Chapter 2: Cryptocurrencies

Is Fantom (FTM) Yet Another Ethereum Killer?

Interesting Fact:

Did you know that the Fantom network uses the innovative Lachesis technology as its consensus mechanism?

easy

8 minutes

In this section, I’m going to answer the question of “What is Fantom crypto?” and tell you about the Fantom ecosystem projects!

So, what is Fantom (FTM), and why should you pay attention? Whether you're a crypto enthusiast or new to the space, Fantom's name is something that you better be aware of. Cause it’s like a real phantom. If you’re oblivious about its existence, you won’t see how much you could be missing out!

Yet, Fantom is more than just a cryptocurrency. It encompasses an entire DeFi ecosystem, and introduces unique ways of solving universal blockchain problems. Learning about Fantom (FTM) can be beneficial for those interested in exploring the innovative blockchain technology and its potential applications. By understanding Fantom's unique approach to scalability and its focus on high-speed transaction processing, you’ll get a new perspective on what is what when it comes to blockchains!

In this section, we’re going to answer the questions from “What is Fantom crypto?” to “What is FTM crypto?” and then, having established clear definitions of these key concepts, we’ll take a look at Fantom ecosystem projects and how important they are.

Now, let’s get straight to the point!

What is Fantom? | Animated FTM Explainer

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Video Explainer: Is Fantom (FTM) Yet Another Ethereum Killer?

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What is Fantom in Crypto?

So, let’s begin by answering the question, “What is Fantom crypto?”. First and foremost, Fantom is a blockchain network. It was developed by a team led by Dr. Ahn Byung Ik, a computer scientist and entrepreneur. The project began in 2018 under the guidance of Fantom Foundation, a non-profit organization headquartered in South Korea.

What is Fantom crypto: Fantom Foundation.

As always, a new, promising project is launched only when the team behind it feels like they can offer something that other, current market players cannot. So, the motivation behind creating Fantom was to overcome the limitations of existing blockchain platforms.

The team sought to build a secure and scalable infrastructure capable of handling high-speed transactions and supporting large-scale decentralized applications across various industries. Well, this sounds like something that literally every blockchain out there claims to have as its goal. But here’s what makes Fantom different.

To achieve this, Fantom incorporated an innovative technology known as Lachesis and made it the network’s consensus mechanism. Without going into details, a consensus mechanism is an engine that implements a set of rules that power the blockchain and ensure its smooth functioning.

The Lachesis technology enables rapid transaction processing and scalability, as its output can be used immediately. There is no need to wait for block confirmations, because transactions are confirmed in 1-2 seconds.

Think of it as WhatsApp. It made communication between people way faster than it was before the existence of this app. So, Lachesis does the same thing, but to on-chain transactions.

What is Fantom crypto: the Lachesis mechanism.

Additionally, the platform implemented something called the Byzantine Fault-Tolerant (BFT) mechanism. Now that’s something to be aware of when it comes to understanding blockchain networks consisting of many participants.

Byzantine Fault-Tolerant is a term used to describe a system's ability to function correctly and reach a consensus even when some components of the system are faulty or behave maliciously.

For example, imagine a group of friends trying to decide on where they will all go out for lunch. They need to agree on the final choice, but there's a catch: some friends may intentionally give ironic answers or joke about going to such places as Krusty Burger. Despite such disruptions, a final consensus will have to be reached.

Byzantine Fault-Tolerance is like having a trustworthy friend in the group who can identify, cut through the irony and nonsense, and, as a result, filter out the misleading information and ensure everyone reaches a reliable decision. This friend's role is to ensure that even if a few friends are trying to disrupt the decision-making process, the group can still come to a consensus that everyone can trust.

What is Fantom crypto: Byzantine Fault-Tolerant (BFT).

When it comes to serious matters like transaction verification and new block creation, such obstacles must be overcome, and the Byzantine Fault-Tolerance mechanism is a tool to achieve this, thus increasing the blockchain’s speed and operational efficiency.

There’s something else about Fantom that has to be addressed, though. The fact that the team behind it ensured the blockchain’s compatibility with Ethereum, allowing seamless integration with Ethereum-based applications. Keeping in mind how buzzing the Ethereum ecosystem is, such a feature is like creating a visa-free border system between two neighboring countries.

Fantom quickly gained attention and support from the cryptocurrency community and industry partners. Therefore, it’s no surprise that the list of its strategic partnerships has many notable, prominent, and industry-established names on it. This makes sense, since, from its very inception, the Fantom team has been actively developing the platform, expanding its ecosystem, and driving adoption.

All of this sounds like a serious deal. And, the more people saw this, the more attention the Fantom project received. As it’s usually the case, positive attention was reflected in FTM’s, its native cryptocurrency’s, value increasing. FTM plays a crucial role in powering the Fantom network and incentivizing participants.

Let’s look into it in more detail.

What is FTM in Crypto?

Even though FTM sounds like just an abbreviation for Fantom, it would be a mistake to think that it’s the same thing. FTM is a cryptocurrency, and, as said earlier, it’s native to the Fantom blockchain network.

FTM is a utility token, which means that it’s used for payments, network fees, staking, and governance. Thus, it plays a central role in transactions, fee collection, staking activities, and user rewards.

What is Fantom crypto: tokenomics.

When it comes down to tokenomics, the total supply of FTM is 3.175 billion tokens. By the end of 2023, all of these tokens will be released into circulation.

The gradual release of tokens was carefully thought through during the design process, and, as a result, a significant portion of the entire supply was reserved for staking rewards for those users who have chosen to stake their FTM holdings.

Think of it as all the interest that you’d receive if you put aside your savings into a savings account at a retail bank. The bank system is structured to reward depositors for keeping their money within the said institution. When it comes to staking and crypto tech, these staking reward reserves have to be meticulously calculated and locked, so they could be released when the time to issue staking rewards comes.

By the way, if you feel like your knowledge about staking could be refreshed, don’t hesitate and check out this section!

Fantom Ecosystem Projects

Moving on with this “What is Fantom crypto?” section, it’s time to address yet another reason behind this blockchain’s popularity and importance – Fantom ecosystem projects. And there are plenty of those. But what’s the reason for that? The answer is… Opera.

Fantom Opera is the main deployment platform of the Fantom (FTM) blockchain. It is a decentralized and permissionless application development layer that supports the operation of decentralized applications (dApps) on the Fantom network. Opera is designed to provide a seamless environment for developers to create and deploy smart contracts using Fantom's unique features.

To put it simply, the Fantom network is like a city, and Fantom Opera is like its downtown, full of hip offices, workshops, and opportunities. Smart and productive people get there to make their ideas come to life. When it comes to blockchain, these ideas are dApps, and thanks to Opera, creators and developers get the necessary tools and environments to work on them.

What is Fantom crypto: Fantom OPERA.

One of the key aspects of Fantom Opera is its compatibility with the Ethereum Virtual Machine (EVM) and support for the Solidity programming language. Such a feature allows developers to leverage their existing knowledge and experience with Ethereum to build and deploy dApps on the Fantom network. So, Fantom enables developers to easily port their Ethereum-based projects to the Fantom ecosystem.

Think of this as the Brooklyn Bridge. Manhattan locals can easily reach Brooklynittes, and vice versa. This enables fast and effective exchange of information, ideas, experience, and everything in between. So this connection between Fantom and Ethereum does exactly that, just in blockchain terms.

Therefore, the list of Fantom ecosystem projects has such names as Sushiswap, Beefy, and similar ones, including over 250 NFT projects. For an ecosystem that’s relatively young, these are fascinating numbers.

Of course, it’s easy to talk about dApps when you understand them. But if you don’t, no worries, I’ve covered them in a separate section - check it out!

Wrapping Up

That's it, now you know “What is Fantom crypto?”, “What is FTM crypto?”, and all about the landscape of Fantom ecosystem projects.

Overall, it can be concluded that Fantom was created to address the scalability and security challenges faced by existing competitor blockchains, and to provide an effective, robust infrastructure for dApps. In order to achieve this, the Fantom team created FTM, Fantom’s native utility token, and found novelty solutions for making the whole structure more solid, efficient, and scalable.

