Fantom is a crypto that increased its price by almost 10,000% in 2021. Its success may be because investors are looking for the next Ethereum. Investors want faster, affordable and secure cryptocurrencies. And Fantom (FTM) could be the cryptocurrency to take the crypto market by storm.
Since the beginning of August, the price of Fantom (FTM) has grown by 500%. Many crypto experts say that Fantom could be better than Ethereum. This guide will outline the reasons behind that prediction and look at whether it is worth staking Fantom.
This guide will highlight the pros and cons of staking Fantom and explore the reasons for current growth and the potential for future gains.
Contents
- What Is Fantom (FTM)?
- Who Are The Founders of Fantom?
- What Makes Fantom Unique?
- Why Do Smart Contracts Matter?
- How To Set Up Your Fantom Wallet
- How To Stake Fantom (FTM)
- Should You Stake For Fantom (FTM)?
- What Projects Partner With Fantom?
- The Risks Of Staking Fantom (FTM)
- To Summarise How To Stake Fantom (FTM)
- FAQs
What Is Fantom (FTM)?
Fantom is a "directed acyclic graph (DAG)" smart contract platform. It provides DeFi (decentralized finance) services to developers, and it uses a bespoke consensus algorithm.
What Is a Directed Acyclic Graph (DAG)?
Unlike a blockchain, with directed acyclic graphs (DAG), there are no blocks. It consists of vertices and edges, so transactions are recorded as vertices and on top of one another. The only similarity to a blockchain is that transactions are submitted to the DAG by nodes.
Fantom, together with its FTM token, aims to resolve problems concerning smart-contract platforms. Specifically, the solutions could be improving transaction speed, and, indeed, Fantom developers say they have reduced transaction speeds to less than two seconds.
Who Are The Founders Of Fantom?
Dr Ahn Byung Ik, a South Korean computer scientist, founded the Fantom Foundation in 2018. Currently, the platform's CEO/CIO is Michael Kong, who oversees a diverse team of developers, scientists, engineers, designers, researchers and entrepreneurs, all with extensive experience and sharing the founder's vision to build the infrastructure for "a more democratic and efficient future."
What Makes Fantom Unique?
Fantom aims to use a new "scratch-built consensus mechanism" called Lachesis for facilitating DeFi and other services based on smart contracts. Lachesis can inaugurate high-capacity, 2-second transactions and improved security over algorithm-based proof of stake (PoS) consensus mechanisms.
Similarly to the Ethereum Network, the Fantom project appeals to developers wanting to deploy decentralized solutions. The official literature for Fantom states a mission to "grant compatibility between all transaction bodies around the world."
Lachesis uses leaderless Proof-of-stake consensus, which provides the highest levels of security without leaders. With some proof of stake (PoS) systems, the validators influence the validity of transactions. But on the Fantom Opera mainnet, validators have no say in the transaction validity
Fantom states the following regarding the Opera Mainnet,
"The Fantom Opera mainnet is compatible with the Ethereum Virtual Machine (EVM) and provides full smart contracts support through Solidity. We designed Opera to overcome the limitations of older generations of blockchains, keeping the compatibility with Ethereum for seamless dApp porting"
The Opera Mainnet sets Fantom crypto technology apart from many other crypto networks.
The FTM token allows staking activities with user rewards and is the backbone for transactions.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Why Do Smart Contracts Matter?
A crypto that provides smart contracts enables cryptocurrencies to run other applications, such as DeFi (decentralized finance) and NFTs (non-fungible tokens). DeFi cuts out the middlemen, such as lenders and banks, from daily financial transactions. And NFTs are digital art collectables where the owner's information codes into the item.
Ethereum was the first crypto platform introducing smart contracts, and now, 80% of applications are built on the Ethereum network.
But Fantom could potentially do far better than Ethereum.
The Ethereum Network has congestion issues and high gas fees, and Fantom has already obliterated these issues. Currently, if you stake Ethereum, your ETH is locked until the Ethereum 2.0 upgrade completes.
Thankfully, you have the choice when staking Fantom. You can choose a designated period to lock your FTM stake.
Before you can stake Fantom (FTM), you need to set up a secure wallet.
How To Set Up Your Fantom Wallet
The Fantom Wallet is a PWA (Progressive Web App) that is easy to use and update.
Install the wallet on Chrome (Windows/macOS/Linux)
- Open the Fantom Wallet in Chrome (or Safari for IOS)
- Click on the + in the URL address bar for Chrome (or click the Share button in Safari and +add to home screen")
Android
- Open the Fantom Wallet in Chrome
- Click Settings (top right corner)
- Click on "Add to Home Screen"
Creating a Fantom Wallet
- Go to the URL pwawallet. Fantom.network#
- Click on "Create Wallet"
- Choose a strong password with at least 8 characters. Your password must include one upper-case letter, a symbol, and a number. Store your password safe as it cannot be reset or recovered.
