Web3 — interoperability, scalability, NFTs, DeFi, Gaming
Fantom Foundation and Umbria Network AMA
Michael Kong, CEO of Fantom Foundation, joined Barney and Oscar Chambers, co-founders and co-lead developers of Umbria Network (which has the fastest and cheapest bridge to the Fantom chain), for an AMA on Friday, 11th November, 2022.
Project introductions — resolving blockchain scalability and interoperability issues
Fantom introduction
Time stamp: 0:00
Layer 1 and Layer 2 scaling solutions are addressing the issues of slow and expensive blockchain transactions to improve user experience and pave the way for more interesting and robust applications on top of Ethereum.
One of the major bottlenecks with scaling solutions is that it can be difficult to get your assets to those networks. That’s where bridging and Umbria comes in. We have the cheapest and fastest cross-chain bridge between Ethereum and Fantom and other EVM-compatible networks. We’ve looked at scaling solutions and asked how can we de-fractionalize all of the liquidity across them, make them more interoperable with each other and really unify the crypto space so that we have all the advantages of these other networks that are improvements on top of Ethereum. — Oscar Chambers
What differentiates Fantom from other blockchains? Why do users choose it?
Time stamp: 3:20
Key takeaways:
- Fantom doesn’t compromise on security
- Fantom has created an asynchronous technology, which can confirm multiple transactions simultaneously through a complex consensus method
- Achieves scalability without trading away decentralisation or security
- Good foundation for an even more scalable network in the future
Fantom scalability
Fantom can handle approximately 1.5 to two million daily transactions.
As soon as you’ve got one block confirmation, it’s final. You don’t need to wait for four or five blocks after your block has been mined to make sure that your transaction is confirmed; you just need one block confirmation. A lot of people like to talk about network throughput or transactions per second but in my opinion what’s more important is actually the time to finality because that’s the actual user experience. — Michael Kong
Key takeaways:
- At the beginning, Fantom chose to be EVM/Solidity-compatible as opposed to creating own virtual machine and programming language because:
- Technology already existed and was easy to simply plug into
- It’s a standard for developers — wanted to make it as easy to develop on Fantom as it is on Ethereum
I think most people don’t just use a single chain. Most people use probably two or three or maybe even four or five chains, right? And the way that they move assets between them is via bridges — Michael Kong
Key takeaways:
- Umbria Network’s Narni bridge is fastest and cheapest for cross-chain transactions between Ethereum and EVM-compatible chains such as Fantom
- DeFi liquidity and staking platform
EVM-compatibility, solidity and other programming languages, smart contracts and coding discussion
Time stamp: 10:00
Developing solutions, substrate blockchain framework
Time stamp: 23:23
Research is important, but we [Fantom] don’t just want to produce papers and come up with concepts and never really implement them. Ultimately we have to design practical solutions. The aim of both of our teams - the singular goal — is to increase the performance of the network as much as possible. Fantom’s moonshot goal is to be able to process 100 million transactions on a daily basis. — Michael Kong
Technology, business development and use cases: DeFi, NFTs, gaming and beyond
Time stamp: 26:03
Key takeaways:
- Primary reason people use Fantom has been for DeFi, but currently pivoting towards NFTs and gaming
- Problems in DeFi at the moment:
- TVL has gone down significantly on all chains as yields have decreased - Regulatory issues have impacted on DeFi development - DeFi will pick up again as market conditions improve and if we get regulatory clarity
- Two big areas people are using blockchain technology in general for at the moment are NFTs and gaming
- Future uses cases: P2P insurance, supply chain management, data verification
We want to grow and develop the Fantom ecosystem as much as possible and help the community grow so we need to focus on the areas that the community are interested in. DeFi and NFTs are the use cases at the moment but I think in the future there are going to be other use cases as well. There are going to be more P2P insurance plays, supply chain management plays and more data verification plays. — Michael Kong