DeFi opportunities and open possibilities<\/strong>.<\/p>\nBut, once again, Aave may appear confusing for crypto beginners, simply because it’s not merely a cryptocurrency or a blockchain network. It’s a DeFi protocol that functions as a decentralized crypto lending platform that lets users borrow and lend crypto<\/strong>. And, naturally, understanding this requires having quite a solid base of the crypto fundamentals. Nevertheless, if you’re looking to get Aave explained, you’ve come to the right place!<\/p>\nIn this section, we’re going to delve into questions that range from “What is Aave crypto?” to “How to use Aave crypto,” and cover everything in between.<\/p>\nWithout wasting any time, let’s jump right into it!<\/em><\/p>\n<h2>What is Aave Crypto?<\/h2>\nSo, let’s begin by laying out the foundations. The core question is, naturally - what is Aave crypto?<\/strong><\/p>\nIn dry theory, Aave presents itself as a “decentralized non-custodial liquidity market protocol where users can participate as suppliers or borrowers<\/em>.” The attractive part about becoming a supplier is the fact that it allows users to earn a passive income<\/strong>. But, such an explanation is overly technical, and half of the words used here need explainer sections of their own! Therefore, let’s get a bit more down to earth.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: decentralized non-custodial liquidity market protocol.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-01.jpg/" alt=\"What is Aave Crypto: decentralized non-custodial liquidity market protocol.\" width=\"1000\" height=\"524\"><\/p>\nIn Finnish, “Aave” means “ghost.” Introduced back in 2017, it’s a groundbreaking DeFi protocol that operates on the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-ethereum/">Ethereum blockchain<\/strong><\/a>. What makes Aave so special is the fact that it transformed the landscape of lending and borrowing in the crypto industry<\/strong>. There was a gap in the market, an opportunity for a promising project to enter the crypto space and offer something new, when it comes to this kind of cryptocurrency-related activities. Aave did just that.<\/p>\nAave’s core principles are rooted in decentralization, transparency, and accessibility. Through <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-smart-contracts/">smart contracts<\/a>, Aave allows users to lend and borrow cryptocurrencies seamlessly, without relying on traditional financial institutions, such as banks<\/strong>. And, even though today that doesn’t sound so revolutionary, this was a game-changing service back then. As of writing, the Aave system enables users to lend or borrow 17 different cryptocurrencies.<\/p>\nAave protocol's unique features and user-centric approach have made it a prominent player in the DeFi space, driving the adoption of decentralized financial services. Aave was created with a very clear mission – to allow users to lend and borrow different cryptocurrencies and tokens. For example, users can supply assets like <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-stablecoin/">stablecoins or tokens, and, eventually, see returns from this investment<\/strong>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: returns.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-02.jpg/" alt=\"What is Aave Crypto: returns.\" width=\"1000\" height=\"567\"><\/p>\nThese returns vary depending on the asset, blockchain, supply and demand, and the version of Aave that’s being used. As of August 2023, there are three versions: Aave v1, v2, and v3<\/strong>, each with its own upgrades!<\/p>\nThough, crypto lending and borrowing discussions require that the viewer feels confident about such concepts as smart contracts. Therefore, if you feel like your knowledge needs some refreshing, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-smart-contracts/">check this section<\/strong><\/a>, where I cover this topic in more detail!<\/em><\/p>\nOkay, so that was a very brief introduction about what makes Aave more than just yet another cryptocurrency. But, as you might have already noticed, when it comes to understanding how does Aave crypto work, the learning curve is pretty steep. So, let’s begin by dissecting the daunting-looking, yet essential crypto concepts that constitute the Aave project.<\/p>\n<h2>What is Crypto Lending & Borrowing?<\/h2>\nIt’s impossible to answer the question of “What is Aave crypto?” without addressing a more fundamental question of “What is crypto lending?<\/strong>” So, let’s have a quick rundown of the concept.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: crypto lending.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-03.jpg/" alt=\"What is Aave Crypto: crypto lending.\" width=\"1000\" height=\"595\"><\/p>\nEver since crypto lending came around in 2020, it has revolutionized the world of DeFi, unlocking new possibilities for both lenders and borrowers. With crypto lending, individuals can now generate passive income while borrowers can access instant cash without facing tax-related unpleasant experiences.<\/p>\nAt its core, crypto lending functions similarly to traditional lending, with one party lending cryptocurrency to another in exchange for interest payments<\/strong>. However, there are significant differences that make it stand out.<\/p>\nUnlike traditional banks, crypto loans are facilitated through <a href=https://www.bitdegree.org/"//crypto//best-cryptocurrency-exchange/">centralized exchanges<\/strong><\/a> or decentralized finance protocols such as AAVE. As you can see, Aave is a reference point when it comes to this crucial DeFi aspect.<\/p>\nWhat makes crypto lending special is the absence of formal intermediaries<\/strong> that are usually seen as unavoidable with such institutions as banks. Instead, crypto lending relies on smart contracts that automate the entire process, including repayment terms and costs agreed upon in advance. Moreover, crypto lending doesn't require registration with any regulatory authority<\/strong>, offering a borderless lending experience through Web3 wallets.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: crypto borrowing.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-04.jpg/" alt=\"What is Aave Crypto: crypto borrowing.\" width=\"1000\" height=\"474\"><\/p>\nThink of it as buying a can of coke from a vending machine, which allows you to skip any interactions with cashiers, or waiting in grocery store lines!<\/p>\nNow, to lend assets on Aave, users need to select the network and version of the Aave that they’re using, as well as choose the asset they want to supply<\/strong>. After confirming the transaction in their in-browser wallet, users can provide the desired amount of the asset.<\/p>\nBorrowing assets follows a similar process but in reverse. Users must supply assets as <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-collateral/">collateral before being able to borrow<\/strong>. The maximum amount you can borrow depends on the amount you deposit and the \"health factor,\" which represents the safety of your collateral. It's important to keep the health factor above 1 to ensure the safety of your deposit.<\/p>\nBut this covers only the surface of what’s possible with Aave. Therefore, let’s dive deeper into what exactly has Aave offered to the crypto lending & borrowing industry.<\/p>\n<h2>What Makes Aave Different?<\/h2>\nOne way to establish your name within the industry is to offer something new. And, introducing several key innovations that have changed the industry, was exactly what Aave did.<\/p>\nFirst of all, flash loans<\/strong> must be mentioned. Aave popularized the concept of flash loans, which allow users to borrow assets without requiring collateral<\/strong>, as long as the borrowed amount is returned within the same <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum transaction.<\/p>\nFlash loans have revolutionized the DeFi ecosystem by enabling arbitrage opportunities and complex financial strategies<\/strong>, expanding the possibilities for developers and traders.<\/p>\nSounds complicated? Don’t worry, there's a separate <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//how-to-arbitrage-crypto/">section covering crypto arbitrage<\/strong><\/a> in this Crypto 101 Handbook, so be sure to check it out!<\/em><\/p>\nOkay, back to answering “What is Aave crypto and what makes Aave so special?\" As mentioned before, flash loans differ from usual crypto loans because they allow users to borrow crypto without providing collateral. But it’s not that easy. Not anyone can take out a flash loan<\/strong>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: flash loan.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-05.jpg/" alt=\"What is Aave Crypto: flash loan.\" width=\"1000\" height=\"516\"><\/p>\nFlash loans serve as a specialized feature tailored towards developers<\/strong>, leveraging their technical expertise to execute such transactions. With flash loans, individuals have the ability to borrow assets without the need for collateral, provided the liquidity is promptly returned to the protocol within a single block transaction. This requires technical knowledge, which makes the answer to “How to use Aave crypto?” not that simple!<\/p>\nTo receive a flash loan, a well-crafted contract is required<\/strong>. This contract acts as the gateway for requesting a flash loan, initiating the series of steps outlined within its code. The crucial aspect lies in the seamless execution of these instructed steps, ensuring that the loan amount, along with the accrued interest and fees, is repaid, all within the confines of a single transaction.<\/p>\nUp next, we’ve got the fact that Aave offered a novel approach to interest rates<\/strong>. In fact, Aave introduced a new interest rate model called \"interest rate swaps<\/strong>.\" This model allows users to choose between stable or variable interest rates for their borrowing positions. Users can switch between different interest rate types based on market conditions and their risk appetite, providing flexibility and control over their borrowing costs.<\/p>\nSuch a flexible approach immediately put Aave on the front lines of the crypto borrowing game, since this meant more freedom and individually-tailored opportunities for different DeFi investors<\/strong>. And that’s a strong advantage, taking into account how different most of the DeFi investors and their financial positions are.<\/p>\nAmong other novelties, Aave made its name by introducing “undercollateralized loans<\/strong>”, which are also known as credit delegation<\/strong>. This feature allows users to delegate their borrowing power to trusted individuals or institutions, who can then borrow assets without providing the full collateral themselves. It enables creditworthiness assessment and the utilization of credit lines in a decentralized manner<\/strong>, expanding access to borrowing opportunities.<\/p>\nOne way to think of it is like lending to a trusted friend or a family member. You know their behavior, whether they could be trusted, and if it makes sense to expect them to pay you back what they owe. If it’s a trusted individual, you’ll be able to lend them some money without collateral. Their reputation speaks for itself.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: aTokens.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-06.jpg/" alt=\"What is Aave Crypto: aTokens.\" width=\"1000\" height=\"504\"><\/p>\nMoving further, there’s also “market-based collateralization<\/strong>.” Aave introduced this concept, where users can deposit their assets into the protocol and receive something known as aTokens in return. These aTokens represent the value of the deposited assets and accrue interest in real-time<\/strong>. Enthusiasts can use aTokens as collateral to borrow other assets, allowing them to leverage their existing holdings without needing to sell them.<\/p>\nWhat’s interesting about aTokens is that their value is pegged to the value of the corresponding deposited asset at a 1:1 ratio<\/strong>. Such a feature allows them to be safely stored, transferred or traded, thus creating more opportunities for the Aave ecosystem to grow and develop. All interest collected by the aTokens is distributed to their holders by continuously increasing their wallet balance.<\/p>\nAnd finally, something that must be mentioned is the fact that Aave has implemented a governance system <\/strong>that allows Aave token holders to propose and vote on protocol upgrades, improvements, and risk management parameters. Additionally, Aave introduced a Safety Module<\/strong>, where users can deposit Aave tokens to act as insurance against possible protocol risks. This safety mechanism protects the protocol and users from potential losses.<\/p>\n<h2>Wrapping Up<\/h2>\nSo, I’ve taken a look into the overall Aave meaning in crypto, what makes this project so special, and what kind of services does Aave provide. Therefore, now, I'm sure you'll know the answer to the question of “What is Aave crypto?”<\/p>\nAs you have probably noticed, Aave is definitely not the most convenient starting point for those who are new in the crypto space<\/strong>. Nevertheless, understanding crypto lending and borrowing is not only key to understanding Aave, but DeFi, as a whole, and being able to see how many hidden layers or opportunities await those who are eager enough to keep on learning and growing.