What is Fantom (FTM): uncovering the Sonic migration catalyst

As one of the original Layer-1 blockchains in the crypto space, Fantom has been through numerous highs and lows since its introduction in 2018. Despite nagging adoption concerns, co-founder Andre Cronje and the non-profit Fantom Foundation have seemingly managed to raise Fantom from the ashes thanks to the hype surrounding Sonic. With its Sonic rebranding, Fantom has managed to position itself as a major contender in the blockchain world thanks to its improved scalability.

Will this Fantom-to-Sonic migration be the catalyst needed to ignite widespread adoption? From covering the basics of the Fantom blockchain to highlighting the potential improvements that come with the Sonic network upgrade, here's everything you'll need to know when grasping the topic of what Fantom is and what its FTM coin is all about.

TL;DR

• Fantom is a high-performance Layer-1 blockchain designed for fast, low-cost transactions that operates on the Opera mainnet with its unique Lachesis consensus mechanism, offering high-throughput, fast transaction finality, and low fees.

• The Lachesis consensus mechanism combines asynchronous Byzantine Fault Tolerance with Direct Acyclic Graph architecture to offer high scalability, fast transaction finality, and enhanced security.

• Developers can easily port existing Ethereum projects to Fantom thanks to its Ethereum Virtual Machine compatibility. This opens doors to faster speeds and lower costs without rewriting code.

• The upcoming Sonic migration promises to boost scalability with the Fantom Virtual Machine (FVM), increasing the transaction throughput to 2,000 TPS while maintaining decentralization and security.

• While FTM remains central for staking, governance, and fees, the 'S' token will be Sonic's native token, providing optimized cross-chain capabilities and faster, more cost-effective transaction processing once the Sonic mainnet goes live.

What is Fantom?

Fantom is a high-performance Layer-1 blockchain platform built on a Directed Acyclic Graph (DAG) architecture designed to provide fast and low-cost solutions for decentralized apps (DApps) and digital assets. Out of the various Layer-1s, Fantom stands out from the crowd with its unique Lachesis consensus mechanism that provides near-instant transaction finality and low fees. Currently, Fantom runs on the Opera mainnet, which acts as the foundational blockchain network that powers the Fantom ecosystem. Recently, the hotly anticipated Sonic migration has contributed to much of the recent discussion around Fantom as traders and DeFi users are excited for what's to come.

Understanding Layer-1 blockchains

Fantom operates as a Layer-1 blockchain, which means it’s a standalone blockchain that processes transactions and data on its own network. Unlike Layer-2 solutions, which sit on top of existing blockchains like Ethereum, Layer-1 blockchains aim to resolve issues such as high fees and slow transaction speeds by offering their own base infrastructure. In the world of Layer-1 blockchains, Fantom competes with projects like Solana and Sui. What sets Fantom apart is its focus on providing high throughput and scalability without the high costs typically associated with decentralized networks.

The history and evolution of Fantom

Launched in 2018, Fantom set out with a clear mission: to overcome the issues of scalability, speed, and security that plague many existing blockchains. It’s the brainchild of South Korean computer scientist Dr. Ahn Byung Ik, whose goal was to create a blockchain that could achieve high performance without sacrificing decentralization or security. In 2019, Ahn left Fantom's future in the hands of the Fantom Foundation and its leaders, Michael Kong and Andre Cronje. Over the years, Fantom has gained recognition thanks to the numerous technological advancements introduced by the Opera mainnet. Of these achievements, its Lachesis consensus mechanism stands out and sits at the core of its architecture.

How does Fantom work? Explaining the Lachesis consensus mechanism

As previously mentioned, Fantom was originally created to solve the blockchain trilemma of balancing scalability, security, and decentralization. Fantom claims to achieve this balance through its unique Lachesis consensus mechanism, which allows it to confirm transactions in mere seconds with a high degree of security.

To break down how Fantom's Opera mainnet works, we'll explain its various components and how they all come together to form the scalability powerhouse that is the Fantom blockchain. In short, Lachesis combines asynchronous Byzantine Fault Tolerance (aBFT) with its DAG architecture. To fully grasp Lachesis, let's first break down its core components.

