THELOGICALINDIAN - The Ethereumcompatible Layer 1 arrangement hosts a active DeFi ecosystem and has become a admired amid some of the crypto spaces best abounding builders
Fantom is a Layer 1, Proof-of-Stake arrangement with low transaction costs and fast finality. Since ablution in 2024, Fantom has congenital up a admirable DeFi ecosystem of both acquaintance and Ethereum-native applications.
What Is Fantom?
Fantom is one of several another Layer 1 blockchains that surged in acceptance in 2024. Thanks to it low transaction costs, the arrangement has admiring abounding users and developers that are priced out of application Ethereum due to its aerial gas fees.
The Fantom abject alternation uses Directed Acyclic Graphs to accomplish consensus. It secures an added beheading band alleged Fantom Opera, which handles added specific and circuitous functions. Today, Fantom Opera is what best bodies are apropos to back they allocution about Fantom and is the home of the blockchain’s DeFi ecosystem.
Opera is the aboriginal beheading band congenital on Fantom and is accordant with the Ethereum Virtual Machine. This agency that developers can write, deploy, and run acute affairs accounting in bendability on Fantom, aloof as they would on Ethereum. Fantom’s affinity with Ethereum has additionally helped advance development as builders can calmly anchorage applications over from Ethereum to Fantom with few changes to the basal code.
Similar to added Layer 1 blockchains, Fantom uses a Proof-of-Stake validation mechanism. There is no minimum pale amount: users can acquire rewards with alone 1 FTM. However, those staking lower amounts charge agent their tokens to a validator node. The minimum pale to run a bulge is currently 500,000 FTM.
Fantom validation apparatus is accelerated and leaderless acknowledgment to its Lachesis accord algorithm. Single validators do not accept which affairs are accurate in anniversary block; instead, Fantom uses a network-wide consensus.
By removing leaders, the majority of transaction processing does not await on the validators that authority the better cardinal of tokens, as is the case with added Proof-of-Stake chains such as Solana and Avalanche. This increases Fantom’s decentralization and after aegis by accepting all validators comedy an according role back accommodating in the accord protocol.
As Fantom is accordant with Ethereum, it can additionally be accessed through accepted Web3 wallets like MetaMask. Users can artlessly add the Fantom Opera network to MetaMask to affix to Fantom.
Decentralized Exchanges on Fantom
Fantom currently has two accepted decentralized exchanges that let users bandy assets and accommodate liquidity. The best acclimated one of the two is SpookySwap. It’s currently the better built-in DeFi agreement on Fantom with over $1 billion in absolute amount locked.
SpookySwap’s user interface is apple-pie and accessible to understand, authoritative it a abundant abode to alpha exploring the network’s DeFi ecosystem. Swapping works abundant the aforementioned way as it does on added automatic bazaar makers: users baddest the assets they appetite to bandy and the bulk they appetite to bandy again accomplish the trade. The SpookySwap trading interface displays advantageous advice such as abeyant slippage, amount impact, and fees afore trades are submitted. More avant-garde users can additionally actualize absolute orders for asset pairs.
Users can acquire SpookySwap’s BOO badge and trading fees by accouterment clamminess to its pools. BOO stakers accept 0.03% of the fees from swaps, so the bulk of rewards paid out increases as action on the agreement does.
But SpookySwap doesn’t stop at trading. The belvedere has additionally congenital a convenient interface for Multichain’s Fantom arch that integrates seamlessly with the exchange. Through the bridge, users can accelerate assets to and from Fantom and several added Ethereum-compatible Layer 1 and Layer 2 networks, including Binance Smart Chain, Polygon, Arbitrum, and Avalanche.
Fantom’s second-biggest exchange, SpiritSwap, provides agnate functionality to SpookySwap and has additionally chip Multichain’s Fantom bridge. However, SpritSwap’s key addition is its inSPIRIT badge system.
Liquidity providers that acquire the exchange’s built-in SPIRIT badge can lock it on the agreement and accept inSPIRIT tokens. inSPIRIT holders acquire a allocation of the exchange’s fees, aloof like SpookySwap’s BOO token. Notably, they can additionally vote on which clamminess pools accept additional yields.
SpiritSwap’s vesting arrangement is agnate to the one acclimated by Ethereum’s better DeFi protocol, Curve Finance. The best holders accept to lock up their SPIRIT tokens, the added inSPIRIT tokens they will be allocated, giving them added voting power. This agency SPIRIT holders are incentivized lock up their tokens for best periods to accretion added access over which crop farms get additional returns.
Lending and Borrowing
Moving on from exchanges, the abutting key allotment of Fantom’s DeFi ecosystem is its ambit of lending and borrowing platforms. The better “DeFi bank” on Fantom is Geist Finance. Launched in October 2021, Geist Finance is a newer aspirant into Fantom’s DeFi arena but has bound acquired traction. Geist functions analogously to the Ethereum-native lending protocols Compound and Aave and has become Fantom’s third-biggest agreement acknowledgment to its avant-garde badge accolade program.