<\/p>","definition":"Did you know that one of the stand-out features of Aave are flash loans, which allow users to borrow assets without collateral?","status":"published","meta_title":"What is Aave Crypto and How Does It Work?","meta_description":"If you want to know what is AAVE crypto, how to use AAVE, and how does it work, you're in luck, because you'll find all answers right here!","meta_keywords":"what is aave crypto, aave meaning crypto, aave explained, how does aave crypto work, how to use aave crypto, aave defi explained","modified_content":"In this section, I’m going to answer the question of “What is Aave crypto?<\/strong>”, and take a look into how does Aave crypto work.<\/p>\nFor newcomers, it’s a challenge to talk about the Aave meaning in crypto, when most don’t even know how to pronounce it! But such a minor obstacle should not keep us from learning about how to use Aave crypto, since for those who know, it’s a treasure chest full of new <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-defi/">DeFi opportunities and open possibilities<\/strong>.<\/p>\nBut, once again, Aave may appear confusing for crypto beginners, simply because it’s not merely a cryptocurrency or a blockchain network. It’s a DeFi protocol that functions as a decentralized crypto lending platform that lets users borrow and lend crypto<\/strong>. And, naturally, understanding this requires having quite a solid base of the crypto fundamentals. Nevertheless, if you’re looking to get Aave explained, you’ve come to the right place!<\/p>\nIn this section, we’re going to delve into questions that range from “What is Aave crypto?” to “How to use Aave crypto,” and cover everything in between.<\/p>\nWithout wasting any time, let’s jump right into it!<\/em><\/p>\n<h2>What is Aave Crypto?<\/h2>\nSo, let’s begin by laying out the foundations. The core question is, naturally - what is Aave crypto?<\/strong><\/p>\nIn dry theory, Aave presents itself as a “decentralized non-custodial liquidity market protocol where users can participate as suppliers or borrowers<\/em>.” The attractive part about becoming a supplier is the fact that it allows users to earn a passive income<\/strong>. But, such an explanation is overly technical, and half of the words used here need explainer sections of their own! Therefore, let’s get a bit more down to earth.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: decentralized non-custodial liquidity market protocol.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-01.jpg/" alt=\"What is Aave Crypto: decentralized non-custodial liquidity market protocol.\" width=\"1000\" height=\"524\"><\/p>\nIn Finnish, “Aave” means “ghost.” Introduced back in 2017, it’s a groundbreaking DeFi protocol that operates on the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-ethereum/">Ethereum blockchain<\/strong><\/a>. What makes Aave so special is the fact that it transformed the landscape of lending and borrowing in the crypto industry<\/strong>. There was a gap in the market, an opportunity for a promising project to enter the crypto space and offer something new, when it comes to this kind of cryptocurrency-related activities. Aave did just that.<\/p>\nAave’s core principles are rooted in decentralization, transparency, and accessibility. Through <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-smart-contracts/">smart contracts<\/a>, Aave allows users to lend and borrow cryptocurrencies seamlessly, without relying on traditional financial institutions, such as banks<\/strong>. And, even though today that doesn’t sound so revolutionary, this was a game-changing service back then. As of writing, the Aave system enables users to lend or borrow 17 different cryptocurrencies.<\/p>\nAave protocol's unique features and user-centric approach have made it a prominent player in the DeFi space, driving the adoption of decentralized financial services. Aave was created with a very clear mission – to allow users to lend and borrow different cryptocurrencies and tokens. For example, users can supply assets like <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-stablecoin/">stablecoins or tokens, and, eventually, see returns from this investment<\/strong>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: returns.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-02.jpg/" alt=\"What is Aave Crypto: returns.\" width=\"1000\" height=\"567\"><\/p>\nThese returns vary depending on the asset, blockchain, supply and demand, and the version of Aave that’s being used. As of August 2023, there are three versions: Aave v1, v2, and v3<\/strong>, each with its own upgrades!<\/p>\nThough, crypto lending and borrowing discussions require that the viewer feels confident about such concepts as smart contracts. Therefore, if you feel like your knowledge needs some refreshing, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-smart-contracts/">check this section<\/strong><\/a>, where I cover this topic in more detail!<\/em><\/p>\nOkay, so that was a very brief introduction about what makes Aave more than just yet another cryptocurrency. But, as you might have already noticed, when it comes to understanding how does Aave crypto work, the learning curve is pretty steep. So, let’s begin by dissecting the daunting-looking, yet essential crypto concepts that constitute the Aave project.<\/p>\n<h2>What is Crypto Lending & Borrowing?<\/h2>\nIt’s impossible to answer the question of “What is Aave crypto?” without addressing a more fundamental question of “What is crypto lending?<\/strong>” So, let’s have a quick rundown of the concept.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: crypto lending.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-03.jpg/" alt=\"What is Aave Crypto: crypto lending.\" width=\"1000\" height=\"595\"><\/p>\nEver since crypto lending came around in 2020, it has revolutionized the world of DeFi, unlocking new possibilities for both lenders and borrowers. With crypto lending, individuals can now generate passive income while borrowers can access instant cash without facing tax-related unpleasant experiences.<\/p>\nAt its core, crypto lending functions similarly to traditional lending, with one party lending cryptocurrency to another in exchange for interest payments<\/strong>. However, there are significant differences that make it stand out.<\/p>\nUnlike traditional banks, crypto loans are facilitated through <a href=https://www.bitdegree.org/"//crypto//best-cryptocurrency-exchange/">centralized exchanges<\/strong><\/a> or decentralized finance protocols such as AAVE. As you can see, Aave is a reference point when it comes to this crucial DeFi aspect.<\/p>\nWhat makes crypto lending special is the absence of formal intermediaries<\/strong> that are usually seen as unavoidable with such institutions as banks. Instead, crypto lending relies on smart contracts that automate the entire process, including repayment terms and costs agreed upon in advance. Moreover, crypto lending doesn't require registration with any regulatory authority<\/strong>, offering a borderless lending experience through Web3 wallets.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: crypto borrowing.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-04.jpg/" alt=\"What is Aave Crypto: crypto borrowing.\" width=\"1000\" height=\"474\"><\/p>\nThink of it as buying a can of coke from a vending machine, which allows you to skip any interactions with cashiers, or waiting in grocery store lines!<\/p>\nNow, to lend assets on Aave, users need to select the network and version of the Aave that they’re using, as well as choose the asset they want to supply<\/strong>. After confirming the transaction in their in-browser wallet, users can provide the desired amount of the asset.<\/p>\nBorrowing assets follows a similar process but in reverse. Users must supply assets as <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-collateral/">collateral before being able to borrow<\/strong>. The maximum amount you can borrow depends on the amount you deposit and the \"health factor,\" which represents the safety of your collateral. It's important to keep the health factor above 1 to ensure the safety of your deposit.<\/p>\nBut this covers only the surface of what’s possible with Aave. Therefore, let’s dive deeper into what exactly has Aave offered to the crypto lending & borrowing industry.<\/p>\n<h2>What Makes Aave Different?<\/h2>\nOne way to establish your name within the industry is to offer something new. And, introducing several key innovations that have changed the industry, was exactly what Aave did.<\/p>\nFirst of all, flash loans<\/strong> must be mentioned. Aave popularized the concept of flash loans, which allow users to borrow assets without requiring collateral<\/strong>, as long as the borrowed amount is returned within the same <a href=https://www.bitdegree.org/"//crypto//buy-ethereum-eth/">Ethereum transaction.<\/p>\nFlash loans have revolutionized the DeFi ecosystem by enabling arbitrage opportunities and complex financial strategies<\/strong>, expanding the possibilities for developers and traders.<\/p>\nSounds complicated? Don’t worry, there's a separate <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//how-to-arbitrage-crypto/">section covering crypto arbitrage<\/strong><\/a> in this Crypto 101 Handbook, so be sure to check it out!<\/em><\/p>\nOkay, back to answering “What is Aave crypto and what makes Aave so special?\" As mentioned before, flash loans differ from usual crypto loans because they allow users to borrow crypto without providing collateral. But it’s not that easy. Not anyone can take out a flash loan<\/strong>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: flash loan.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-05.jpg/" alt=\"What is Aave Crypto: flash loan.\" width=\"1000\" height=\"516\"><\/p>\nFlash loans serve as a specialized feature tailored towards developers<\/strong>, leveraging their technical expertise to execute such transactions. With flash loans, individuals have the ability to borrow assets without the need for collateral, provided the liquidity is promptly returned to the protocol within a single block transaction. This requires technical knowledge, which makes the answer to “How to use Aave crypto?” not that simple!<\/p>\nTo receive a flash loan, a well-crafted contract is required<\/strong>. This contract acts as the gateway for requesting a flash loan, initiating the series of steps outlined within its code. The crucial aspect lies in the seamless execution of these instructed steps, ensuring that the loan amount, along with the accrued interest and fees, is repaid, all within the confines of a single transaction.<\/p>\nUp next, we’ve got the fact that Aave offered a novel approach to interest rates<\/strong>. In fact, Aave introduced a new interest rate model called \"interest rate swaps<\/strong>.\" This model allows users to choose between stable or variable interest rates for their borrowing positions. Users can switch between different interest rate types based on market conditions and their risk appetite, providing flexibility and control over their borrowing costs.<\/p>\nSuch a flexible approach immediately put Aave on the front lines of the crypto borrowing game, since this meant more freedom and individually-tailored opportunities for different DeFi investors<\/strong>. And that’s a strong advantage, taking into account how different most of the DeFi investors and their financial positions are.<\/p>\nAmong other novelties, Aave made its name by introducing “undercollateralized loans<\/strong>”, which are also known as credit delegation<\/strong>. This feature allows users to delegate their borrowing power to trusted individuals or institutions, who can then borrow assets without providing the full collateral themselves. It enables creditworthiness assessment and the utilization of credit lines in a decentralized manner<\/strong>, expanding access to borrowing opportunities.<\/p>\nOne way to think of it is like lending to a trusted friend or a family member. You know their behavior, whether they could be trusted, and if it makes sense to expect them to pay you back what they owe. If it’s a trusted individual, you’ll be able to lend them some money without collateral. Their reputation speaks for itself.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Aave Crypto: aTokens.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-aave-crypto-06.jpg/" alt=\"What is Aave Crypto: aTokens.\" width=\"1000\" height=\"504\"><\/p>\nMoving further, there’s also “market-based collateralization<\/strong>.” Aave introduced this concept, where users can deposit their assets into the protocol and receive something known as aTokens in return. These aTokens represent the value of the deposited assets and accrue interest in real-time<\/strong>. Enthusiasts can use aTokens as collateral to borrow other assets, allowing them to leverage their existing holdings without needing to sell them.<\/p>\nWhat’s interesting about aTokens is that their value is pegged to the value of the corresponding deposited asset at a 1:1 ratio<\/strong>. Such a feature allows them to be safely stored, transferred or traded, thus creating more opportunities for the Aave ecosystem to grow and develop. All interest collected by the aTokens is distributed to their holders by continuously increasing their wallet balance.<\/p>\nAnd finally, something that must be mentioned is the fact that Aave has implemented a governance system <\/strong>that allows Aave token holders to propose and vote on protocol upgrades, improvements, and risk management parameters. Additionally, Aave introduced a Safety Module<\/strong>, where users can deposit Aave tokens to act as insurance against possible protocol risks. This safety mechanism protects the protocol and users from potential losses.