• Directed Acyclic Graph: Unlike traditional blockchains that use a linear chain of blocks, a network with a DAG architecture creates a data modeling environment that allows for multiple blocks to be added to the network simultaneously. This enables faster transaction processing and reduced latency.

• Asynchronous Byzantine Fault Tolerance: The aBFT consensus algorithm makes sure that the network can operate reliably even if some nodes are malicious or faulty. It achieves this by allowing nodes to independently verify the validity of transactions and reach consensus without requiring direct communication in real time.

How Lachesis works

In the Lachesis mechanism, each node creates an event that includes its transactions and references previous events and blocks in the DAG. These references form a DAG, where each event and block has a unique position in the network.

When a node receives a new block, it verifies its validity by checking for transaction validity, where the network's node ensures that the transactions included in the block are valid and don't violate any network rules. The node also checks that the block references previous blocks correctly, and that the DAG remains acyclic.

Once a block is deemed valid, the node adds it to its local copy of the DAG, where it's immediately confirmed. Over time, as more blocks are added to the network, a consensus emerges about the correct order of transactions. This consensus is achieved through a process called topological ordering, which determines the correct sequence of blocks based on their dependencies.

Key advantages of Fantom

• High scalability: The DAG architecture allows for parallel processing of transactions, enabling Fantom to handle a large number of transactions per second.

• Fast transaction finality: Lachesis provides near-instantaneous transaction confirmation, reducing waiting times for users.

• Security: The aBFT algorithm supports the network's resilience against attacks, even in the presence of malicious nodes.

• Decentralization: Lachesis promotes decentralization by allowing nodes to reach consensus independently, reducing reliance on a central authority. This is also what’s meant when some blockchain experts mention that Lachesis is "leaderless", since no single node has more influence in proposing or validating blocks.

Overall, Lachesis is a powerful consensus mechanism that underpins Fantom's performance and security. Fantom's combination of DAGs and aBFT enables rapid transaction processing, high scalability, and enhanced resilience. This sets it apart from traditional blockchains, which often experience slower transaction speeds and higher fees, especially during periods of high demand where there tends to be cases of blockchain congestion. Additionally, Fantom is also compatible with the Ethereum Virtual Machine (EVM), meaning that developers who build on Ethereum can easily deploy their applications on Fantom, benefitting from its faster speeds and lower costs.

What is FTM?

FTM is the native cryptocurrency of the Fantom blockchain network. It serves as the backbone of the platform, powering various functions that include the following.

• Securing the network: FTM is used for staking, which helps to secure the Fantom blockchain and maintain its consensus.

• Governance: FTM holders can participate in governance decisions, influencing the future development of the network.

• Fees: FTM is used to pay transactional gas fees on the Fantom blockchain.

In essence, FTM is the fuel that drives the Fantom ecosystem, enabling its various functionalities and ensuring its security and sustainability.

FTM staking and validator requirements

Staking is an essential part of Fantom's security model. With an average yield of about 6% APR and a minimum lock-up period of two weeks, FTM holders can stake their tokens and earn rewards in return. Staking also gives users governance rights, allowing them to vote on important protocol changes. According to the Fantom whitepaper, the network's staking mechanism is designed to be flexible, with delegators having the option to lock their tokens for different durations to earn higher rewards.

Meanwhile, Fantom has lowered the barrier to entry for the minimum amount of staked FTM needed to become a validator on the network. While validators previously required 500,000 FTM, this has been vastly reduced by 90%, as validator staking requirements are now 50,000 FTM.

Fantom’s Sonic rebranding: the Sonic migration

Recently, Fantom has announced a major transformation with its Sonic upgrade that promises to make Fantom a high-throughput Layer-1 that's compatible with Ethereum. This reflects the platform's commitment to becoming faster, more efficient, and more developer-friendly. Far from just being a name change, Fantom’s Sonic rebranding is a strategic upgrade designed to enhance network performance and build upon the success of the Opera mainnet.

The Sonic migration optimizes the platform's consensus layer, reducing latency and transaction fees. This makes Fantom more attractive for developers and users alike, especially in sectors like DeFi and NFTs. By focusing on speed, efficiency, and developer-friendliness, Sonic positions Fantom as a leading contender in the Layer-1 blockchain space.

