• Fantom is building a programmable platform on a directed acyclic-graph based distributed ledger.

• Fantom uses an asynchronous byzantine fault tolerant Proof-of-Stake consensus mechanism called "Lachesis" and integrated with the Ethereum Virtual Machine (EVM) and the Web3JS stack. Users can thus write, compile, and deploy smart contracts on Fantom in the same way as they can on Ethereum.

• According to the team, key features of Fantom relate to:

  • 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.

• The FTM token is required for staking, on-chain governance and as payment for network fees. Naturally, FTM can also be used to transfer FTM-denominated value.

1. What is Fantom (FTM)?

Fantom is building a platform consisting of a fast, scaleable, 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:

• 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.

The vision of FANTOM is to "grant compatibility between all transaction bodies around the world using DAG technology", and to create new infrastructure with high reliability that allows for real-time transactions and data sharing. It also aims to develop a new verifiable compiler and register-based virtual machine, which automatically checks for correctness, generates proofs of smart contract behavior, and execute instructions more efficiently than existing models.

Some of its key highlights include:

• It raised ~$39.7 MM via private & public token sales from March to June 2018.

• It aims to enable smart contracts on DAG-based systems.

• It utilizes algorithms such as Coffman–Graham algorithm to achieve Asynchronous Byzantine Fault Tolerance ("aBFT").

Its native token, FTM, is envisioned to have the following functionalities:

• For staking with a validator node: to secure the network in return for block and transaction rewards. Nodes will be ranked based on the speed at which they confirm transactions. Therefore, better performing nodes with better hardware will earn more rewards on average per FTM staked

• To pay transaction fees: users can pay transaction fees using FTM

• To vote on on-chain governance proposals: each token holder running a validator node, or who has delegated their FTM to a validator node, will be able to vote on proposals to change the structure of the mainnet, modify system parameters such as block rewards, and the election of moderators and the technical committee

2. Blockchain and network data

2.1 Introduction

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.

2.2 Finality-transaction process

The following are some steps for a transaction to reach finality in the Fantom network:

• When a user submits a transaction into a node, a successful submission receipt will be issued to the client as a confirmation of the submitted transaction.

• The node will batch the user submitted transactions into a new event block amended into a DAG structure of event blocks and then will broadcast the event block to all other nodes of the system. The node will send a receipt confirming that the containing event block identifier is being processed.

• When the event block is known by majority of the nodes (e.g., it becomes a Root event block), or being known by such a Root block, the node will send a confirmation that the event block is acknowledged by a majority of the nodes.

• The system will determine the condition at which a Root event block becomes a Clotho for being further acknowledged by a majority of the nodes. A confirmation is then sent to the client to indicate that the event block has come to the semi-final stage as a Clotho or being confirmed by a Clotho.

• After the Clotho stage, the network will determine the consensus timestamp for the Clotho and its dependent event blocks. Once an event block gets the final consensus timestamp, it is finalized and a final confirmation will be issued to the client that the transaction has been successfully finalized.

Mainchain and Atropos of Lachesis DAG

Thus, there will be a total of five confirmations to be sent and the fifth receipt is the final confirmation of a successful transaction.

The team notes there are some cases that a submitted transaction can fail to reach finality. Examples include a transaction does not pass the validation, e.g., insufficient account balance, or violation of account rules. The other kind of failure is when the integrity of a DAG structure and event blocks is not complied due to the existence of compromised or faulty nodes. In such unsuccessful cases, the event blocks are marked for removal and detected issues are notified to all nodes. Receipts of the failure will be sent to the client.

2.3 Network overview

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 of 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 of several block confirmations like in the probabilistic finality in Nakamoto consensus (in BTC, ETH).

2.4 A 3-blockchain system

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.

2.5 Smart-contract programming toolchain

Key features of the new programming language toolchain include:

• Solidity Compatibility for Programmers: smart contracts developed in Solidity (for Ethereum) should be easily portable to the new programming language toolchain.

• The focus of the new programming language toolchain should be safety, security, and low energy consumption.

• To achieve safety, verifiable executions are needed for smart contracts.

• Define subsets/extensions for Solidity to ease the automated verification of smart contracts using a specification language interwoven with Solidity code.

• Delivered software artefacts are to be open-sourced and licensed with GPL V3.0.