<\/p>\n<h2>Wrapping Up<\/h2>\nSo, I’ve taken a look into the overall Aave meaning in crypto, what makes this project so special, and what kind of services does Aave provide. Therefore, now, I'm sure you'll know the answer to the question of “What is Aave crypto?”<\/p>\nAs you have probably noticed, Aave is definitely not the most convenient starting point for those who are new in the crypto space<\/strong>. Nevertheless, understanding crypto lending and borrowing is not only key to understanding Aave, but DeFi, as a whole, and being able to see how many hidden layers or opportunities await those who are eager enough to keep on learning and growing.<\/p>","youtube_video":null}" :prev-section="{"id":611,"chapter_id":2,"order":13,"featured_image_id":3502,"youtube_video_id":95,"author_id":4,"created_at":"2023-07-21T12:57:46.000000Z","updated_at":"2023-12-27T20:03:47.000000Z","slug":"what-is-luna-crypto","title":"The Bumpy Road of Terra (LUNA)","content":"In this section, we’re going to talk about what is<\/strong> Terra Luna coin<\/strong>, and what is Luna’s importance in crypto history!<\/span><\/p>\nThe question of “What is Luna crypto?<\/em>” is something that everyone who will ever get into crypto will have to ask, since the name “Terra Luna” is something that you can’t ignore. If there ever was a crypto history book, the Terra (Luna) story would be among the most crucial of chapters. Terra (Luna) embodies some of the most painful lessons that the crypto industry had to go through<\/strong>.<\/p>\nAnd yet, whether these lessons have been fully learned remains an open question. But there’s one thing that everyone agrees on. It’s the fact that the Terra (Luna) story proved how quick things can change<\/strong>, and, in this case, not for the better.<\/p>\nIn this section, we’re going to answer the questions of what is Terra Luna coin and why is it important to know about it. Besides that, we’ll get into more specific details, such as the Terra blockchain, and answer the question, “What network is Terra Luna on?<\/em>” After finishing this section, you’ll be familiar with the Terra (Luna) saga, and the intricacies that make this story so special and important.<\/p>\nLet’s get to it!<\/em><\/p>\n<h2>The Beginning<\/h2>\nTo begin understanding the story of Terra Luna, let’s go back to 2018. This is the year when two prominent minds - Daniel Shin<\/strong>, the co-founder of one of the largest e-commerce platforms in South Korea, and Do Kwon<\/strong>, an eager entrepreneur, and a Stanford Computer Science graduate, came together and founded Terraform Labs<\/strong>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Daniel Shin and Do Kwon.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-01.jpg/" alt=\"What is Luna crypto: Daniel Shin and Do Kwon.\" width=\"1000\" height=\"517\"><\/p>\nTerraform Labs was created with the goal of building a decentralized and price-stable cryptocurrency<\/strong> that could eventually transform the world of finance. To do so, the company created their own blockchain, which was called the Terra blockchain<\/strong>.<\/p>\nThis allowed them to present to the world a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-stablecoin/" target=\"_blank\" rel=\"noopener\">stablecoin<\/strong><\/a> that was native to the Terra blockchain. It was called TerraUSD<\/strong>, or simply “UST.” It was supposed to be a very intricate coin, which relied on another crypto coin - Luna<\/strong>, which was also native to the Terra blockchain.<\/p>\nThis project was all about combining the best of the two worlds<\/strong>: the decentralization possible in the crypto realm, and the stability of traditional bank-issued <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-fiat/" target=\"_blank\" rel=\"noopener\">fiat money<\/strong><\/a>. A successful combination of these two ingredients would result in a stablecoin, a coin with a stable price of $1. Though, do note that some stablecoins are pegged to a fiat currency, like the US dollar, while others rely on sophisticated algorithms to remain stable. Terra USD was an algorithmic stablecoin<\/strong>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Terra blockchain, TerraUSD, and Luna.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-02.jpg/" alt=\"What is Luna crypto: Terra blockchain, TerraUSD, and Luna.\" width=\"1000\" height=\"592\"><\/p>\nThe Terra blockchain, the TerraUSD stablecoin, and the Luna coin were supposed to be the three ingredients that were needed to create the DeFi-transforming crypto solution<\/strong>. Right from the beginning, Terraform Labs received critical acclaim and interest from investors.<\/p>\nDuring the initial funding round, the company raised $32 million. Among investors were such names as <a href=https://www.bitdegree.org/"//crypto//goon//binance/" target=\"_blank\" rel=\"nofollow noindex noopener\">Binance Labs<\/strong><\/a> or <a href=https://www.bitdegree.org/"//crypto//goon//huobi/" target=\"_blank\" rel=\"nofollow noindex noopener\">Huobi Capital<\/strong><\/a>. The world believed in Terraform Labs’ potential.<\/p>\nSo, what was so special about this supposedly revolutionary crypto solution?<\/em> Well, on the surface, it looked like brilliant minds really came up with a brilliant idea. Before things really went down, this mechanism seemed to be effective, promising, and game-changing.<\/p>\n<h2>Algorithmic Stablecoin<\/h2>\nAs said before, TerraUSD, the stablecoin, was an algorithmic stablecoin. This means that it relied on a complex mechanism that involved algorithmic adjustments of the money supply based on <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-supply-and-demand/" target=\"_blank\" rel=\"noopener\">supply and demand<\/a> dynamics<\/strong>, so it could operate while automatically ensuring price stability and mitigating volatility risks.<\/p>\nHere’s how this mechanism worked.<\/em><\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Luna discount.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-03.jpg/" alt=\"What is Luna crypto: TerraUSD burning mechanism.\" width=\"1000\" height=\"501\"><\/p>\nWhen the market demand for TerraUSD soared, surpassing its target value, which was a fixed price of $1, the system was set to stabilize it. TerraUSD holders were enticed to burn their TerraUSD in exchange for discounted Luna<\/strong>, thereby reducing the supply of TerraUSD and restoring its price to the desired level.<\/p>\nThis process of burning TerraUSD played a crucial role in maintaining the stability that a stablecoin requires. Additionally, to maintain stability, a stability fee was imposed on TerraUSD transactions<\/strong>, usually paid in Luna. This fee served as a compelling economic incentive, motivating participants to diligently uphold the stability of the entire ecosystem.<\/p>\nTo make things clearer, let’s get more particular.<\/em><\/p>\nFor example, if the price of TerraUSD would fall to, let’s say, $0.95, the algorithm would step in and solve the problem. Since you were supposed to always be able to exchange 1 TerraUSD for $1 worth of Luna, this would mean that every TerraUSD holder could make an immediate $0.05 profit by exchanging the TerraUSD for $1 worth of Luna<\/strong>. This would result in people making a profit, while the supply of Terra USD would reduce and make its price increase again back to $1.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: making profit with TerraUSD.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-04.jpg/" alt=\"What is Luna crypto: making profit with TerraUSD.\" width=\"1000\" height=\"610\"><\/p>\nBut what if so many TerraUSD coins would get burned that its price would actually increase over $1, and reach, let’s say, $1.03?<\/em> This would mean that Luna holders could burn $1 worth of Luna and once again make a profit<\/strong>, thus increasing the amount of Terra USD coins, and reducing its value.<\/p>\nThrough these meticulously crafted mechanisms, TerraUSD successfully maintained its peg and provided a solid foundation within the Terra ecosystem.<\/p>\nWhen you put it down like this, it <\/strong>makes it easier to understand why Terraform Labs was so successful. This truly seemed like a revolutionary solution! But… as the most devastating fires can start from a single unattended candle, so did this seemingly-flawless mechanism fall apart when the weak chain link suddenly made itself present<\/strong>.<\/p>\n<h2>Anchor Protocol<\/h2>\nTechnical ingenuity is rarely the reason behind a company’s or product’s success. There often has to be something more. A charismatic leader, a great ad campaign, or, for example, an opportunity to make money.<\/p>\nAnd, of course, the creators behind Terra Luna had something else up their sleeves. The trick was called: passive income<\/strong>. They knew how to make the word spread, and get people googling “what is Luna crypto?<\/em>”.<\/p>\nTerraform Labs unveiled something that at first may have seemed to be too good to be true. And as it later turned out – it was.<\/p>\nIt was called the Anchor Protocol<\/strong> – a stablecoin savings platform, where users could deposit their Terra stablecoins, and earn interest on their deposits.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: the Anchor Protocol.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-05.jpg/" alt=\"What is Luna crypto: the Anchor Protocol.\" width=\"1000\" height=\"548\"><\/p>\nThis was possible by utilizing the yield generated from sources such as stablecoin stability fees, transaction fees, and similar yet related sources.<\/p>\nIt was something like a savings account but for TerraUSD<\/strong>. And, at one point, this “TerraUSD savings account” caught everyone’s attention for a reason. Those who chose to keep their assets in it were promised 20% annual interest<\/strong>. It basically meant that if you locked away 1000 TerraUSD, you’d receive $200 for doing nothing. So, the word spread, and Terra’s project took off even faster.<\/p>\n<h2>Do Kwon’s Antics<\/h2>\nTo continue answering the “What is Luna crypto?<\/em>” question, it’s important to take Do Kwon and his behavior into account<\/strong>. It very much contributed to the reason why this story got so famous.<\/p>\nFrom its launch in 2019 till 2021, Luna’s price increased over 100 times, reaching an all-time high of $119, eventually becoming one of the top cryptocurrencies. This further continued to raise the coin’s value and inflated people’s trust in it, as well as Do Kwon’s ego.<\/p>\nAs mentioned before, Do Kwon was one of Terraform Labs’ co-founders. But, at this point, his role in the company grew, and eventually, he became the face of the Terra project<\/strong>. Kwon enjoyed this fame and didn’t even pretend to be humble.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Do Kwon.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-06.jpg/" alt=\"What is Luna crypto: Do Kwon.\" width=\"1000\" height=\"467\"><\/p>\nWith a Twitter bio stating that he’s the ‘Master of Stablecoin<\/em>’, and with increasing confidence, he proudly rocked the fact that he’s been listed on the “Forbes 30 under 30<\/em>” list. A successful company, run by a charismatic, clever, confident and insightful leader - it was truly the ultimate combo that promised a bright future, and Do Kwon was the captain of the ship that was taking humanity in this direction.<\/p>\nBut fame did get into Do Kwon’s head<\/strong>. A problem with his attitude started appearing. His arrogant rhetoric blinded him, even when people were sending warnings about the vulnerable points of the Terra project. Instead of listening to them, he resorted to calling them ‘poor<\/em>’. And then, Do Kwon was about to learn a painful lesson.<\/p>\n<h2>Sudden Collapse<\/h2>\nIn March 2022, Anchor Protocol, the already-described TerraUSD savings account, announced that they’d be replacing the fixed 20% interest rate with a variable rate. This caused a panic signal.<\/p>\nPeople started burning their TerraUSD in exchange for Luna<\/strong>. Its price started freefalling, since its quantity inflated very quickly. This was another panic signal, which resulted in people continuing to dump their TerraUSD. Luna’s price continued falling down – the balance mechanism was breaking apart.<\/p>\nA death spiral began spinning, Luna crashed to unseen lows, and hasn’t recovered ever since<\/strong>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Terra collapse.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-07.jpg/" alt=\"What is Luna crypto: Terra collapse.\" width=\"1000\" height=\"534\"><\/p>\nThe “unsinkable<\/em>” crypto project crashed into an iceberg. Despite a recovery plan being announced and efforts put into restoring the TerraUSD peg to the dollar, things don’t really seem to get better<\/strong>. And it got more and more clear that the Luna coin, together with the TerraUSD stablecoin, were banished into the crypto crypt, where they were about to join the other failed coins.<\/p>\nIn just around 3 days, over $40 billion of value just evaporated. Thousands of investors lost their savings. This was a crisis, and people were angry.<\/p>\n<h2>Do Kwon’s Escape<\/h2>\nThe severity of the situation meant that Do Kwon was in trouble<\/strong>. Many people lost a lot of money. And the man behind the Terra Luna project was the one responsible for all of that.