Advantages and disadvantages of Fantom (FTM) [Blockchain]

Fantom is a platform for the development of smart contracts and decentralized finance based on DAG technology. It is an open source and permissionless decentralized platform that does not use blockchain technology. This means that it is the vigilance of different teams who agree on the validation of a transaction.

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Advantages and Disadvantages of Fantom (FTM)

The Fantom network uses the Proof of Stake-like consensus protocol called Lachesis. This has the particularity of being a consensus layer extensible to other layers of the ecosystem itself, i.e. it provides additional security to the possible blockchain to be incorporated.

Delving a little deeper into Lachesis, it is an aBFT or Asynchronous Byzantine Fault Tolerance consensus algorithm, based on DAG.

For faster, near-instantaneous and zero-cost transactions, DAG technology gets rid of standards in predefined block sizes. This means further increasing the speed of transaction execution and reducing the number of confirmations.

The method that follows is to store the data on the blockchain via Byzantine Asynchronous Fault Tolerance. This allows nodes to confirm blocks without relying on any assumptions regarding time.

Each new blockchain introduced over the Fantom protocol is independent, although they are connected to Lachesis. In this way each blockchain can interact with other blockchains.

Advantages of Fantom (FTM):

  • Speedy transactions. Up to 300,000 transactions per second are possible thanks to DAG technology. Transactions can be performed faster, as the node does not need data from previous transactions, which is the case with the blockchain.
  • Reduced transaction costs. the price of payment for a transaction is really reduced, with values below one cent of a dollar, specifically 0.00001 dollars.
  • High-speed transaction finality. The confirmation and completion of the operation takes between one and two seconds, a very small value and more if we compare it with the most important networks, Bitcoin 1 hour and Ethereum 10 minutes.
  • Mononkey, a very small value and more if we compare it with the most important networks, Bitcoin 1 hour and Ethereum 10 minutes.
  • Stable currencies in the network, since the model allows the exchange for stable currencies such as USD (US dollar) with an exchange rate of 1-5.
  • Interoperability, it is compatible with Ethereum virtual machine (EVM). which allows migration of popular applications on Ethereum to the Fantom network.
  • Application developer incentive system. In this way the network makes sure to grow with new projects every time.
  • System of incentives for application developers.
  • Tiered governance system, i.e., unlike other platforms, decisions are made with a yes or no, while in Fantom projects are voted from 1 to 4.

Disadvantages of Fantom (FTM):

  • Limited access for validators. The amount of FTMs to block in order to be a validator node is 1 million FTMs. A high amount considering the capitalization of this currency. Still anyone can earn rewards by delegating their assets to a trusted validator, one FTM is enough.
  • Low security compared to the Block Chain system. Unlike most of the networks with block chain technology where they work to solve the problem of 51% in the DAG system it is enough to own 1/3 of the network to be able to act maliciously.
  • Low security with respect to the Block Chain system.
  • Inflationary model. An initial inflation rate of 5% per year is expected. This will decrease as more users join the network. 20% of the total inflation will be allocated to nodes and incentives for platform users.