Introduction
There has been a whole lot of issues with the current financial system and this has limited its efficiency in various aspect. Users face innumerable security risks due to the presence of many financial intermediaries.
A survey carried out by CIO Dive showed that financial services are targeted by cyber criminals at a rate that is 300 times more than other existing sectors. Analysts from PWC also mentioned in an unverified statement that 45% of financial service intermediaries which include but not limited to stock exchanges and money transfers are facing serious cyber crime challenges every year.
Therefore, numerous companies are beginning to focus on the development of blockchain-based platforms and product because of its unique features and vast dynamism to be a good fit for a wide range of sectors including that of finances. The main reason behind this shift to blockchain is to make financial services more easily accessible to people on a global scale.
However, quite a good number of crypto startups have failed to live up to expectations in the financial industry in the last couple of years. The leaders of the industry which includes exchanges and banks have seemed to be too powerful to defeat or overcome up until now.
Some of those crypto startups are doing all they could to be the front runner in this race. Most of these startups have witnessed the numerous inequalities caused by existing global financial system and this is proof enough to show that there is utmost need for a better financial solution.
This is exactly what the intelligent team of Fantom noticed and decided to venture into the decentralized finance (DeFi) space to revolutionize and cause massive improvement to the sector.
What Is Fantom?
Fantom is a new DAG based Smart Contract platform that intends to solve the scalability issues of existing public distributed ledger technologies.
Fantom will be leveraging on an improved version of existing DAG-based protocols to facilitate the creation of an advanced platform that would outlive the traditional block ledger-based storage infrastructure. In order to maintain consensus, a new protocol known as "Lachesis Protocol" which will be integrated into the OPERA Chain of Fantom will be brought into implementation by the Fantom platform, so as to allow users of all applications powered by the Fantom OPERA Chain to enjoy a mouthwatering benefit of highly fast transaction speed and very low transaction costs.
Why Fantom?
Fantom looks forward to bringing about compatibility between all available transaction bodies across the globe by leveraging on their improved version of existing DAG-based protocols, and to facilitate the development of an ecosystem that allows for real-time transactions and data sharing at low transaction costs. The unique features of Fantom render the platform efficient and effective enough to be suitable for use in various industrial sectors, such as finance, electric vehicle provisions, telecommunication, logistics and others.
The Smart Contract-based ecosystem that will be built and designed alongside the Fantom platform will be available for use by all existing and future partner organizations around the world. The Fantom platform is designed to be made an open-source platform which is capable of being used, managed and controlled by the community, and to also help in developing various application support tools that will ease and facilitate the creation of decentralized applications (DApps).
How is Fantom Transforming the Existing DeFi Ecosystem?
Just as I said earlier, The Fantom team has built a platform that will be used in various industrial sectors, and the Financial sector happens to be one of them. They believe the best way to go about this is to improve on the existing Decentralized Finance (DeFi) Ecosystem. And as such, Fantom came up with their own advanced DeFi toolkit with an integration of specially designed modules into those toolkit.
Each modules in the DeFi toolkit have their own peculiar functionalities, and we will be discussing those modules later.
Just before we discuss what exactly Fantom will add to the DeFi ecosystem, I think it will be necessary that I remind you that the existing DeFi ecosystem is not sustainable enough and that is the main reason why we need an advanced DeFi ecosystem like that of Fantom.
Basically, the presence of various application support tools that allows the easy creation of dApps on Fantom act as plug-and-play tools that make it very easy for anyone with a smartphone to have full access to various financial services at lower costs.
Let's take a look into the act of transmitting money to a distant place, where by people send billions of dollars across borders in payment for goods purchased or to their loved ones: The transaction fees they face for carrying out this remittance are often greatly exceeding what is reasonable or moderate, which in turn cause a reduction in their income. But the good news is that the Lachesis Protocol of the Fantom platform which will be integrated into a Fantom OPERA Chain will help facilitate instant transactions and very low transaction costs for all users making use of dApps built on top of the OPERA Chain. And as such, it allows people leveraging on Fantom DeFi ecosystem to earn more and be more productive. This significant improvement will also go a long way to provide support for small businesses and economies around the world.