<\/p>\nAt first, the police were sent to guard Do Kwon’s family in South Korea. Law enforcement officers expected Do Kwon to be cooperative and good-willed, since the whole Terra Luna collapse seemed more like a disaster, and not like a malicious master plan executed recklessly.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Do Kwon fled.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-08.jpg/" alt=\"What is Luna crypto: Do Kwon fled.\" width=\"1000\" height=\"571\"><\/p>\nBut they were in for a surprise. The police in Singapore, the country where Terraform Labs was registered, eventually realized that Do Kwon had fled<\/strong>. He immediately tweeted that he was “not on the run<\/em>.”<\/p>\nBut Korean prosecutors stated the obvious – he’s most definitely on the run. And to catch him, the country had asked for global police assistance. This resulted in Do Kwon receiving a “red notice” from Interpol<\/strong>, which meant that, from now on, law enforcement agencies worldwide will go after him.<\/p>\nAnd, eventually, the news broke out that Do Kwon was arrested in Montenegro<\/strong>.<\/p>\n<h2>Terra Now<\/h2>\nFor what concerns the TerraUSD and Luna coins, a recovery plan was proposed<\/strong>. However, it didn’t really quite do what it was supposed to do. These two (now notorious) coins were rebranded into <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//terrausd-wormhole-ustc-price/">TerraClassicUSD and <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//terra-classic-lunc-price/">Terra Classic<\/strong><\/a>, respectively, so that people could easily differentiate between the “old<\/em>” failed project and the \"new<\/em>\" promising one.<\/p>\nAnd this “new<\/em>” project was called <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//terra-luna-luna-price/">Terra 2.0 (Luna)<\/strong><\/a>. It’s a new token, and it’s native to a new chain<\/strong>. The rules of its distribution were changed, and efforts were made to make it look like the “attack<\/em>” that took down the entire Terra Luna ecosystem resulted in unfair losses that must be compensated. Therefore, the new token was being airdropped to previous UST holders and believers in Terra Luna.<\/p>\nHowever, despite these efforts at reviving a failed ecosystem, the future of Terra 2.0 (Luna) does not look very bright<\/strong>. Well, in case of a recovery, that would be the comeback of the century.<\/p>\n<h2>Wrapping Up<\/h2>\nThis brings us to the end of the section. I hope that, by now, the questions like “What is Luna crypto?<\/em>”, “What is Terra Luna coin?<\/em>”, or “What network is Terra Luna on?<\/em>” will no longer bother you. And, in addition, you’ll know all about one of the most groundbreaking crypto collapse cases<\/strong> that has taken place. It’s a lesson for everyone, after all.<\/p>","definition":"Did you know that Terra (LUNA) started collapsing when the interest rate of the Anchor Protocol was changed?","status":"published","meta_title":"What is Terra (LUNA) in Crypto?","meta_description":"Find out all there is to know about what is Terra (LUNA) in crypto, including its infamous collapse and what followed after it.","meta_keywords":"what is luna crypto, what is terra luna coin, what network is terra luna on, terra blockchain","modified_content":"In this section, we’re going to talk about what is<\/strong> Terra Luna coin<\/strong>, and what is Luna’s importance in crypto history!<\/span><\/p>\nThe question of “What is Luna crypto?<\/em>” is something that everyone who will ever get into crypto will have to ask, since the name “Terra Luna” is something that you can’t ignore. If there ever was a crypto history book, the Terra (Luna) story would be among the most crucial of chapters. Terra (Luna) embodies some of the most painful lessons that the crypto industry had to go through<\/strong>.<\/p>\nAnd yet, whether these lessons have been fully learned remains an open question. But there’s one thing that everyone agrees on. It’s the fact that the Terra (Luna) story proved how quick things can change<\/strong>, and, in this case, not for the better.<\/p>\nIn this section, we’re going to answer the questions of what is Terra Luna coin and why is it important to know about it. Besides that, we’ll get into more specific details, such as the Terra blockchain, and answer the question, “What network is Terra Luna on?<\/em>” After finishing this section, you’ll be familiar with the Terra (Luna) saga, and the intricacies that make this story so special and important.<\/p>\nLet’s get to it!<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"What is Terra Luna? History & Crash Explained (ANIMATED)\"\n title=\"What is Terra Luna? History & Crash Explained (ANIMATED)\" class=\"border-0\">\n Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: The Bumpy Road of Terra (LUNA)<\/h4>\n Reading is not your thing? Watch the \"The Bumpy Road of Terra (LUNA)\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"lAQdQzF4KYM\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n What is Terra Luna? History & Crash Explained (ANIMATED)<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-terra-luna-history-crash-explained-animated.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-terra-luna-history-crash-explained-animated.jpg?tr=w-760 1000w\"\n alt=\"What is Terra Luna? History & Crash Explained (ANIMATED)\"\n title=\"What is Terra Luna? History & Crash Explained (ANIMATED)\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"What is Terra Luna? History & Crash Explained (ANIMATED)\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n SUBSCRIBE \n ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>The Beginning<\/h2>\nTo begin understanding the story of Terra Luna, let’s go back to 2018. This is the year when two prominent minds - Daniel Shin<\/strong>, the co-founder of one of the largest e-commerce platforms in South Korea, and Do Kwon<\/strong>, an eager entrepreneur, and a Stanford Computer Science graduate, came together and founded Terraform Labs<\/strong>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Daniel Shin and Do Kwon.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-01.jpg/" alt=\"What is Luna crypto: Daniel Shin and Do Kwon.\" width=\"1000\" height=\"517\"><\/p>\nTerraform Labs was created with the goal of building a decentralized and price-stable cryptocurrency<\/strong> that could eventually transform the world of finance. To do so, the company created their own blockchain, which was called the Terra blockchain<\/strong>.<\/p>\nThis allowed them to present to the world a <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-stablecoin/" target=\"_blank\" rel=\"noopener\">stablecoin<\/strong><\/a> that was native to the Terra blockchain. It was called TerraUSD<\/strong>, or simply “UST.” It was supposed to be a very intricate coin, which relied on another crypto coin - Luna<\/strong>, which was also native to the Terra blockchain.<\/p>\nThis project was all about combining the best of the two worlds<\/strong>: the decentralization possible in the crypto realm, and the stability of traditional bank-issued <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-fiat/" target=\"_blank\" rel=\"noopener\">fiat money<\/strong><\/a>. A successful combination of these two ingredients would result in a stablecoin, a coin with a stable price of $1. Though, do note that some stablecoins are pegged to a fiat currency, like the US dollar, while others rely on sophisticated algorithms to remain stable. Terra USD was an algorithmic stablecoin<\/strong>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Terra blockchain, TerraUSD, and Luna.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-02.jpg/" alt=\"What is Luna crypto: Terra blockchain, TerraUSD, and Luna.\" width=\"1000\" height=\"592\"><\/p>\nThe Terra blockchain, the TerraUSD stablecoin, and the Luna coin were supposed to be the three ingredients that were needed to create the DeFi-transforming crypto solution<\/strong>. Right from the beginning, Terraform Labs received critical acclaim and interest from investors.<\/p>\nDuring the initial funding round, the company raised $32 million. Among investors were such names as <a href=https://www.bitdegree.org/"//crypto//goon//binance/" target=\"_blank\" rel=\"nofollow noindex noopener\">Binance Labs<\/strong><\/a> or <a href=https://www.bitdegree.org/"//crypto//goon//huobi/" target=\"_blank\" rel=\"nofollow noindex noopener\">Huobi Capital<\/strong><\/a>. The world believed in Terraform Labs’ potential.<\/p>\nSo, what was so special about this supposedly revolutionary crypto solution?<\/em> Well, on the surface, it looked like brilliant minds really came up with a brilliant idea. Before things really went down, this mechanism seemed to be effective, promising, and game-changing.<\/p>\n<h2>Algorithmic Stablecoin<\/h2>\nAs said before, TerraUSD, the stablecoin, was an algorithmic stablecoin. This means that it relied on a complex mechanism that involved algorithmic adjustments of the money supply based on <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-supply-and-demand/" target=\"_blank\" rel=\"noopener\">supply and demand<\/a> dynamics<\/strong>, so it could operate while automatically ensuring price stability and mitigating volatility risks.<\/p>\nHere’s how this mechanism worked.<\/em><\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Luna discount.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-03.jpg/" alt=\"What is Luna crypto: TerraUSD burning mechanism.\" width=\"1000\" height=\"501\"><\/p>\nWhen the market demand for TerraUSD soared, surpassing its target value, which was a fixed price of $1, the system was set to stabilize it. TerraUSD holders were enticed to burn their TerraUSD in exchange for discounted Luna<\/strong>, thereby reducing the supply of TerraUSD and restoring its price to the desired level.<\/p>\nThis process of burning TerraUSD played a crucial role in maintaining the stability that a stablecoin requires. Additionally, to maintain stability, a stability fee was imposed on TerraUSD transactions<\/strong>, usually paid in Luna. This fee served as a compelling economic incentive, motivating participants to diligently uphold the stability of the entire ecosystem.<\/p>\nTo make things clearer, let’s get more particular.<\/em><\/p>\nFor example, if the price of TerraUSD would fall to, let’s say, $0.95, the algorithm would step in and solve the problem. Since you were supposed to always be able to exchange 1 TerraUSD for $1 worth of Luna, this would mean that every TerraUSD holder could make an immediate $0.05 profit by exchanging the TerraUSD for $1 worth of Luna<\/strong>. This would result in people making a profit, while the supply of Terra USD would reduce and make its price increase again back to $1.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: making profit with TerraUSD.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-04.jpg/" alt=\"What is Luna crypto: making profit with TerraUSD.\" width=\"1000\" height=\"610\"><\/p>\nBut what if so many TerraUSD coins would get burned that its price would actually increase over $1, and reach, let’s say, $1.03?<\/em> This would mean that Luna holders could burn $1 worth of Luna and once again make a profit<\/strong>, thus increasing the amount of Terra USD coins, and reducing its value.<\/p>\nThrough these meticulously crafted mechanisms, TerraUSD successfully maintained its peg and provided a solid foundation within the Terra ecosystem.<\/p>\nWhen you put it down like this, it <\/strong>makes it easier to understand why Terraform Labs was so successful. This truly seemed like a revolutionary solution! But… as the most devastating fires can start from a single unattended candle, so did this seemingly-flawless mechanism fall apart when the weak chain link suddenly made itself present<\/strong>.<\/p>\n<h2>Anchor Protocol<\/h2>\nTechnical ingenuity is rarely the reason behind a company’s or product’s success. There often has to be something more. A charismatic leader, a great ad campaign, or, for example, an opportunity to make money.<\/p>\nAnd, of course, the creators behind Terra Luna had something else up their sleeves. The trick was called: passive income<\/strong>. They knew how to make the word spread, and get people googling “what is Luna crypto?<\/em>”.<\/p>\nTerraform Labs unveiled something that at first may have seemed to be too good to be true. And as it later turned out – it was.<\/p>\nIt was called the Anchor Protocol<\/strong> – a stablecoin savings platform, where users could deposit their Terra stablecoins, and earn interest on their deposits.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: the Anchor Protocol.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-05.jpg/" alt=\"What is Luna crypto: the Anchor Protocol.\" width=\"1000\" height=\"548\"><\/p>\nThis was possible by utilizing the yield generated from sources such as stablecoin stability fees, transaction fees, and similar yet related sources.<\/p>\nIt was something like a savings account but for TerraUSD<\/strong>. And, at one point, this “TerraUSD savings account” caught everyone’s attention for a reason. Those who chose to keep their assets in it were promised 20% annual interest<\/strong>. It basically meant that if you locked away 1000 TerraUSD, you’d receive $200 for doing nothing. So, the word spread, and Terra’s project took off even faster.<\/p>\n<h2>Do Kwon’s Antics<\/h2>\nTo continue answering the “What is Luna crypto?<\/em>” question, it’s important to take Do Kwon and his behavior into account<\/strong>. It very much contributed to the reason why this story got so famous.