Fantom is a DAG-based Layer1 project that uses an independent consensus layer, Lachesis Protocol to support the creation of multiple execution chains.
The network's independent consensus layer, called Lachesis Protocol, features a novel aBFT consensus mechanism developed by the Fantom Foundation. Lachesis can provide security to multiple layers and extend to additional layers within the system. The first additional layer is Fantom's EVM-compatible smart contract chain called Opera.
Opera is an EVM-compatible smart contract platform that launched in December 2019. Opera is a Proof-of-Stake (PoS) layer whose validator set uses Lachesis to validate transactions and produce new blocks. It now features several decentralized finance (DeFi) applications, including SushiSwap and Curve. Through Opera, users can write, compile, and deploy smart contracts on Fantom in the same way as they can on Ethereum.
Fantom's goal is to host an ecosystem of execution layers while enabling them to feature fast and cost-efficient transactions derived from the benefits of the proprietary Lachesis Protocol.
$FTM, the project's native token, is used for payments, governance, and ongoing block rewards sent to validators and delegators who stake $FTM. To participate in the network, validator nodes need to hold a minimum of 3,175,000 $FTM, and stakers need to lock up their $FTM. In return for the service, both the nodes and the stakers are rewarded with epoch rewards and fees.
Lachesis is the aBFT consensus mechanism developed by Fantom, allowing the latter to be faster and cheaper than previous technologies. It uses a Directed Acyclic Graph (DAG) based algorithm to achieve asynchronous Byzantine fault tolerance (aBFT).
Each Lachesis node stores a local Acyclic Directed Graph (DAG) composed of event blocks, each of which consists of transactions. The DAG, capturing the happens-before relationship between the events, is used to calculate an exact final order of events—and hence transactions—independently on each node.
Event blocks are either confirmed or unconfirmed event blocks. New event blocks are unconfirmed, whereas event blocks from the past 2-3+ frames are all confirmed, and subsequently ordered by honest nodes.
Consensus results in batches of confirmed event blocks, where each batch of events is called a block. Finalized blocks forming the final chain are calculated independently from the local DAG of event blocks stored on each node.
Unlike Proof-of-Work, round-robin Proof-of-Stake, coinage Proof-of-Stake, and sync BFT, Lachesis nodes do not send blocks to each other. Only the events are synced between nodes. Validators don’t vote on a concrete state of the network; instead, they periodically exchange observed transactions and events with peers.
Unlike Classical consensuses, such as pBFT, Lachesis does not use new events in the current election; instead, new events are used to vote for the events in 2-3+ previous virtual elections simultaneously. This leads to a smaller number of created consensus messages, as the same event is reused in different elections. Hence, Lachesis achieves a lower time to finality and smaller communication overhead compared to synchronous BFT.
The key features of Lachesis:
- Asynchronous: Participants have the freedom to process commands at different times
- Leaderless: No participant plays a “special” role in block production
- Byzantine Fault-Tolerant: Supports one-third of faulty nodes
- Near-Instant Finality: Transactions are confirmed in 1-2 seconds.
Fantom has developed a general framework named Lachesis for DAG-based consensus to build scalable distributed systems. The Fantom team has also developed a new consensus protocol, ONLAY, based on the Lachesis framework. ONLAY guarantees practical Byzantine fault tolerance in the presence of up to one-third of the participants that are compromised. The key challenge Fantom aims to address is a fast consensus and reliable ordering for events. For the ONLAY Protocol, the Fantom team states that its initial experiments have shown that leveraging the assigned layers of event blocks can help achieve more deterministic ordering of blocks and that the new layer-based protocol is a promising alternative to achieve deterministic, resilient distributed ledgers.
The Fantom network consists of nodes that are distinguished into users and validators. The ONLAY framework introduces graph layering on the DAG to achieve reliable ordering of event blocks.ONLAY framework leverages the assigned layers of event blocks in order to achieve consensus on the final ordering of event blocks and transactions across distributed systems. Each node maintains its own DAG and computes the main chain of finality event blocks. The consensus protocol achieves optimized pBFT with deterministic DAG-based finality on valid transactions and honest nodes. Once a block is finalized in ONLAY, it is final without further need for several block confirmations like in the probabilistic finality in Nakamoto consensus (in $BTC, $ETH).
Fantom built a platform consisting of a fast, scalable, and secure DAG-based distributed ledger using aBFT principles to achieve consensus, and a new verifiable compiler and register-based virtual machine for smart-contract execution. Some of its key features include:
- Speed: on Fantom, there is no need to wait for block confirmations; transactions are final and confirmed usually within 1-2 seconds.
- Security: with the use of the Lachesis aBFT consensus protocol, Fantom can support a large number of nodes in a permissionless, open-source environment.
- Smart-contract support: Fantom allows parties to execute smart contracts in a trustless and highly scalable environment.
- Enabling smart contracts in a DAG-based system, using the Lachesis protocol.
- Nodes do not need to be aware of the existence of all other nodes in the network when joining the network.
- Uses Lamport timestamps to achieve topographical ordering of event blocks.
There are three blockchains in the Fantom architecture: the Node Service ("NS") blockchain, the OPERA chain, and the Mainchain ("MC") blockchain. The NS blockchain stores the node identifiers of the network. The OPERA is the directed acyclic graph consisting of event blocks. The MC blockchain is the main chain, which stores the event blocks that are validated and finalized by the network.
For the three blockchains listed above:
- OPERA chain epoch has dynamic epoch time (1-10 secs).
- MC block epoch has dynamic epoch time (1-30 secs).
- NS block epoch has dynamic epoch time which depends on MC and OPERA epochs.
Fantom was founded in early 2018 by Fantom Foundation in the Cayman Islands with ongoing operations in South Korea. Fantom Foundation is the entity responsible for the development of Fantom. The project was founded by computer scientist Dr. Ahn Byung Ik, and the Foundation's chief executive officer is Michael Kong.
In May 2019, Fantom announced that it would partner with Binance Chain to improve interoperability through the creation of a multi-asset and cross-chain ecosystem. This multi-asset initiative would introduce various new token standards to Fantom, including Fantom versions of Ethereum's ERC-20 and Binance Chain's BEP-2. These standards set the stage for integrating popular Ethereum applications on Opera in early 2021. Opera is an Ethereum Virtual Machine (EVM)-a compatible blockchain that can also be integrated with Cosmos SDK. The project's standardized tokens (representing FTM) trade on several major Level 1 networks, made possible by various bridges.
The Fantom Foundation turned its focus following the mainnet launch towards DeFi use cases with the help of Yearn Finance founder Andre Cronje, who served until March 2022 as a technical advisor to Fantom. Andre has advised and helped promote Fantom's multi-chain efforts, such as the launch of Fantom's bridge to Ethereum. After Andre Cronje quit the project, the FTM market fluctuated significantly.
Current known investors of Fantom include 8 Decimal Capital, Alameda Research, Arrington XRP Capital, Block Crafters Capital, BlockTower Capital, BlockoxFund, ChainRock, Crypto Bazar, DFund, DHVC, Elysium, Game Theory Group, HyperChain Capital, JLab, JRR Crypto, Kosmos Capital, Nirvana Venture Advisors, One Block Capital, QCP Capital, Signum Capital, XSQ, and Zorax Capital.