Fantom (FTM) is quite an ambitious project that is trying to create a smart contract platform that will be the “nervous system for smart cities”.

Using advanced Directed Acyclic Graph (DAG) technology, this project aims to provide near infinite scalability and instant transactions at nearly zero cost. They are also working on a high-performance virtual machine with safe, secure smart contract execution.

However, can they really execute on such ambitious goals?

In this Fantom review, I will give you everything that you need to know about the project. I will also analyse the long term use cases and adoption potential of the FTM tokens.

What is Fantom?

Fantom is distributed ledger technology stack that is building a DAG based platform that could be used to power smart cities and all the services that constitute it.

Fantom Technology Use Cases
Use cases for Fantom’s Technology

As an ultra-high speed and high-performance platform, Fantom believes it can become the IT infrastructure backbone for the emerging smart cities. With a goal of executing 300,000 transactions per second, and the ability to communicate across multiple service providers, Fantom believes it is the solution to storing vast amounts of data securely.

It hopes to achieve this by being accessible to stakeholders for smart city data-driven smart contracts and dApp adoption. The Fantom team envisions the platform being used across a wide variety of sectors, including public utilities, smart home systems, healthcare, education, traffic management, resource management, and environmental sustainability projects.

Fantom Technology

Fantom’s architecture has the protocol divided into three layers, with each layer handling different responsibilities. These are the Opera Core Layer, the Opera Ware Layer and the Application layer.

Let’s take a deeper look into each of these layers and what they do for the Fantom protocol at large.

The OPERA Core Layer

This is the bottom layer and it has the responsibility for maintaining consensus across the nodes in the Lachesis Protocol. It is also responsible for creating events. It uses a DAG to confirm transactions, and nodes are able to process them asynchronously thanks to the use of DAG technology.

Each transaction processed is saved on every node in the network, similar to the way a blockchain saves transactions. The difference is that with DAG technology the data isn’t required to be saved on every single node.

Fantom Technology Stack
Visual Representation of Fantom Technology Stack. Image via Executive Summary

Instead, the network uses a second type of node called a witness node to validate transactions. These witness nodes are responsible for checking the validity of the data held by nodes across the network. The witness nodes are reliant on a Delegated Proof of Stake consensus method to elect validating nodes.

The OPERA Ware Layer

The OPERA Ware layer sits in the middle of the protocol and is designed to execute functions on the platform such as issuing rewards and payments and writing “Story Data.”

The OPERA Application Layer

At the top is the OPERA Application layer, which holds the publicly available APIs that developers will use to allow their dApps to interface with the OPERA Ware layer. One particularly interesting interaction will be with what Fantom refers to as “Story Data.”

Story Data is Fantom’s method for allowing all past transactions to be tracked, unlike Ethereum where tracking past transactions is limited. In Fantom each transaction and smart contract execution stores a small piece of data, the Story Data, that is used in functions for tracking transactions.

This is an incredibly valuable function in certain sectors where indefinite records of data are essential, such as in supply-chain management or the healthcare field.

The Fantom Team

The team behind Fantom has gone through some changes since its earliest days, and the technical team is comprised of 11 platform developers. There are additionally two team members working on partnerships and an additional 2 technical advisors, besides the four management members.

The founder and CEO of Fantom is Dr. Ahn Byung Ik. He holds a Ph.D. in computer science and is also the president of the Korea Food-Tech Association. Dr, Ahn is a contributing author at Fortune magazine and has frequently been published in South Korea’s major business media outlets.

Previously he was the founder of the food-tech platform SikSin, which is similar to Yelp. That platform has over 22 million monthly page views and the mobile app has been downloaded over 3.5 million times.

Fantom Team Members
Some of the Fantom Team Members

The Chief Information Officer of Fantom is Michael Kong, who has several years experience in the blockchain space as a smart contract developer. Prior to joining Fantom, he was the Chief Technology Officer for the blockchain incubator Block8. He also built one of the first Solidity decompilers and one of the first detectors for vulnerabilities in smart contracts.

The rest of the team consists of highly successful, motivated and experienced members from a variety of disciplines including finance, cryptography, business development, software engineering and architecture and other related disciplines.

Fantom Community

When it comes to adoption of a cryptocurrency, one of the most effective methods to create awareness is through an active and engaged community. Therefore, I often like to dig into this and see how enthusiastic they really are.

The Fantom Foundation has an official Twitter account with just over 15k followers. The team is active on their Twitter and their followers appear to be quite engaged with their tweets.

Then, they also have an English Telegram channel with over 18k members. I dived into it to get a sense of the discussion and they appear to be quite active. The discussion appears enthusiastic and more technically minded (less of the “Moon boys”).

Fantom Telegram
The Fantom English Telegram Channel

There is also a Facebook account but this has far less engagement as there is on Twitter or Telegram. There are currently 915 likes and the last that it was updated was back in October of 2018.

Of course, it is worth mentioning that these are only the English speaking social channels. You also have their Korean and Chinese communities that they interact with through different social networks and messaging apps.

