Fantom Could Be a Protagonist in Decentralized Finance

Fantom (CCC:FTM-USD) is a blockchain platform for decentralized finance (DeFi), cryptocurrency decentralized applications (dApps), and enterprise solutions.

The Fantom (FTM) crypto logo on a black background
Source: shutterstock.com/ARTEMENKO VALENTYN

Back in January 2021, Fantom was trading around $0.026. By November 2021, it surged to $3.16. The latest closing price was $2.93. However, the price of any cryptocurrency is not the main factor in deciding whether it is a good investment or not. The underlying fundamentals such as utility, scarcity, scalability, transaction speeds, security, and interest of investors matter to move cryptos.

What are some Fantom key facts you should know?

Fantom Statistics

Fantom coin (FTM) has a current CoinMarketCap ranking of 27, a circulating supply of 2.54 billion FTM coins, and a maximum supply of 3.175 billion FTM coins. The 1-year low and high prices have been $0.0237 and $3.48, respectively. The market capitalization is $7.19 billion and the circulating supply is 80%.

Investors can buy FTM coins on several crypto exchanges such as Binance (CCC:BNB-USD), OKEx, Mandala Exchange (CCC:MDX-USD), FTX Token (CCC:FTT-USD), Gate.io, Gemini Dollar (CCC:GUSD-USD), Bitfinex Bitcoin Dominance Perps (CCC:BTCDOM-USD), Crypto.com Coin (CCC:CRO-USD), and Huobi Global.

Fantom Main Features

Fantom focuses on performance and more specifically on speed, security, reliability, and scalability. What makes Fantom interesting is that is it’s a “directed acyclic graph (DAG) smart contract platform providing decentralized finance (DeFi) services to developers using its own bespoke consensus algorithm.”

DAGs use vertices and edges and in contrast to blockchain technology, there are no blocks. How are transactions recorded, then? The answer is that instead of blocks, transactions are recorded in the form of vertices, and more specifically, on top of each other.

However, like blockchain technology, the transactions are submitted to the DAG by nodes. In addition to this, a node must complete a Proof-of-Work (PoW) task to submit a transaction.

There are two main disadvantages of DAGs. First, they are not fully decentralized, as compared to blockchain technology. Second, they are still under early development, or what even may be argued as in their infancy. This infancy is not a total drawback as it could simply mean the dynamics of the network have just started and they are different from other common blockchain applications.

The main benefit of DAGs is higher transaction speeds. There are also very low transaction fees due to the lack of miners and they are more environmentally friendly than other cryptos.

Fantom is centered around providing smart contract capabilities and its consensus protocol named Lachesis. Lachesis is an asynchronous byzantine fault tolerance (ABFT) consensus algorithm that provides high-quality features such as faster, more scalable operations, with top security being a high consideration.

The Lachesis protocol is asynchronous, leaderless, Byzantine fault-tolerant, and final. What these features mean is that transactions are made in either one or two seconds. There is a high degree of freedom for users of Fantom’s network by having the ability to operate commands at various times.

Fantom has many uses that are part of its ecosystem. These include staking to earn rewards, taking an active role in its governance by proposing and voting on changes, paying network fees, and other payments with FTM coin.

Fantom Ecosystem

Fantom is growing fast, having thousands of active users and more than 80 dApps already being brought into action. These dApps include lending and borrowing, yield optimizers, non fungible token (NFT) platforms, and cross-chain bridges, among other tools.

Fantom has the potential to become a key DeFi player. Its broader acceptance by developers will be critical for its growth. This means that despite its merits, it will be a volatile coin. Monitor it as it develops further with all the high risks of the cryptocurrency market.

Does it deserve to have a market capitalization of over $7 billion? To me, it seems like a very elevated valuation. Its revolutionary protocol, however, may make a difference and contribute to its success and adoption.

On the date of publication, Stavros Georgiadis, CFA  did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/01/fantom-could-be-a-protagonist-in-decentralized-finance/.

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