- Enter the password and click on the checkbox so you can download the keystore file (which contains your private key with your encrypted password.
- Write down your private key and 24-word mnemonic phase, and do not share these details with others because they give access to your wallet.
- Verify your mnemonic phrase and click "Access your wallet", and it will show the public address.
How To Stake Fantom (FTM)
Now, you've set up your secure Fantom (FTM) wallet, and you are ready to buy FTM and start earning rewards from staking it.
- Go to the menu bar and click on "Staking"
- Click on "Delegate"
- Enter the amount of FTM you wish to stake
- Choose a validator from the dropdown menu "Select a validator." You can find out more about a validator by clicking on their details. Although a validator can't access your funds, you could find your staked tokens reduced because of their activity if they commit a malicious act. Validators currently take a 15% commission from your rewards for their services.
- Review your choice of validator and how much you wish to stake
- Enter your password and click on "Delegate", and that's it, you have now staked your FTM
Should You Stake For Fantom (FTM)?
Fantom is setting up to be one of the leading DeFi hubs, not least because recently, many leading, reputable exchanges have listed FTM. Fantom is hosting a few of the most popular DeFi protocols, which further adds to the popularity.
One of the main issues with Ethereum is network congestion which creates high gas fees on Ethereum 1.0. It's a big reason why Ethereum is scaling to Ethereum 2.0. But, for Fantom, network congestion isn't a problem because it's a ready-built function for scalability
The slow network speeds and high gas fees affect the DApps (decentralized applications) on Ethereum. But, not so for Fantom because they give each DApp an independent blockchain. To visualize this, imagine every App you have on your computer having a computer to itself but linked up to the network.
Fantom, therefore, is a network of a potentially infinite number of decentralized networks, all sharing the same software logic but behaving independently of each other.
What Projects Partner With Fantom?
Fantom is partnered with Chainlink, building secure, scalable DeFi products such as stablecoins, synthetic assets and lending protocols. Developers on Fantom have access to Chainlink's Oracle infrastructure, enabling the entire Fantom ecosystem to "combine tamper-proof real-time data for on-chain and off-chain assets from trusted sources."
Other projects leveraging Fantom:
- DABS – a fast-growing and innovative energy provider in Afghanistan. Fantom is supporting smart energy in the country.
- Travala - a blockchain-based travel booking platform using Fantom's blockchain to leverage bookings for over 3,000,000 travel products worldwide, such as tours, flights, homes, hotels and activities.
- Afghanistan Chamber of Commerce and Investment – Fantom are working with the Chamber of Commerce to improve its current software by incorporating blockchain and cryptographic tools.
- Royal Star Pharma Partnership – the largest pharmaceutical distributor in Afghanistan, has collaborated with Fantom to help overcome the regional counterfeit drug problem.
You can find out more about Fantom partners from the Fantom website.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
The Risks Of Staking Fantom (FTM)
Is staking Fantom safe? Well, you can never apply the word "safe" to any form of investing or trading, and staking is no different. You are relying on Fantom (FTM) to carry on paying staking rewards and not going belly up any time soon.
Realistically, Fantom is still relatively new to the cryptocurrency market. Founded in 2018, Fantom is listed at #29 by market cap with a price of $2.10 today, a drop of $0.28 since a week ago.
Fantom is a high-performing, secure and scalable DAG. It can overcome most of the limitations of first-generation and second-generation blockchain platforms. One of the main issues with early blockchains is the inability to solve all three blockchain components: security, scalability, and decentralization. But Fantom uses a superior standard of consensus algorithm called an Asynchronous Byzantine Fault Tolerance (aBFT), which can simultaneously solve all three problems.
To Summarise How To Stake Fantom (FTM)
Fantom uses unique, secure and scalable leaderless proof of stake consensus mechanism. Not having leaders increases network security significantly. Fantom is community-driven and open-source.
Fantom has a highly experienced support team of engineers, researchers, scientists, entrepreneurs, and designers sharing the same open-source vision.
Fantom has a solid foundation and an excellent support team. It has backing from reputable investors like HyperChain Capital and Alameda Research.
But, cryptocurrency is a highly competitive market. Cardano (ADA) and Polkadot (DOT) are crypto worthy competitors, proclaiming faster transaction speeds and lower costs. These cryptos are likely to be forerunners in the quest to be the top-performing cryptocurrency. The question is, therefore, will Fantom (FTM) be one of the top five cryptocurrencies?