<\/p>\nFrom its launch in 2019 till 2021, Luna’s price increased over 100 times, reaching an all-time high of $119, eventually becoming one of the top cryptocurrencies. This further continued to raise the coin’s value and inflated people’s trust in it, as well as Do Kwon’s ego.<\/p>\nAs mentioned before, Do Kwon was one of Terraform Labs’ co-founders. But, at this point, his role in the company grew, and eventually, he became the face of the Terra project<\/strong>. Kwon enjoyed this fame and didn’t even pretend to be humble.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Do Kwon.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-06.jpg/" alt=\"What is Luna crypto: Do Kwon.\" width=\"1000\" height=\"467\"><\/p>\nWith a Twitter bio stating that he’s the ‘Master of Stablecoin<\/em>’, and with increasing confidence, he proudly rocked the fact that he’s been listed on the “Forbes 30 under 30<\/em>” list. A successful company, run by a charismatic, clever, confident and insightful leader - it was truly the ultimate combo that promised a bright future, and Do Kwon was the captain of the ship that was taking humanity in this direction.<\/p>\nBut fame did get into Do Kwon’s head<\/strong>. A problem with his attitude started appearing. His arrogant rhetoric blinded him, even when people were sending warnings about the vulnerable points of the Terra project. Instead of listening to them, he resorted to calling them ‘poor<\/em>’. And then, Do Kwon was about to learn a painful lesson.<\/p>\n<h2>Sudden Collapse<\/h2>\nIn March 2022, Anchor Protocol, the already-described TerraUSD savings account, announced that they’d be replacing the fixed 20% interest rate with a variable rate. This caused a panic signal.<\/p>\nPeople started burning their TerraUSD in exchange for Luna<\/strong>. Its price started freefalling, since its quantity inflated very quickly. This was another panic signal, which resulted in people continuing to dump their TerraUSD. Luna’s price continued falling down – the balance mechanism was breaking apart.<\/p>\nA death spiral began spinning, Luna crashed to unseen lows, and hasn’t recovered ever since<\/strong>.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Terra collapse.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-07.jpg/" alt=\"What is Luna crypto: Terra collapse.\" width=\"1000\" height=\"534\"><\/p>\nThe “unsinkable<\/em>” crypto project crashed into an iceberg. Despite a recovery plan being announced and efforts put into restoring the TerraUSD peg to the dollar, things don’t really seem to get better<\/strong>. And it got more and more clear that the Luna coin, together with the TerraUSD stablecoin, were banished into the crypto crypt, where they were about to join the other failed coins.<\/p>\nIn just around 3 days, over $40 billion of value just evaporated. Thousands of investors lost their savings. This was a crisis, and people were angry.<\/p>\n<h2>Do Kwon’s Escape<\/h2>\nThe severity of the situation meant that Do Kwon was in trouble<\/strong>. Many people lost a lot of money. And the man behind the Terra Luna project was the one responsible for all of that.<\/p>\nAt first, the police were sent to guard Do Kwon’s family in South Korea. Law enforcement officers expected Do Kwon to be cooperative and good-willed, since the whole Terra Luna collapse seemed more like a disaster, and not like a malicious master plan executed recklessly.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Luna crypto: Do Kwon fled.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-luna-crypto-08.jpg/" alt=\"What is Luna crypto: Do Kwon fled.\" width=\"1000\" height=\"571\"><\/p>\nBut they were in for a surprise. The police in Singapore, the country where Terraform Labs was registered, eventually realized that Do Kwon had fled<\/strong>. He immediately tweeted that he was “not on the run<\/em>.”<\/p>\nBut Korean prosecutors stated the obvious – he’s most definitely on the run. And to catch him, the country had asked for global police assistance. This resulted in Do Kwon receiving a “red notice” from Interpol<\/strong>, which meant that, from now on, law enforcement agencies worldwide will go after him.<\/p>\nAnd, eventually, the news broke out that Do Kwon was arrested in Montenegro<\/strong>.<\/p>\n<h2>Terra Now<\/h2>\nFor what concerns the TerraUSD and Luna coins, a recovery plan was proposed<\/strong>. However, it didn’t really quite do what it was supposed to do. These two (now notorious) coins were rebranded into <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//terrausd-wormhole-ustc-price/">TerraClassicUSD and <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//terra-classic-lunc-price/">Terra Classic<\/strong><\/a>, respectively, so that people could easily differentiate between the “old<\/em>” failed project and the \"new<\/em>\" promising one.<\/p>\nAnd this “new<\/em>” project was called <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//terra-luna-luna-price/">Terra 2.0 (Luna)<\/strong><\/a>. It’s a new token, and it’s native to a new chain<\/strong>. The rules of its distribution were changed, and efforts were made to make it look like the “attack<\/em>” that took down the entire Terra Luna ecosystem resulted in unfair losses that must be compensated. Therefore, the new token was being airdropped to previous UST holders and believers in Terra Luna.<\/p>\nHowever, despite these efforts at reviving a failed ecosystem, the future of Terra 2.0 (Luna) does not look very bright<\/strong>. Well, in case of a recovery, that would be the comeback of the century.<\/p>\n<h2>Wrapping Up<\/h2>\nThis brings us to the end of the section. I hope that, by now, the questions like “What is Luna crypto?<\/em>”, “What is Terra Luna coin?<\/em>”, or “What network is Terra Luna on?<\/em>” will no longer bother you. And, in addition, you’ll know all about one of the most groundbreaking crypto collapse cases<\/strong> that has taken place. It’s a lesson for everyone, after all.<\/p>","youtube_video":{"id":95,"channel_id":1,"sort":20,"video_title":"What is Terra Luna? History & Crash Explained (ANIMATED)","description":"What is Luna crypto? What network is Terra Luna on? What's the history behind Terra?\n\nSooner or later, every person who decides to enter the crypto space, will have to face these questions. Terra (LUNA) is a household name when it comes to crypto. But\u2026 For sad reasons.\n\nIn this video, I\u2019ll cover the short, yet intense history of Terra (LUNA), I\u2019ll explain the concepts of TerraUSD (UST) stablecoin, Luna coin, and how did Terra Labs, the company behind the Terra (LUNA) project, managed to grow so big, and so fast. In addition to this, I\u2019ll cover what role did Do Kwon, the co-founder and the main figurehead of this venture, play in the rise & fall of Terra (LUNA).\n\nDid you hold any TerraUSD or Luna coins? Have you experienced any losses when Terra (LUNA) came crashing down? Do you think this coin has any chances of recovery? Let us know in the comment section!\n\nVideo Time Table:\n\n0:00 Introduction to What is Terra Luna\n1:09 The Beginning of Terra\n3:14 Algorithmic Stablecoin\n5:20 Anchor Protocol\n6:30 Do Kwon's Antics\n8:52 Do Kwon's Escape\n9:48 Terra Now\n10:40 Wrap-up: What is Terra Luna?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained \n\n#TerraLuna #LunaClassic #DoKwon","video_id":"lAQdQzF4KYM","duration":673,"view_count":261,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-terra-luna-history-crash-explained-animated.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-07-11T14:49:39.000000Z","created_at":"2023-07-11T23:00:09.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}}" :model="{"id":612,"chapter_id":2,"order":14,"featured_image_id":3501,"youtube_video_id":98,"author_id":4,"created_at":"2023-07-24T05:49:53.000000Z","updated_at":"2023-12-27T21:31:36.000000Z","slug":"what-is-fantom-crypto","title":"Is Fantom (FTM) Yet Another Ethereum Killer?","content":"In this section, I’m going to answer the question of “What is Fantom crypto?<\/strong>” and tell you about the Fantom ecosystem projects!<\/p>\nSo, what is Fantom (FTM), and why should you pay attention? Whether you're a crypto enthusiast or new to the space, Fantom's name is something that you better be aware of. Cause it’s like a real phantom. If you’re oblivious about its existence, you won’t see how much you could be missing out!<\/p>\nYet, Fantom is more than just a cryptocurrency<\/strong>. It encompasses an entire DeFi ecosystem, and introduces unique ways of solving universal blockchain problems. Learning about Fantom (FTM) can be beneficial for those interested in exploring the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-blockchain/">innovative blockchain technology<\/strong><\/a> and its potential applications. By understanding Fantom's unique approach to scalability and its focus on high-speed transaction processing<\/strong>, you’ll get a new perspective on what is what when it comes to blockchains!<\/p>\nIn this section, we’re going to answer the questions from “What is Fantom crypto?” to “What is FTM crypto?” and then, having established clear definitions of these key concepts, we’ll take a look at Fantom ecosystem projects<\/strong> and how important they are.<\/p>\nNow, let’s get straight to the point!<\/em><\/p>\n<h2>What is Fantom in Crypto?<\/h2>\nSo, let’s begin by answering the question, “What is Fantom crypto?”. First and foremost, Fantom is a blockchain network<\/strong>. It was developed by a team led by Dr. Ahn Byung Ik<\/strong>, a computer scientist and entrepreneur. The project began in 2018 under the guidance of Fantom Foundation<\/strong>, a non-profit organization headquartered in South Korea.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Fantom crypto: Fantom Foundation.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-fantom-crypto-01.jpg/" alt=\"What is Fantom crypto: Fantom Foundation.\" width=\"1000\" height=\"558\"><\/p>\nAs always, a new, promising project is launched only when the team behind it feels like they can offer something that other, current market players cannot. So, the motivation behind creating Fantom was to overcome the limitations of existing blockchain platforms<\/strong>.<\/p>\nThe team sought to build a secure and scalable infrastructure capable of handling high-speed transactions and supporting large-scale decentralized applications<\/strong> across various industries. Well, this sounds like something that literally every blockchain out there claims to have as its goal. But here’s what makes Fantom different.<\/p>\nTo achieve this, Fantom incorporated an innovative technology known as Lachesis<\/strong> and made it the network’s consensus mechanism. Without going into details, a consensus mechanism is an engine that implements a set of rules that power the blockchain and ensure its smooth functioning.<\/p>\nThe Lachesis technology enables rapid transaction processing and scalability<\/strong>, as its output can be used immediately. There is no need to wait for block confirmations, because transactions are confirmed in 1-2 seconds.<\/p>\nThink of it as WhatsApp. It made communication between people way faster than it was before the existence of this app. So, Lachesis does the same thing, but to on-chain transactions.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Fantom crypto: the Lachesis mechanism.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-fantom-crypto-02.jpg/" alt=\"What is Fantom crypto: the Lachesis mechanism.\" width=\"1000\" height=\"504\"><\/p>\nAdditionally, the platform implemented something called the Byzantine Fault-Tolerant (BFT)<\/strong> mechanism. Now that’s something to be aware of when it comes to understanding blockchain networks consisting of many participants.<\/p>\nByzantine Fault-Tolerant is a term used to describe a system's ability to function correctly and reach a consensus even when some components of the system are faulty or behave maliciously<\/strong>.<\/p>\nFor example, imagine a group of friends trying to decide on where they will all go out for lunch. They need to agree on the final choice, but there's a catch: some friends may intentionally give ironic answers or joke about going to such places as Krusty Burger. Despite such disruptions, a final consensus will have to be reached.<\/p>\nByzantine Fault-Tolerance is like having a trustworthy friend in the group who can identify, cut through the irony and nonsense, and, as a result, filter out the misleading information and ensure everyone reaches a reliable decision<\/strong>. This friend's role is to ensure that even if a few friends are trying to disrupt the decision-making process, the group can still come to a consensus that everyone can trust.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Fantom crypto: Byzantine Fault-Tolerant (BFT).\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-fantom-crypto-03.jpg/" alt=\"What is Fantom crypto: Byzantine Fault-Tolerant (BFT).\" width=\"1000\" height=\"505\"><\/p>\nWhen it comes to serious matters like transaction verification and new <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-block/">block creation, such obstacles must be overcome, and the Byzantine Fault-Tolerance mechanism is a tool to achieve this, thus increasing the blockchain’s speed and operational efficiency.