Fantom, a high-performing Layer 1 blockchain, has recently become a hub for DeFi due to its scalability and cost-effective transaction processing. With an impressive increase of 163% in the average block size in 2022, Fantom is certainly making its mark in the blockchain sphere.

But what makes Fantom so captivating, and how does it deal with the prevalent web3 security issues? Let’s unravel these mysteries in this blog.

Addressing the Concerns of Current Blockchains

Despite their transformative potential, blockchains still face certain operational constraints, including:

Scalability Limitations: Traditional blockchains process and store a single block at a time, leading to delays in block creation, especially when transaction requests spike. Fantom, however, addresses this issue with its parallel processing capabilities.

Exorbitant Transaction Fees: High fees, including transaction confirmation fees, gas fees, and block rewards, often result in users paying more for validating the transaction than the actual transfer amount. Fantom’s transaction fees are incredibly low, costing less than $0.01, a stark contrast to Ethereum’s $1 average for basic transactions.

Limited Data History Access: Traditional blockchains can only process information within blocks, not from the external world, without the aid of applications like Oracle. This constraint hinders the real-time functionality of blockchains.

How Does Fantom Stand Out?

For blockchain to be perceived with broad applicability, Fantom believes in super-effective modelling. Fantom utilizes a unique technology called OPERA which solves scalability concerns through the rapid processing of blocks. But how does it work?

FANTOM OPERA

Fantom Opera uses Directed Acyclic Graph(DAG), which involves nodes and vertices. The nodes and vertices are connected to each other through multiple edges, which establishes the interconnection between blocks. 

Unlike traditional blockchains, the nodes don’t follow a linear pattern. They are unidirectional; they only flow in a certain direction. In DAG, multiple blocks containing transactions can be added concurrently and do not require following a sequential pattern like in Ethereum.

The appearance of the Fantom would resemble a cross-linked structure in the form of DAG. This pertains to accessing information safely and speedily across the blocks. The transaction time in Fantom takes no more than 2 seconds. 

The working of the Opera chain introduces Lachesis Consensus Algorithm.

The Lachesis Consensus Algorithm (LCA)

Opera works using Lachesis Consensus to show improved performance and security using DAG. Lachesis is a variant of ‘Proof of Stake’, an asynchronous Byzantine Fault Tolerant(aBFT) consensus mechanism.

An event block stores arbitrary data such as transactions, smart contracts, history and value of previous events. Validators approve event blocks, which are batches of incoming transactions and add them as vertices to DAG. The set of links between event blocks forms DAG.

Likewise, Lachesis form a ‘Lachesis DAG’. It intends to work even in case 1/3rd of nodes are malicious. LCA functions asynchronously, meaning when two transactions are initiated, it validates only the earliest, preventing double-spending attacks. LCA is capable of processing up to 300,000 transactions per second. 

This makes it evident that Fantom’s Lachesis DAG Consensus is improved in terms of speed, scalability and accessing the data history effectively. Let’s now get into the security part of Fantom.

Notorious Attacks On Fantom Blockchain

1. Fantasm Finance exploit: Fantasm Finance, an algorithmic trading platform on Fantom, was attacked, leading to hackers stealing over $2.6 million in tokens. 

Attack vector: The attacker exploited the error-checking code of the protocol’s mint function. As a result, the attacker minted XFTM tokens by depositing only a portion of the pledged collateral, gaining profits.

2. Deus Finance: Deus Finance, a decentralized application, fell for a hack leading to a subsequent $13.4 million loss. 

Attack vector: Reports reveal the attacker utilized flash loans to trick smart contracts into manipulating the prices of assets in the liquidity pools. By artificially inflating asset prices, the hacker derived $13.4M in assets. 

3. Grim Finance: Grim Finance, a DeFi project, was hacked. The attacker plundered over $30M in tokens.

Attack vector: The Grim Finance had a reentrancy error in its safeTransferFrom function. Reentrancy occurs when the contract doesn’t update the internal state properly before sending a transfer to an external contract. By exploiting the error, the hacker stole the money.

Safeguarding Fantom Protocol With Audits

In Fantom smart contract auditing, experts interrogate the contract code for their compliance with the standards and review code logic and functionalities. The audit scheme is structured to verify the development and security attributes of the Web3 protocol. For example, Gas optimization, Integer handling, Input validation, front running, Reentrancy attack, Denial of service(DoS) attack and so on.

Doing so improves the overall quality and prevents the code from producing undesirable outcomes. Fantom protocols that have passed through security audits gain credibility as a promising project. 

Fantom security audits are crucial for any applications built leveraging the power of Fantom blockchain, such as

• NFT&gaming projects 
• Cross-chain bridge contracts 
• DeFi and decentralized exchange platforms

QuillAudits has a brand reputation for securing over $16B in crypto assets through auditing and due diligence services. With the intent of diversifying our mission to safeguard web3 as far as possible, we have also included Fantom audits under our service offerings. 

FAQ

What are the advantages of Fantom blockchain?

Fantom is far more scalable and facilitates speedy transactions at lower costs. Fantom achieves this by using Opera technology combined with the Lachesis Consensus Algorithm.

What are Fantom audits?

Fantom security audits are crucial for any applications built leveraging the power of Fantom blockchains, such as NFT&gaming projects, Cross-chain bridge contracts, DeFi and decentralized exchange platforms.

How long it takes for Fantom smart contract audits?

The time period for audits depends on the complexity of the project and the scope of audits. It may vary from a few days to weeks. 

Which is the best smart contract auditing company?

QuillAudits has a brand reputation of securing over $16B in crypto assets through auditing and due diligence services. With the intent of diversifying our mission to safeguard web3 as far as possible, we have also included Fantom audits under our service offerings.