The Fantom network says transaction speeds are fast, but Solana can process 50,000 tps (transactions per second). And Cardano is considering HYDRA technology, which would offer 1,000,000 tps. Fantom cannot yet compete with impressive speeds like that.
After the Ethereum upgrade, the network suggests an achievable 100,000 tps is a realistic expectation. So Fantom cannot afford to be complacent.
Consider the following three influential factors before staking Fantom (FTM).
- Adoption – Fantom already has a few good partnerships. It has attracted some DeFi projects and has $850 TVL (total value locked) on the system. More adoption of Fantom would enable further speculation for growth potential.
- Technology – Fantom professes to have solved the Ethereum scalability issues. Each application has a separate blockchain. The DAG (directed acyclic graph) is unique to other blockchains because it means transactions are processed in parallel, unlike other cryptos using a single processor.
- Fantom threats – concerns may come primarily from competing cryptos and the fears of DeFi regulation. Globally, financial regulators are worried about DeFi because the projects may offer similar financial products without the protection that centralized banking products provide. If DeFi became regulated, it would change the face of cryptocurrency as we know it.
Technical hitches or delays with crypto technical development are common concerns for all cryptocurrencies. The underlying technology for Fantom is untested in the long term.
Blockchain technology is experiencing exponential growth. Right now, Fantom may appear to solve the issues that Ethereum has yet to resolve. But undoubtedly, existing and emerging cryptocurrencies will be working on superseding current technological solutions.
It's easy to learn how to stake Fantom (FTM), and we hope this guide has helped you understand the reasoning for staking Fantom (FTM) instead of one of many other cryptocurrencies.
Please note that the above information is not providing advice on tax, investment, or financial services. We provide the above information without consideration for risk tolerance and a specific investor's financial circumstances.
Trading or investing in financial instruments such as cryptos may not be suitable for all investors. It does involve risk and the possibility of a loss of capital. There are no guarantees for profiting from cryptocurrencies, and it's advisable only to risk what you can comfortably afford to lose.
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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FAQs
Where can I buy Fantom (FTM)?
You can buy Fantom (FTM) from the major cryptocurrency exchanges, such as Binance, Gemini, Sushi, Uniswap, Bitfinex and Gemini.
How much Fantom do I need to stake?
The minimum stake is 1 FTM, but you have to use Multichain to swap EC-20 FTM or BEP-2 FTM tokens in exchange for Opera FTM coins. Don't worry. It's not as complicated as it sounds.
How do I Claim FTM Rewards
Claiming your FTM rewards is simple. Click on the "Claim Rewards" button on the menu within the staking tab. You will enter your password and click "Claim Rewards." You can do this in multiples of up to 200 epochs of rewards pending.
How much can I make from staking Fantom (FTM)
According to the Staking Rewards Website calculator, you can make up to 9.64% APY from staking (delegating) your Fantom (FTM).
The Fantom website, however, states that your FTM rewards are proportional to the lockup period. If you commit your stake for 365 days, you could earn 13% APY. But if you stake FTM with no lockup, the base rate is 4% APY, which is still far more than you'd get with fiat currency in a centralized bank savings account.
How do I unstake Fantom (FTM)?
When you stake your Fantom (FTM), you agree to a "lockup" period. If you unstake before that ends, your rewards are burned. If you still want to go ahead, click on "Staking" and "Undelegate." Enter how much FTM you want to undelegated and click OK. Enter your password and click "Undelegate".
Your "undelegations" are available to withdraw in 7 days from initiation. To check progress, you can click on "Pending" in the Staking tab.
Can I become a Fantom Network validator?
If you want to become a validator and help secure the Fantom network, you might change your mind when you learn that the minimum requirement is 1,000,000 FTM, which, at today's FTM price, would be $2,100,000.
What is Fantom Opera mainnet?
The Fantom Opera mainnet creates a fast, permissionless, open-source and secure environment that enables developers to build centralized applications on top of it, powered by the aBFT consensus algorithm.
It is compatible with the Ethereum Virtual Machine (EVM) and provides full smart contracts support through Solidity.
Should I buy Fantom (FTM)?
There's no guarantee that you'll see 9,710% gains from buying Fantom (FTM). After the mad frenzy of opinions on smart contracts, this year's Fantom (FTM) highs could be from false speculation. At the best of times, the cryptocurrency market is unpredictable, especially in the short term.
But, how about the long term potential for Fantom (FTM)? Could Fantom be the next big thing? Possibly. According to several crypto experts, the price of Fantom could rise to $4 over the long term (2025).