<\/p>\nThere’s something else about Fantom that has to be addressed, though. The fact that the team behind it ensured the blockchain’s compatibility with <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-ethereum/">Ethereum, allowing seamless integration with Ethereum-based applications. Keeping in mind how buzzing the Ethereum ecosystem is, such a feature is like creating a visa-free border system between two neighboring countries.<\/p>\nFantom quickly gained attention and support<\/strong> from the cryptocurrency community and industry partners. Therefore, it’s no surprise that the list of its strategic partnerships has many notable, prominent, and industry-established names on it. This makes sense, since, from its very inception, the Fantom team has been actively developing the platform, expanding its ecosystem, and driving adoption.<\/p>\nAll of this sounds like a serious deal. And, the more people saw this, the more attention the Fantom project received. As it’s usually the case, positive attention was reflected in <a href=https://www.bitdegree.org/"//crypto//buy-fantom-ftm/">FTM’s, its native cryptocurrency’s, value increasing. FTM plays a crucial role in powering the Fantom network and incentivizing participants<\/strong>.<\/p>\nLet’s look into it in more detail.<\/em><\/p>\n<h2>What is FTM in Crypto?<\/h2>\nEven though FTM sounds like just an abbreviation for Fantom, it would be a mistake to think that it’s the same thing. FTM is a cryptocurrency<\/strong>, and, as said earlier, it’s native to the Fantom blockchain network.<\/p>\nFTM is a utility token, which means that it’s used for payments, network fees, staking, and governance<\/strong>. Thus, it plays a central role in transactions, fee collection, staking activities, and user rewards.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Fantom crypto: tokenomics.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-fantom-crypto-05.jpg/" alt=\"What is Fantom crypto: tokenomics.\" width=\"1000\" height=\"503\"><\/p>\nWhen it comes down to tokenomics, the total supply of FTM is 3.175 billion tokens<\/strong>. By the end of 2023, all of these tokens will be released into circulation.<\/p>\nThe gradual release of tokens was carefully thought through during the design process, and, as a result, a significant portion of the entire supply was reserved for staking rewards<\/strong> for those users who have chosen to stake their FTM holdings. <\/p>\nThink of it as all the interest that you’d receive if you put aside your savings into a savings account at a retail bank. The bank system is structured to reward depositors for keeping their money within the said institution. When it comes to staking and crypto tech, these staking reward reserves have to be meticulously calculated and locked, so they could be released when the time to issue staking rewards comes. <\/p>\nBy the way, if you feel like your knowledge about staking could be refreshed, don’t hesitate and check out <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-staking-in-crypto/">this section<\/strong><\/a>!<\/em><\/p>\n<h2>Fantom Ecosystem Projects<\/h2>\nMoving on with this “What is Fantom crypto?” section, it’s time to address yet another reason behind this blockchain’s popularity and importance – Fantom ecosystem projects<\/strong>. And there are plenty of those. But what’s the reason for that? The answer is… <\/em>Opera.<\/p>\nFantom Opera<\/strong> is the main deployment platform of the Fantom (FTM) blockchain. It is a decentralized and permissionless application development layer that supports the operation of decentralized applications (dApps) on the Fantom network<\/strong>. Opera is designed to provide a seamless environment for developers to create and deploy <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-smart-contracts/">smart contracts<\/strong><\/a> using Fantom's unique features.<\/p>\nTo put it simply, the Fantom network is like a city, and Fantom Opera is like its downtown<\/strong>, full of hip offices, workshops, and opportunities. Smart and productive people get there to make their ideas come to life. When it comes to blockchain, these ideas are dApps, and thanks to Opera, creators and developers get the necessary tools and environments to work on them.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Fantom crypto: Fantom OPERA.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-fantom-crypto-06.jpg/" alt=\"What is Fantom crypto: Fantom OPERA.\" width=\"1000\" height=\"540\"><\/p>\nOne of the key aspects of Fantom Opera is its compatibility with the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-ethereum-virtual-machine-evm/">Ethereum Virtual Machine (EVM)<\/a> and support for the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-solidity/">Solidity programming language<\/strong>. Such a feature allows developers to leverage their existing knowledge and experience with Ethereum to build and deploy dApps on the Fantom network. So, Fantom enables developers to easily port their Ethereum-based projects to the Fantom ecosystem.<\/p>\nThink of this as the Brooklyn Bridge. Manhattan locals can easily reach Brooklynittes, and vice versa. This enables fast and effective exchange of information, ideas, experience, and everything in between. So this connection between Fantom and Ethereum does exactly that, just in blockchain terms.<\/p>\nTherefore, the list of Fantom ecosystem projects has such names as <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//top-crypto-exchanges//sushiswap-fantom/">Sushiswap, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//beefy-finance-bifi-price/">Beefy, and similar ones, including over 250 NFT projects<\/strong>. For an ecosystem that’s relatively young, these are fascinating numbers.<\/p>\nOf course, it’s easy to talk about dApps when you understand them. But if you don’t, no worries, I’ve covered them in a separate section - <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-dapps-in-crypto/">check it out<\/a><\/strong>!<\/em><\/p>\n<h2>Wrapping Up<\/h2>\nThat's it, now you know “What is Fantom crypto?”, “What is FTM crypto?”, and all about the landscape of Fantom ecosystem projects.<\/p>\nOverall, it can be concluded that Fantom was created to address the scalability and security challenges faced by existing competitor blockchains, and to provide an effective, robust infrastructure for dApps<\/strong>. In order to achieve this, the Fantom team created <a href=https://www.bitdegree.org/"//crypto//buy-fantom-ftm/">FTM, Fantom’s native utility token, and found novelty solutions for making the whole structure more solid, efficient, and scalable.<\/p>","definition":"Did you know that the Fantom network uses the innovative Lachesis technology as its consensus mechanism?","status":"published","meta_title":"What is Fantom in Crypto: Fantom Ecosystem Projects and More","meta_description":"Want to figure out what is Fantom in crypto? You'll be able to learn all about FTM, Fantom ecosystem projects, and much more right here.","meta_keywords":"what is fantom crypto, what is ftm crypto, fantom ecosystem projects","modified_content":"In this section, I’m going to answer the question of “What is Fantom crypto?<\/strong>” and tell you about the Fantom ecosystem projects!<\/p>\nSo, what is Fantom (FTM), and why should you pay attention? Whether you're a crypto enthusiast or new to the space, Fantom's name is something that you better be aware of. Cause it’s like a real phantom. If you’re oblivious about its existence, you won’t see how much you could be missing out!<\/p>\nYet, Fantom is more than just a cryptocurrency<\/strong>. It encompasses an entire DeFi ecosystem, and introduces unique ways of solving universal blockchain problems. Learning about Fantom (FTM) can be beneficial for those interested in exploring the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-blockchain/">innovative blockchain technology<\/strong><\/a> and its potential applications. By understanding Fantom's unique approach to scalability and its focus on high-speed transaction processing<\/strong>, you’ll get a new perspective on what is what when it comes to blockchains!<\/p>\nIn this section, we’re going to answer the questions from “What is Fantom crypto?” to “What is FTM crypto?” and then, having established clear definitions of these key concepts, we’ll take a look at Fantom ecosystem projects<\/strong> and how important they are.<\/p>\nNow, let’s get straight to the point!<\/em><\/p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 suggested-comparisons pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//images//compare-crypto-exchanges.gif/"/n alt=\"What is Fantom? | Animated FTM Explainer\"\n title=\"What is Fantom? | Animated FTM Explainer\" class=\"border-0\">\n Video Explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Is Fantom (FTM) Yet Another Ethereum Killer?<\/h4>\n Reading is not your thing? Watch the \"Is Fantom (FTM) Yet Another Ethereum Killer?\" video explainer<\/p>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"position-relative youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"YaLTjQ0EHEU\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"><\/div>\n What is Fantom? | Animated FTM Explainer<\/p>\n <img data-srcset=\"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-fantom-animated-ftm-explainer.jpg?tr=w-420 500w,\n https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-fantom-animated-ftm-explainer.jpg?tr=w-760 1000w\"\n alt=\"What is Fantom? | Animated FTM Explainer\"\n title=\"What is Fantom? | Animated FTM Explainer\"\n class=\"p-0 lazyload\">\n <img class=\"play-button lazyload\" data-target=\"#video-modal\"\n data-src=\"https:\/\/assets.bitdegree.org\/crypto\/assets\/video-button.png?tr=w-85\"\n alt=\"What is Fantom? | Animated FTM Explainer\">\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener noindex\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <\/i>\n <\/div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE<\/h4>\n ON YOUTUBE<\/span>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <\/i>\n <\/button>\n <div id=\"iframe\"><\/div>\n <\/div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https:////www.youtube.com//c//CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener noindex\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//crypto//assets//crypto-subscribe.jpg/" alt=\"Subscribe\">\n <\/div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n SUBSCRIBE \n ON YOUTUBE<\/span>\n <\/p>\n <\/div>\n <\/div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease<\/h4>\n New explainer videos every week!<\/span>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n<\/div>\n<h2>What is Fantom in Crypto?<\/h2>\nSo, let’s begin by answering the question, “What is Fantom crypto?”. First and foremost, Fantom is a blockchain network<\/strong>. It was developed by a team led by Dr. Ahn Byung Ik<\/strong>, a computer scientist and entrepreneur. The project began in 2018 under the guidance of Fantom Foundation<\/strong>, a non-profit organization headquartered in South Korea.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Fantom crypto: Fantom Foundation.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-fantom-crypto-01.jpg/" alt=\"What is Fantom crypto: Fantom Foundation.\" width=\"1000\" height=\"558\"><\/p>\nAs always, a new, promising project is launched only when the team behind it feels like they can offer something that other, current market players cannot. So, the motivation behind creating Fantom was to overcome the limitations of existing blockchain platforms<\/strong>.<\/p>\nThe team sought to build a secure and scalable infrastructure capable of handling high-speed transactions and supporting large-scale decentralized applications<\/strong> across various industries. Well, this sounds like something that literally every blockchain out there claims to have as its goal. But here’s what makes Fantom different.<\/p>\nTo achieve this, Fantom incorporated an innovative technology known as Lachesis<\/strong> and made it the network’s consensus mechanism. Without going into details, a consensus mechanism is an engine that implements a set of rules that power the blockchain and ensure its smooth functioning.<\/p>\nThe Lachesis technology enables rapid transaction processing and scalability<\/strong>, as its output can be used immediately. There is no need to wait for block confirmations, because transactions are confirmed in 1-2 seconds.<\/p>\nThink of it as WhatsApp. It made communication between people way faster than it was before the existence of this app. So, Lachesis does the same thing, but to on-chain transactions.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Fantom crypto: the Lachesis mechanism.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-fantom-crypto-02.jpg/" alt=\"What is Fantom crypto: the Lachesis mechanism.\" width=\"1000\" height=\"504\"><\/p>\nAdditionally, the platform implemented something called the Byzantine Fault-Tolerant (BFT)<\/strong> mechanism. Now that’s something to be aware of when it comes to understanding blockchain networks consisting of many participants.<\/p>\nByzantine Fault-Tolerant is a term used to describe a system's ability to function correctly and reach a consensus even when some components of the system are faulty or behave maliciously<\/strong>.<\/p>\nFor example, imagine a group of friends trying to decide on where they will all go out for lunch. They need to agree on the final choice, but there's a catch: some friends may intentionally give ironic answers or joke about going to such places as Krusty Burger. Despite such disruptions, a final consensus will have to be reached.