Another add-on for the Fantom DeFi ecosystem is the presence of an infrastructure for all stablecoins and stablecurrencies known as Statheros, which is built on top of the Fantom technology. I called this an add-on simply because stablecoins happens to be another form of decentralized finance. since it is a digital currency that helps to protect or defend consumers against the volatility of the price of the cryptocurrency by being pegged to some stable asset such as gold or dollar.
The Fantom Modules and Their Functionality
The Modules integrated into the Fantom DeFi toolkit is what makes Fantom unique as a better financial solution in the decentralized finance space. I will be giving a light description of the Modules, and they include:
Module Auction: This is a generic module that will be used for the creation of auctions, and it also makes it possible for users to place bids within a set period of time. A good use case for this module is in the liquidation auction of Collateralized Stable Debt Tokens (CSDT).
Module Authority: This is another generic module in the DeFi toolkit of Fantom which is used for setting system wide authority/managers for the issuers and providers of liquidity. This particular module helps facilitate the management of Native tokens.
Module Compound WIP: Module compound WIP is a collateral lending module that helps in paying liquidity providers with interest by borrowing from liquidity pools. It act as a centralized collateralized lending which is used as a solution for decentralized shorting.
Module CSDT: These are Collateralized Stable Debt Tokens (CSDT) that are pegged to other assets such as USD or BNB. This module also helps provide support for NFT objects which can be used as collateral. This module can has various use cases and they include: multi asset staking token, collateralized debt and the collateralization of debt into collateralized debt.
Module Escrow: This is a module that makes it possible for account based escrow locks to be created. Supports are provided for three types and they include future escrow, classic 2 party deposit escrow and lock based escrow.
Module Interest: When coins are issued, module interest is responsible for the accruement of interest (which can be set on a per denom level) by the issued coin. This module can be applied in the creation and design of interest bearing tokens and interest bearing savings accounts.
Module Issue: This is another module in the DeFi toolkit of Fantom that take into account the creation of ERC20 standard mapped token issuance with invariable (governance controlled) creation and management fees.
Module Issuer: This is an authority module used to control native denomination tokens. Issuers that are created by means of the Authority Module are granted full authority over some specific denoms. They can do whatever they like with the credit allowed by liquidity providers.
Module Liquidator: Bad debts from undercollateralized CSDT's are settled by the Liquidator module, and this is done by seizing them and raising financial resources otherwise known as funds through auctions.
Module NFT: This helps to facilitate the creation of Non Fungible Tokens (NFTs)
and Non Fungible Token collections.Module Liquidity Provider: This act as an internal module that allows for the setting of credit limits in module accounts, and also allows the module to reproduce or mint tokens against the credit owned by them.
Module Pool WIP for Compound Module: Pool module is another module in the DeFi toolkit of Fantom that act as a global shared interest bearing liquidity pool to provide support for any supported system asset.
Module Pricefeed/Oracle: This module allows the price information of some given assets that are tracked by the protocol to be posted by a group of white-listed oracles.
Module Record (Proof of Existence): This helps to facilitate the creation of proof as a record that cannot be changed. This is useful in the creation of luxury good proofs, certification proofs and building an anti fraud mechanism.
Module Uniswap: This is a generic system uniswap protocol that give users the capability to provide liquidity and set swap ratios that are dependent on pool.
Conclusion
Fantom is a platform that is very dedicated to making sure that the decentralized finance space sees a financial turnaround so that it becomes healthy for all of us to grow within it, and this is exactly why they came up with their own DeFi toolkit that have some advanced and unique modules integrated into them to facilitate the change that they have brought into the decentralized finance space for a flourishing financial economy.