2.6 Proof-of-Stake (PoS) mechanism

Fantom is planning to implement Proof of Stake to secure the network. It will be permissionless, allowing anyone to participate in it by running or delegating to a validating node.

Nodes that participate to achieve consensus are called "validator nodes". A user can run a validating node by staking a minimum of 3,175,000 native FTM tokens. A user can also delegate to a validating node any amount of FTM, and the account running the validator account will receive a fixed 15% fee from all rewards generated by the delegator's tokens.

Yearly returns for validator nodes (block rewards only)

Validator rewards have two components:

1. Block rewards: For the first four years after the main net launches, validators will be able to earn block rewards that are computed daily based on the number of event blocks they confirm.

2. Transaction fees: For every event block that is confirmed by the network, the transaction fees included in the event block will be distributed to validator nodes that confirmed that event block.

Validator rewards are also influenced by a Proof of Importance score. This score is a multi-factor model that influences the rewards earned by validators. A validator earns rewards not simply based on the number of native FTM that is staked, but also by a number of other factors including:

• Validation performance: Given that block finality is reached when an event block has reached the validating threshold of two-thirds of the network's validating power, a validator effectively participated in a block validation if such validation occurred before the validation threshold was reached. An efficient validator should, on average, effectively participate in validating two-thirds of all event blocks. Those who consistently do not participate, or participate after the validation threshold is reached, will be penalized, earn fewer block rewards, and will ultimately be pruned from the network.

• Originating transactions: Validators will be expected to accept new transactions being submitted to the network and act as originators of such transactions. Those who consistently do not originate transactions will be penalized, receive fewer block rewards, and will ultimately be pruned from the network.

• Processing power: The processing power of validators will be measured on a regular basis.

Nodes that do not participate in consensus are called "non-validating", or "listening" nodes. These nodes are able to synchronize with the network, submit, and receive transactions. However, they do not contribute to any voting rounds to confirm transactions. Because they do not participate in consensus, running a non-validating node does not earn any rewards.

3. Products and metrics

A detailed description on how the native token will be used on the network is available here.

Planed use cases include the following:

• Peer-to-peer payments without financial intermediaries.

• "Sharing Economy" applications, such as ride-sharing, without intermediaries taking a cut.

• Supply-chain management that can be tracked at every step, with data saved on an immutable ledger.

• Governments and organizations that need to communicate with each other through a shared ledger or database.

Currently, Fantom has a wallet available on iOS and Android connected to an earlier version of Fantom's distributed ledger. It allows a user to transfer testnet tokens between accounts, with sub-second confirmations.

4. Economics and supply

4.1 Token supply distribution

• Seed Sale tokens make up 3.15% of the total token supply.

• Private Token Sale tokens make up 37.04% of the total token supply.

• Public Sale tokens make up 1.57% of the total token supply.

• Team is allocated 7.49% of the total token supply.

• Advisors received 12% of the total token supply.

• Token Reserve constitutes 6% of the total token supply.

• Block Rewards is allocated 32.75% of the total token supply.

FTM token supply distribution

Seed Sale: conducted between February 2018 to March 2018 for $0.016 / FTM (10,000,000 FTM) at an average rate of $642.17 = 1 ETH and raised a total of $1.6 MM, consisting of 1,386 ETH, USD 613,514, and AUD 130,000, selling 3.15% of the total token supply.

Private Sale 1: conducted between March 2018 to May 2018 for $0.031 / FTM (805,021,058.4 FTM) at an average rate of $667.03 = 1 ETH and raised a total of $24.8 MM, consisting of USD 3,248,082 and 32,265 ETH, selling 25.35% of the total token supply.

Private Sale 2: conducted between May 2018 to June 2018 for $0.035 / FTM (369,574,672 FTM) at an average rate of $614.50 = 1 ETH and $6,469 = 1 BTC, and raised a total of $12.9 MM, consisting of USD 700,000, 8 BTC, and 19,780 ETH, selling 11.69% of the total token supply.

Public Sale: conducted on June 15th 2018 for $0.04 / FTM (50,000,000 FTM) at a rate of $463.28 = 1 ETH and raised a total of 4,317 ETH (~$2 MM at $0.04 / FTM), selling 1.57% of the total token supply.