FTM Token Overview

The FTM token is an ERC-20 token that is used for staking and to reward Fantom witness nodes. There are also plans for using FTM tokens as rewards for users and to attract contributors to the Fantom platform. There are also plans to issue a native FTM token once the mainnet is launched, at which time the ERC-20 FTM tokens will be exchanged for native tokens and locked on the platform.

Fantom held their ICO in June 2018, selling 40% of the total supply of 3,175,000,000 FTM tokens. The ICO price was $0.04306 and the team raised $39,650,000 in the ICO.

Unfortunately, it took several months for the tokens to actually be issued, and by that time (October 2018) the market was deep into bear territory, which led to an initial price around the $0.02 level, or half of the ICO price.

FTM Price Performance
FTM Token Price Performance. Image via CoinMarketCap

And because it was deep in the midst of the bear market in cryptocurrencies the price headed lower still from there, finally reaching an all-time low of $0.003105 on February 4, 2019. Price began recovering from there, rising more than 200% over the next three months.

And in the meantime, Fantom issued BEP2 tokens on the Binance chain to increase interoperability by creating a multi-asset cross-chain ecosystem. This also saw the listing of Fantom first on the Binance DEX and several days later on the main Binance platform.

The listing created a surge in the price of Fantom that saw it gain over 300% in the space of a month and reach its all-time high of $0.039614 on June 11, 2019. In the following week, price pulled back by roughly 30%, even though the broader market remained strong, and at this point, it’s uncertain where the price will be headed next.

Buying & Storing FTM

FTM is listed on a number of different exchanges. These include the likes of Binance, KuCoin, BitMax, BiteBTC and a few others. However, about 60% of the trading volume is currently taking place on Binance.

For a coin of this size in Market Cap, there appears to be high levels of trading volume. Perhaps this is to do with the recent listing of the token on Binance as more traders try to get their hands on FTM. Either way, this is a positive step for the liquidity of the coin and means that large block orders can be executed with little slippage.

Binance FTM
Register at Binance and Buy FTM Tokens

Once you have bought your FTM tokens then the wise move would be to get them off the exchange and into a secure wallet. Because there are now two versions of FTM you need to know which version you’re buying when deciding what wallet to store the coin in.

The older and more prevalent ERC-20 token can be stored in any ERC-20 compliant wallet, such as MetaMask or MyEtherWallet / MyCrypto. The new BEP-2 token needs to be stored in a Binance chain wallet, which you need to create before you can use the Binance Bridge to convert the ERC-20 tokens to BEP-2 tokens.

Fantom Development

One of the most important considerations for me when it comes to the progress of a project is the amount of work that has been done on the protocol.

Although this can sometimes be hard to fully assess, one of the most effective estimates is to look at their public code commits. Therefore, I decided to jump into the Fantom GitHub to take a look at the amount of code commits for their top 3 most active repos.

GitHub Commits for Fantom
Code Commits to chosen repos over past 12 months

As you can see, the developers have been quite active over the past year. This is more commits than have seen on other projects at similar stages in their roadmap. It is also worth pointing out that there are a further 51 repos in their GitHub.

Indeed, if you take a look at their roadmap as laid out in their whitepaper, this development activity makes sense. We also have a great deal to look forward to over the next year. These include:

  • Q3 2019: Operetta Mainnet launch
  • Q2 2020: Global Expansion of the Platform, System Model Expansion and establishment of the Fantom Council

The team is also quite active when it comes to updating the Fantom commmunity about development progress. In their official blog they have “technical updates” that give short summaries of what was achieved in the most recent period.

Conclusion

Fantom is not the only project to choose DAG technology as the path to scalability. IOTA and Nano were some of the first DAG based projects, and both Constellation and Hedera Hashgraph have a similar architecture to Fantom in their use of smart contracts. Fantom, Constellation and Hedera all remain on testnets currently, and it will be a race to see which can launch their mainnet first.

Fantom promises to add value through its addition of infrastructure supporting smart contracts and dApps, which could give it a leg up over projects like IOTA and Nano, which didn’t launch with smart contract functionality, although IOTA now has a separate layer that provides smart contract functionality. The solid performance of the IOTA token gives hope that investors will also see the value in Fantom.

There’s also speculation that Fantom can control the market for smart cities in South Korea, given the links to the market that the Fantom team possess. Of course, this isn’t guaranteed, and Fantom will need to progress and deliver on its promises to maintain the partnerships already forged. If they can do that they shouldn’t have a problem keeping their grip on the South Korean market.

Delivering high transactions per second and low fees is certainly helping Fantom increase its acceptance in some industries and will push it closer towards enterprise adoption.

Of course, enterprise adoption is the goal of many blockchain projects, and the question of when such adoption might become a reality remains open for Fantom along with all the others.

That said, the Fantom team appeas to have the expertise, knowledge and drive to become successful, not to mention the industry connections that should help them maintain a solid grip on the South Korean industries being targeted by the technology.

Featured Image via Fotolia

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

Posted by Steve Walters

Steve has been writing for the financial markets for the past 7 years and during that time has developed a growing passion for cryptocurrencies.