to-peer networking and DAG aBFT consensus mechanism of Lachesis minimize communication overhead, resulting in faster finality compared to synchronous BFT.
Advantages Over Traditional Models
Fantom’s DAG-based asynchronous Byzantine fault tolerance consensus algorithm, Lachesis, outperforms classical and Nakamoto models. The asynchronous nature allows users to process instructions at their own pace, eliminating the need for a designated leader. Additionally, Lachesis maintains Byzantine fault tolerance, enabling consensus even in the presence of problematic nodes.
Payments: Fast and Cost-Effective
The Fantom network’s speedy finality translates to fast payments, taking around a second. With high throughput and low costs (roughly $0.000001), the FTM token becomes an ideal choice for exchanging money. Despite the low fees, Fantom ensures system security by making entry exceedingly costly for malicious actors.
Governance with FTM
FTM plays a crucial role in on-chain governance on the completely permissionless and leaderless Fantom ecosystem. Stakeholders use FTM to vote and propose changes, ensuring a decentralized decision-making process.
Staking on Fantom
Staking on Fantom is based on a proof-of-stake consensus mechanism. Users stake FTM tokens to validate transactions and, in return, receive additional FTM tokens. Staked tokens remain accessible to the owner, allowing for unlocking or unstaking at any time. Stakers and validator nodes must adhere to specific staking parameters.
Staking Parameters:
- Staking Period: Choose between 3 or 12 months for varying reward structures.
- Staking Amount: Stake any number of FTM tokens, with validator nodes requiring a minimum of 3,175,000 FTM.
- Slashing: Malicious or erroneous behavior during consensus may lead to slashing, enforced by a two-thirds validator consensus.
- Rewards: Based on staking amounts and performance during consensus processes, with rewards calculated per epoch.
Conclusion
In the decentralized finance landscape, Fantom emerges as a technological marvel, redefining speed, security, and the potential of DeFi protocols. Its DAG-based platform, powered by the Lachesis algorithm, introduces a revolutionary transactional speed, achieving finality in seconds. Beyond its technological prowess, Fantom embodies a community-driven ethos, emphasizing decentralization, leaderlessness, and transparent governance.
The FTM token not only facilitates rapid and cost-effective transactions but also holds a pivotal role in the network’s governance through a robust voting system. Encouraging participation through enticing staking rewards, Fantom beckons users to contribute to this innovative DeFi ecosystem. In delivering on its promises, Fantom establishes itself as a foundation for the future of financial technology, offering stability, speed, and sustainability.
Disclaimer
FAQ
DeFI stands for decentralized finance, offering open and accessible financial systems built on blockchain technology.
Yield farming involves earning interest by lending or staking cryptocurrencies.
Layer 1 blockchains are the primary networks (e.g., Ethereum), while layer 2 blockchains scale and improve performance on top of them.
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