4.2 Token governance and use of funds

As of May 2019, Fantom has used approximately 28.2% of TGE funds according to the allocations below:

• 24% Marketing.

• 16% Team.

• 19% Research and Development.

• 1% Software Auditing.

• 3% Legal.

• 37% Business Development.

Fantom holds its cryptocurrency funds in a number of single-signature wallets held by different persons within the organization, whose identity the team chose not to disclose for security reasons. Fantom's fiat currencies are held in a bank account that requires the approval of two of three individuals within Fantom for payments to go out. The payment of cryptocurrency funds also requires the approval of two of three individuals, and transaction records are shared with all three individuals to provide a complete audit trail of all funds spent.

4.3 FTM token release schedule

The following chart represents the number and breakdown of all FTM tokens that are to be released into circulation on a monthly basis.

FTM token release schedule

5. Roadmap, updates, and business development

5.1 Original roadmap

5.2 Late milestones

• Validate Lachesis protocol: the team states while that the Lachesis protocol was theoretically verified, the engineering implementation was only verified after the first implementation of the Lachesis protocol in late Q3 2018.

• Fantom wallet development: the team notes that the wallet was only made publicly available after the engineering implementation of the Lachesis protocol was verified.

5.3 Updated roadmap

Q3 2019:

• Mainnet release.

• Secure consulting and implementation partnerships in Dubai.

• Publish Virtual Machine Paper.

• Complete Fantom mainnet governance paper.

Q4 2019:

• Complete first consulting and technology contracts in Dubai.

• Establish partnerships in South-East Asia and the Middle East.

• Complete verifiable compiler spec for Virtual Machine.

• Complete JavaScript API specifications.

• Enable the running of listening nodes on mobile devices.

Q2 2020:

• Compose FANTOM technology development council.

• Support development of FANTOM becomes open source.

• Establish FANTOM research support agency.

• Enhance system model.

• Launch open logistics application service.

5.4 Commercial partnerships and business development progress

• COTI: COTI is a project working on building a new DAG-based distributed ledger focusing on payment infrastructure. Fantom is collaborating with COTI on aBFT research and development.

• Fusion: Fusion has been working on Digital Control Rights Management ("DCRM") technology to enable secure cross-chain asset transfers. Fantom and Fusion are collaborating on integrating DCRM on top of the Fantom distributed ledger.

• University of Sydney: Fantom is collaborating with the University of Sydney's Programming Languages team to research and develop a new programming toolchain to achieve security and efficiency in the execution of smart contracts.

• Austrade: Austrade was responsible for facilitating the Australian Blockchain Mission to Dubai and has a dedicated presence in Dubai. Their charter is to foster and facilitate Australian & UAE commercial relationships. Fantom Innovational Lab, represented as an Australian entity, was accepted as a delegate for this trade mission.

• Sikoba Research: Sikoba Research is a company based in Luxemburg that specializes in distributed computing, cryptoeconomics, and applying cryptography, such as zero-knowledge proofs, into blockchain systems. Fantom is working with Sikoba on developing mechanisms to encourage good behaviour on the Fantom network, governance, and Isekai, an engine to prove correctness in smart contracts.

6. Project team

7. Fantom's activity and community overview

7.1 Social and community data

Social community overview and strategy

The Fantom team lists the following as its current and future community strategies:

• Keep community up-to-date with the latest developments and let team members engage with the community on a regular basis.

• Attend, support, and host Hackathons and DevCons.

• Discussing project development with the community via live calls in Discord Channels.

• Ambassador program in Russia and Turkey.

• Grants and competitions to incentivize talented developer teams to build on top of Fantom.

• Gamifying elements in network participation to incentivize community members to run validator nodes.

• Community infographic contest.

Community and social channels

Telegram (English)
Twitter (English)
Medium (English)
Telegram (Chinese)
Telegram (Korean)
Discord
Facebook (English)
Reddit

8. Appendix

• Go-lachesis Wiki

• OPERA: Reasoning about continuous common knowledge in asynchronous distributed systems

• Fantom: A scalable framework for asynchronous distributed systems

• ONLAY: Online Layering for scalable asynchronous BFT system

• Fantom Improvement Proposal 1: Proof of Stake (FIP #1)

• Fantom Proof of Stake FIP-2

• Fantom Improvement Proposal 2 : Proof of Stake by the numbers (FIP #2)