Geist has auspiciously maintained adorable yields for users by alms rewards in its built-in token, GEIST. However, clashing added protocols that acquiesce clamminess miners to advertise their badge rewards immediately, Geist has a three-month vesting aeon on all GEIST tokens earned. During this period, holders alpha earning a allotment of the protocol’s acquirement as if their tokens were staked. Tokens can be aloof at any time aural the three-month vesting period, but holders will cost 50% of their absolute tokens accumulated. These absent tokens are again broadcast to users who accept to lock up their GEIST for the abounding three months, benefitting abiding holders alike more.
Not far abaft Geist Finance is addition lending and borrowing belvedere alleged Scream. Paying admiration to the accepted abhorrence cine alternation of the aforementioned name, Scream doesn’t alter abundant from Geist in its functionality. However, the agreement does abutment lending and borrowing for a added ambit of assets including several abate stablecoins such as FRAX, DOLA, and TUSD.
Where Scream does alter from Geist is in its badge accolade structure. It’s currently in the action of advance its SCREAM badge staking arrangement to alter 70% of all agreement acquirement to badge stakers, and additionally affairs to accelerate the actual 30% to a newly-formed DAO. Just over bisected of the DAO’s funds will be captivated in assets as allowance in the case of a adverse accident such as a badge bug or hack. The added bisected will be allocated to costs new products, configuring incentives, and badge buy-backs, accountable to association voting.
Another notable lending belvedere on Fantom is Tarot, the 14th-ranked agreement on the network. Tarot’s alcove is accouterment leveraged crop farming, acceptance clamminess providers to borrow assets from lenders to advantage up the yields generated by their positions. While this action can aftermath big returns, it additionally capacity participants to the accident of accepting their positions liquidated.
However, for those who don’t appetite to booty on added risk, Tarot allows users to drop their assets for added users to put to assignment via leveraged strategies. In accomplishing so, depositors can accomplish handsome allotment on distinct assets after accepting to anguish about actuality asleep if the bazaar moves adjoin them. However, if appliance of lent tokens is high, there can be a adjournment aeon to abjure assets. This agency that locking tokens up is a accident for users who may charge fast admission to their assets.
The Future of DeFi on Fantom
The Fantom ecosystem is growing at a accelerated rate, with several accessible projects set to draw alike added clamminess to the chain. One highly-anticipated affection set to hit Fantom is the alleged “degenbox” action from Daniele Sestagalli’s Abracadabra.Money.
The action lets users drop the Terra network’s UST stablecoin to borrow Abracadabra’s MIM stablecoin. As UST and MIM are both abiding assets, the borrowing position can be leveraged up with a bargain accident of defalcation compared to borrowing adjoin airy assets. However, the degenbox action relies on UST advancement its $1 peg—if UST drops decidedly beneath $1, leveraged positions on Abracadabra will be liquidated.
Despite the risks involved, the degenbox action has accurate accepted with DeFi users on Ethereum. The action can crop amid 40 and 110% allotment on stablecoins depending on the bulk of advantage used. While Abracadabra has already launched on Fantom, it currently alone lets users borrow MIM adjoin FTM tokens. However, it’s broadly believed that Abracadabra affairs to anchorage over the degenbox action already Terra integrates UST with the Fantom network.
Elsewhere, the accepted “DeFi architect” Andre Cronje is architecture a new DeFi agreement on Fantom with advice from Sestagalli. The alms will amalgamate several acknowledged DeFi appearance from absolute protocols, such as a badge vesting arrangement agnate to Curve Finance and permissionless abutment for agreement bribes, a convenance fabricated accepted by Convex Finance.
In a contempo blog post, Cronje accepted that the new agreement would act as an automatic bazaar maker for protocols, acceptance them to bootstrap clamminess and calmly action badge incentives to actualize a added able DeFi ecosystem on Fantom.
In adjustment to actualize a fair barrage for the new protocol, an antecedent administration will be allocated to the top 20 DeFi projects on Fantom with the accomplished absolute amount locked. Each agreement will adjudge how to administer tokens to its users in a bid to ensure that tokens go to the best alive and complex DeFi users on the network.
Fantom has already admiring over $8 billion beyond added than 100 protocols with a solid foundation of badge exchanges and lending platforms. Thanks to its Ethereum compatibility, an accretion cardinal of developers and users are allotment Fantom to body their protocols and arrange their assets. The network’s contempo advance backs up this trend. Fantom’s absolute amount bound has added 109% over the accomplished ages and shows no signs of slowing down.
Disclosure: At the time of autograph this feature, the columnist endemic FTM, ETH, and several added cryptocurrencies. Andre Cronje is an disinterestedness holder in Crypto Briefing.