<\/p>\nByzantine Fault-Tolerance is like having a trustworthy friend in the group who can identify, cut through the irony and nonsense, and, as a result, filter out the misleading information and ensure everyone reaches a reliable decision<\/strong>. This friend's role is to ensure that even if a few friends are trying to disrupt the decision-making process, the group can still come to a consensus that everyone can trust.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Fantom crypto: Byzantine Fault-Tolerant (BFT).\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-fantom-crypto-03.jpg/" alt=\"What is Fantom crypto: Byzantine Fault-Tolerant (BFT).\" width=\"1000\" height=\"505\"><\/p>\nWhen it comes to serious matters like transaction verification and new <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-block/">block creation, such obstacles must be overcome, and the Byzantine Fault-Tolerance mechanism is a tool to achieve this, thus increasing the blockchain’s speed and operational efficiency.<\/p>\nThere’s something else about Fantom that has to be addressed, though. The fact that the team behind it ensured the blockchain’s compatibility with <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-ethereum/">Ethereum, allowing seamless integration with Ethereum-based applications. Keeping in mind how buzzing the Ethereum ecosystem is, such a feature is like creating a visa-free border system between two neighboring countries.<\/p>\nFantom quickly gained attention and support<\/strong> from the cryptocurrency community and industry partners. Therefore, it’s no surprise that the list of its strategic partnerships has many notable, prominent, and industry-established names on it. This makes sense, since, from its very inception, the Fantom team has been actively developing the platform, expanding its ecosystem, and driving adoption.<\/p>\nAll of this sounds like a serious deal. And, the more people saw this, the more attention the Fantom project received. As it’s usually the case, positive attention was reflected in <a href=https://www.bitdegree.org/"//crypto//buy-fantom-ftm/">FTM’s, its native cryptocurrency’s, value increasing. FTM plays a crucial role in powering the Fantom network and incentivizing participants<\/strong>.<\/p>\nLet’s look into it in more detail.<\/em><\/p>\n<h2>What is FTM in Crypto?<\/h2>\nEven though FTM sounds like just an abbreviation for Fantom, it would be a mistake to think that it’s the same thing. FTM is a cryptocurrency<\/strong>, and, as said earlier, it’s native to the Fantom blockchain network.<\/p>\nFTM is a utility token, which means that it’s used for payments, network fees, staking, and governance<\/strong>. Thus, it plays a central role in transactions, fee collection, staking activities, and user rewards.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Fantom crypto: tokenomics.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-fantom-crypto-05.jpg/" alt=\"What is Fantom crypto: tokenomics.\" width=\"1000\" height=\"503\"><\/p>\nWhen it comes down to tokenomics, the total supply of FTM is 3.175 billion tokens<\/strong>. By the end of 2023, all of these tokens will be released into circulation.<\/p>\nThe gradual release of tokens was carefully thought through during the design process, and, as a result, a significant portion of the entire supply was reserved for staking rewards<\/strong> for those users who have chosen to stake their FTM holdings. <\/p>\nThink of it as all the interest that you’d receive if you put aside your savings into a savings account at a retail bank. The bank system is structured to reward depositors for keeping their money within the said institution. When it comes to staking and crypto tech, these staking reward reserves have to be meticulously calculated and locked, so they could be released when the time to issue staking rewards comes. <\/p>\nBy the way, if you feel like your knowledge about staking could be refreshed, don’t hesitate and check out <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-is-staking-in-crypto/">this section<\/strong><\/a>!<\/em><\/p>\n<h2>Fantom Ecosystem Projects<\/h2>\nMoving on with this “What is Fantom crypto?” section, it’s time to address yet another reason behind this blockchain’s popularity and importance – Fantom ecosystem projects<\/strong>. And there are plenty of those. But what’s the reason for that? The answer is… <\/em>Opera.<\/p>\nFantom Opera<\/strong> is the main deployment platform of the Fantom (FTM) blockchain. It is a decentralized and permissionless application development layer that supports the operation of decentralized applications (dApps) on the Fantom network<\/strong>. Opera is designed to provide a seamless environment for developers to create and deploy <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-smart-contracts/">smart contracts<\/strong><\/a> using Fantom's unique features.<\/p>\nTo put it simply, the Fantom network is like a city, and Fantom Opera is like its downtown<\/strong>, full of hip offices, workshops, and opportunities. Smart and productive people get there to make their ideas come to life. When it comes to blockchain, these ideas are dApps, and thanks to Opera, creators and developers get the necessary tools and environments to work on them.<\/p>\n<img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Fantom crypto: Fantom OPERA.\" src=https://www.bitdegree.org/"https:////assets.bitdegree.org//images//what-is-fantom-crypto-06.jpg/" alt=\"What is Fantom crypto: Fantom OPERA.\" width=\"1000\" height=\"540\"><\/p>\nOne of the key aspects of Fantom Opera is its compatibility with the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-ethereum-virtual-machine-evm/">Ethereum Virtual Machine (EVM)<\/a> and support for the <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-solidity/">Solidity programming language<\/strong>. Such a feature allows developers to leverage their existing knowledge and experience with Ethereum to build and deploy dApps on the Fantom network. So, Fantom enables developers to easily port their Ethereum-based projects to the Fantom ecosystem.<\/p>\nThink of this as the Brooklyn Bridge. Manhattan locals can easily reach Brooklynittes, and vice versa. This enables fast and effective exchange of information, ideas, experience, and everything in between. So this connection between Fantom and Ethereum does exactly that, just in blockchain terms.<\/p>\nTherefore, the list of Fantom ecosystem projects has such names as <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//top-crypto-exchanges//sushiswap-fantom/">Sushiswap, <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//cryptocurrency-prices//beefy-finance-bifi-price/">Beefy, and similar ones, including over 250 NFT projects<\/strong>. For an ecosystem that’s relatively young, these are fascinating numbers.<\/p>\nOf course, it’s easy to talk about dApps when you understand them. But if you don’t, no worries, I’ve covered them in a separate section - <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//what-are-dapps-in-crypto/">check it out<\/a><\/strong>!<\/em><\/p>\n<h2>Wrapping Up<\/h2>\nThat's it, now you know “What is Fantom crypto?”, “What is FTM crypto?”, and all about the landscape of Fantom ecosystem projects.<\/p>\nOverall, it can be concluded that Fantom was created to address the scalability and security challenges faced by existing competitor blockchains, and to provide an effective, robust infrastructure for dApps<\/strong>. In order to achieve this, the Fantom team created <a href=https://www.bitdegree.org/"//crypto//buy-fantom-ftm/">FTM, Fantom’s native utility token, and found novelty solutions for making the whole structure more solid, efficient, and scalable.<\/p>","youtube_video":{"id":98,"channel_id":1,"sort":18,"video_title":"What is Fantom? | Animated FTM Explainer","description":"What is Fantom in crypto? What is FTM crypto? What are the most important Fantom ecosystem projects?\n\nLearning about Fantom can be very beneficial. It\u2019s the only way to find out, learn, and understand what unique solutions and ideas this blockchain network has brought to the crypto table!\n\nIn this video, I\u2019ll cover the differences between Fantom, the blockchain network, and FTM, this network\u2019s native currency. After making it clear, I\u2019ll get into details about what made this new blockchain project stand out from the crowd, and why it attracted so much attention, from investors and users, alike.\n\nDo you have any experience with Fantom (FTM)? Have you ever interacted with the blockchain, or maybe you hold some FTM? What are your thoughts on this project and the ecosystem that it hosts? Let us know in the comments!\n\nVideo Time Table:\n\n0:00 Introduction to What is Fantom?\n1:14 What is Fantom in Crypto?\n4:41 What is FTM?\n5:54 Fantom Ecosystem Projects\n7:53 Wrap-up: What is Fantom in Crypto?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps:\/\/twitter.com\/crypto_xplained \n\n#Fantom #FantomFTM #FantomCrypto","video_id":"YaLTjQ0EHEU","duration":515,"view_count":370,"thumbnail_url":"https:\/\/assets.bitdegree.org\/youtube\/crypto-finally-explained\/what-is-fantom-animated-ftm-explainer.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2023-07-18T15:00:14.000000Z","created_at":"2023-07-18T23:00:08.000000Z","updated_at":"2024-01-09T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}},"featured_image":{"id":3501,"uuid":"287c02fa-b638-4765-b162-504f87e1c1d0","name":"what-is-fantom-crypto-featured-image.jpg","url":"https:\/\/assets.bitdegree.org\/images\/what-is-fantom-crypto-featured-image.jpg","path":"images\/what-is-fantom-crypto-featured-image.jpg","mime_type":"image\/jpeg","disk":"digitalOceanSpaces","size":99730,"width":1024,"height":576,"custom_properties":null,"created_at":"2023-07-21T12:47:14.000000Z","updated_at":"2023-07-21T12:47:14.000000Z"}}" :chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? The Pros & Cons","status":"published","modified_content":null},{"chapter_id":2,"order":4,"slug":"coin-vs-token","title":"Coin VS Token: How Do They Differ?","status":"published","modified_content":null},{"chapter_id":2,"order":5,"slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","status":"published","modified_content":null},{"chapter_id":2,"order":6,"slug":"what-is-a-bitcoin","title":"Bitcoin: the Pioneer of the Crypto World","status":"published","modified_content":null},{"chapter_id":2,"order":7,"slug":"what-is-ethereum","title":"The Ultimate Blockchain for dApp Creation: Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":8,"slug":"what-is-cardano-in-crypto","title":"What is Cardano and What is It Used For?","status":"published","modified_content":null},{"chapter_id":2,"order":9,"slug":"what-is-shiba-inu-coin","title":"Shiba Inu: the Dogecoin Killer","status":"published","modified_content":null},{"chapter_id":2,"order":10,"slug":"what-is-solana-in-crypto","title":"Is Solana an Improved Version of Ethereum?","status":"published","modified_content":null},{"chapter_id":2,"order":11,"slug":"what-is-polkadot-in-crypto","title":"The Bridge Between Blockchains: Polkadot","status":"published","modified_content":null},{"chapter_id":2,"order":12,"slug":"what-is-polygon-in-crypto","title":"Polygon: the Essential Scaling Solution for Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":13,"slug":"what-is-luna-crypto","title":"The Bumpy Road of Terra (LUNA)","status":"published","modified_content":null},{"chapter_id":2,"order":14,"slug":"what-is-fantom-crypto","title":"Is Fantom (FTM) Yet Another Ethereum Killer?","status":"published","modified_content":null},{"chapter_id":2,"order":15,"slug":"what-is-aave-crypto","title":"Aave: Crypto Lending 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Tokens?","status":"published","modified_content":null},{"chapter_id":8,"order":5,"slug":"how-to-research-crypto","title":"Crypto Research Fundamentals & Social Signals: Your Daily Trading Strategy","status":"published","modified_content":null},{"chapter_id":8,"order":46,"slug":"portfolio-diversification-definition","title":"Portfolio Diversification: The Whats, the Whys, and the Hows","status":"published","modified_content":null}]},{"id":9,"title":"Mining","slug":"mining","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-mining.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-mining-101.jpg","rating":80,"sections":[{"chapter_id":9,"order":1,"slug":"what-is-crypto-mining","title":"Crypto Mining: What It is and How Does It Work?","status":"published","modified_content":null},{"chapter_id":9,"order":2,"slug":"what-is-a-mining-pool","title":"Mining Pools: Is Collective Mining Better Than Solo Mining?","status":"published","modified_content":null},{"chapter_id":9,"order":3,"slug":"what-is-staking-crypto","title":"An Advanced Look into What is Staking Crypto","status":"published","modified_content":null},{"chapter_id":9,"order":4,"slug":"what-is-proof-of-stake-vs-proof-of-work","title":"Proof-of-Work VS Proof-of-Stake: The Differences That Matter","status":"published","modified_content":null},{"chapter_id":9,"order":5,"slug":"what-is-crypto-mining-rig","title":"Crypto Mining Rig: What It is and How to Build One?","status":"published","modified_content":null}]},{"id":10,"title":"Crypto Terms","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/crypto-101-glossary.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-glossary-101.jpg","rating":100,"sections":["A","B","C","D","E","F","G","H","I","J","K","L","M","N","O","P","Q","R","S","T","U","V","W","X","Y","Z"]}]" current-chapter="cryptocurrencies" current-section="what-is-fantom-crypto">

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