When we launched Umbria, we thought that the major focus for cross chain bridging was going to be in the DeFi space. We quickly learned that there was more interest brewing in the NFT side of things and people were bridging all over the place to be involved in things like NFT drops. They were less interested in moving their liquidity around for DeFi where they’d stick their money in a platform such as Compound and then just leave it for a while. — Oscar Chambers
Need for the right amount of regulation
Time stamp: 31:10
Key takeaways:
- DeFi still feels like Wild West territory; need for regulatory clarity
- As regulatory framework becomes more apparent, the space will open up to the general public as an investment option
- However, highly onerous regulation requiring a lot of compliance could make DeFi unviable
- The technology outpaces the regulation
- There is a need for a safe and friendly place for onboarding more users and increasing mainstream adoption
I think due to some of the recent centralised exchange failures like FTX, BlockFi and Celsius people are either going to be much more interested in DeFi as an alternative to those technologies or it could go the other way and regulators come in and say: ‘there’s been this catastrophe in the centralised exchange space, maybe we just need to regulate the entire cryptocurrency space as a whole much more heavily’. — Barney Chambers
Umbria as a DeFi system
Time stamp: 37:40
Umbria is also a DeFi platform where people can stake assets to facilitate the bridging of value between Ethereum and other networks. There are multiple liquidity pools (Ethereum, Fantom, Polygon, Avalanche, Binance chain, Arbitrum, Optimism…) in which people can stake ETH or stable coins and then whenever those assets are used for bridging within the system those liquidity providers earn a percentage of the fee that is generated from that transaction.
- Stake single asset (not a pair of assets)
- Whenever the staked asset is used to bridge between one network to another, the LP gets a slice of the fee
- Fees paid in asset provided (such as ETH, USDC, USDT)
- Stakers of UMBR get fees in ALL assets supported by the bridge
- No impermanent loss and fees accrue over time
- Can be unstaked at any time
Multi-chain future: different blockchains for different purposes
Time stamp: 41:03
Key takeaways:
- People are going to continue using multiple chains in the future, but could be some consolidation
- Horses for courses: users utilise a chain that’s more popular/prevalent for one application and move back to another chain for a different application
- We know the limitations of Ethereum
- New solutions such as Fantom tackle the next set of challenges; for example NFT gamification, which aren’t possible on Ethereum
- So much innovation happening on different blockchains
Umbria: The importance of platform security, the oracle and protection of users’ assets
Time stamp: 45:17
Key takeaways:
- Umbria has never taken users’ liquidity out of the system and lent it elsewhere
- Core infrastructure is audited externally
- Security first approach to all development; security specialists in-house
- Bridge’s oracle system isn’t front facing (doesn’t interface with users)
- Oracle system only interacts with data that has been confirmed on the respective blockchains that it’s talking to
Top Web3 trends for 2023
All agree that much will depend on what the regulation framework/landscape looks like.
Time stamp: 50:35
Barney & Oscar (Umbria):
- More verification (KYCs)
- Developments in the zero-knowledge proof space; self-driving cars and zero knowledge-proof messaging systems
Michael Kong (Fantom):
- Start developing DeFi applications again (regulation dependent)
- More development in NFTs/Metaverse/gaming — there’s a lot of value to be added
- Different trends emerging such as P2P insurance; strong use case for blockchain technology
Roadmaps for 2023
Time stamp: 53:55
Fantom
- Immediate technology goals: launch the Fantom Virtual Machine (FVM), get new read and write storage technology running on testnet (then look at deploying the technology on the mainnet)
- Looking at ideas around group-based voting to develop over the next few months and implement to increase the performance of consensus
- Business development: looking to hire new biz dev people to get bigger partnerships
Umbria
- Multi-bridge system: new oracle system that will facilitate the bridging from any of its supported blockchains to any other of its supported blockchains
- Will be able to bridge from Binance Chain to Fantom or Avalanche to Polygon etc
- Will consolidate all of Umbria’s liquidity pools and potentially facilitate greater yields for customers
- Reduce the cost of bridging further with new multi-bridge system
To hear the whole AMA, please click here.
