Fantom Foundation Lowers Staking Threshold to 50,000 FTM

The Fantom Foundation, overseeing the layer-1 blockchain network Fantom, has implemented a significant reduction in its validator staking requirement. This change, confirmed by the foundation in a January 15 post and following a governance vote concluded in June 2023, marks a strategic shift in Fantom's approach to network security and decentralization.

Previously set at 500,000 FTM tokens, the staking threshold for validators on the Fantom network has been dramatically reduced by 90% to 50,000 FTM, equivalent to approximately $19,500 at current market rates. This move aims to enhance network security by increasing the number of validators, thereby making it more challenging for malicious actors to compromise the network.

The rationale behind this decision is grounded in the principle that a higher number of validators strengthens a decentralized network's resilience against attacks. Validators on the Fantom network play a crucial role by bundling transactions and sharing them with other validators, with finality achieved once a consensus is reached by at least two-thirds of them. The foundation asserts that this increase in validators will expedite transaction validation without compromising network speed or security, maintaining the network's 1-2 second time to finality.

In addition to enhancing security, this reduction in the staking requirement democratizes access to validator status, allowing more participants to contribute to the network's operation. Despite this change, the foundation reassures that the network's performance will not be impacted negatively, as the security and efficiency of transaction validation remain proportional to the amount staked by validators, rather than the sheer number of validators. Therefore, a larger validator with a higher stake holds equivalent power to several smaller validators with lesser stakes.

This initiative by the Fantom Foundation is not the first of its kind. The discussion around lowering the minimum FTM requirement for running a node began as early as February 2022. As of the latest data, Fantom's network comprises 58 validators, a figure modest compared to larger networks like Ethereum, which boasts over 1.1 million validators.

Despite the positive implications for network security and decentralization, the recent changes have not significantly impacted FTM's market performance. As of this writing, FTM's price has seen a decline of 1.4% on the day, trading at $0.389. This decline is part of a broader trend, with FTM prices down 89% from their October 2021 peak.