What the Fantom to Sonic migration means for developers and users

As mentioned, the Sonic migration brings a new level of efficiency to Fantom. With its testnet already underway, we're seeing plenty of excitement in the way FTM prices rallied during September 2024. Here are three noteworthy improvements introduced by the Fantom Virtual Machine (FVM) to consider if you're excited about the upcoming Sonic mainnet lunch in December 2024.

Supercharging development

Pegged as an improved counterpart of the EVM, FVM promises to take the Fantom blockchain to new heights with its massive scalability. Since EVMs are effectively limited to a capped number of transactions per second (TPS), this creates a scalability bottleneck that could deter mass adoption. FVM breaks these boundaries and boosts the theoretical maximum number of TPS to 2,000 by offering dynamic translation, which translates high-level code into machine code more efficiently. Complementing this feature is optimized storage, which allows for more efficient data handling.

For developers, this means being able to build more complex DApps with minimal delays and congestion. Thanks to compatibility with familiar languages like Solidity and Vyper, developers can easily port existing projects from Ethereum to Fantom, benefiting from faster speeds and lower costs without having to re-learn new languages.

Additionally, by scaling directly on the Layer-1 network, FVM also avoids the security issues and main chain fragmentation risks that often plague Layer-2 solutions, ensuring a stable and secure environment for both developers and users.

Faster and cheaper transactions

Users benefit from the Sonic migration by experiencing faster transaction finality and lower gas fees. Fantom’s increased throughput of up to 2,000 TPS makes sure the network can accommodate growing demand from mainstream users and emerging DApp ecosystems. For example, users interacting with DeFi platforms can instantly stake assets or trade tokens without facing high gas fees or waiting for long transaction confirmations. This will greatly improve the user experience across a range of applications, whether they're engaging in DeFi staking, NFT minting, or basic token transfers.

Mass scalability without compromise

Fantom’s Sonic migration tackles the blockchain trilemma head-on, balancing scalability, decentralization, and security. Using a leaderless aBFT consensus mechanism which allows nodes to validate transactions without needing a central authority, the network can scale without compromising on decentralization or security. The leaderless aBFT consensus mechanism also helps the network to withstand attacks or node failures without compromising security or speed.

By solving scalability natively within the Layer-1 protocol, Sonic positions Fantom as a secure, decentralized, and scalable blockchain ready to drive the next wave of blockchain adoption. With its enhanced capabilities, Fantom is well-suited to hosting DApps, handle DeFi innovations, and facilitate cross-chain integrations, all while remaining highly efficient.

What is S?

Thanks to the recent 1:1 FTM to S compatibility governance vote, S token will be the native token for the Sonic chain. Like FTM, the S token plays a critical role in securing the network through staking and participating in governance decisions. However, S is optimized to align with Sonic’s focus on scalability, interoperability, and user engagement.

S vs FTM: a quick comparison

The key differences between the tokens include a more dynamic reward structure tied to Sonic's increased throughput, allowing for faster and more cost-effective transaction processing. The S token will also serve as a bridge asset for cross-chain integrations, supporting seamless transfers between different blockchains in Fantom's ecosystem and beyond.

Additionally, with the FVM and the Sonic migration, S will act as the primary medium for transaction fees and smart contract execution, offering lower costs and faster confirmations than its predecessor. This makes S integral to powering the network and enabling more sophisticated DApps and services on the platform.

As a vital component of the Sonic ecosystem, the S token will leverage the advancements of the migration to drive greater efficiency, security, and accessibility for developers and users alike.

Final words and next steps

Even with the Sonic upgrade coming live soon, Fantom isn’t resting on its laurels and looks poised for further growth. Future developments could include expanding its existing ecosystem, enhancing developer tools to attract more talent, and rolling out new partnerships to preserve its competitiveness in the Layer-1 blockchain space. A smooth migration to Sonic will be crucial for maintaining community confidence and ensuring the platform's continued growth. Ultimately, only time will tell if Fantom can realize its ambitious plans and solidify its position as a leading blockchain network.

If you're keen to take advantage of the volatility that's likely to come with Fantom's Sonic migration, you can get started by trading FTM with us. Alternatively, you can learn more about other Layer-1s in the space by checking out our guide comparing Solana vs Ethereum, or read about the newer Layer-1s like Sei and Aptos.