Ferrum network is a decentralized network like the Ethereum Network or IOTA but with a unique value proposition – instead of focusing on new coins, it can represent coins in other networks. For example, you can have Ether, Bitcoin, ERC-20 tokens, or coins from almost any other blockchain transacted in the Ferrum Network. This groundbreaking innovation allows for very interesting decentralized and interoperable applications, such as the Ferrum Decentralized Exchange (Fe DEX), and the Ferrum Wallet. Both of these decentralized applications allow users to exchange and transact nearly any digital asset in a fast and inexpensive manner, without requiring them to pass the custody of their assets to a third-party.
“Ferrum” is the element number 26 of the periodic table, more commonly known as “Iron”. Ferrum is a unique element due to its extremely stable core. In an active state, any core heavier than Ferrum breaks down to become Ferrum, and any core lighter than Ferrum will fuse to become Ferrum. We feel this is the perfect metaphor for Ferrum Network. We are the middle ground, the connecting element, to all other blockchains.
Ferrum tokens (FRM) are the Ferrum Network’s native tokens. All other tokens in the Ferrum network are a representation of other assets such as BTC, ETH, TUSD, etc. Similar to Ethereum gas, Ferrum tokens are spent to run the transactions on the network. Because Ferrum has no miners, spending FRM tokens is necessary to prevent a malicious attacker from spamming the network. FRM tokens are also used to reduce fees on the Fe DEX, to import/export value to and from the network, among other necessary functions. Whenever FRM tokens are spent, they are burned.
Ferrum’s functionality is similar to the most popular centralized exchanges such as Binance and Coinbase. Where it differs from other exchanges is in the fact that it is “decentralized”. This is a very important distinction – it means Ferrum will never hold custody of your assets at any time. On the other hand, when you use a centralized exchange such as Binance, you give them access all of your money (private key) and trust them to protect it. However, when you use Ferrum, you keep your private keys and Ferrum Exchange never holds any of your money.
In comparison with other decentralized exchanges (DEXs) such as IDEX, Ferrum is interoperable, meaning it is blockchain agnostic and effectively enables cross-chain transactions, but all within one network. In practical terms, this means Ferrum is not limited to ERC-20 tokens and users can exchange a wide range of digital currencies. In addition, it is much faster and cheaper than existing DEXs. This is because Ferrum Network is much faster than the Ethereum network, which is the foundation of most other decentralized exchanges. Furthermore, users do not need to pay gas fees for running transactions. In short, by using the Fe Wallet and/or Fe DEX, users can execute a nearly instant decentralized exchange of Bitcoin for Ethereum (and a wide range of other digital assets), with the same ease and speed as a centralized exchange, but at a fraction of the cost and without custodial risk.
To ensure Ferrum provides the best user experience, we are launching Ferrum with 4 dApps: The Ferrum Wallet, Ferrum Decentralized Exchange, Kudi Exchange, and the Ferrum Sub-Zero Wallet. Further information on these are readily available in our whitepaper.
When you send coins to Ferrum, from the Bitcoin network, for example, Ferrum creates a unique Bitcoin address for you called the “lock address”. No one in the world ever sees the private key for the lock address. Instead, the private key is created in distributed nodes within and around the Ferrum Network. When Bitcoin arrives to your locked address, the same amount of Bitcoin is generated in the Ferrum Network. You can then spend, exchange, and use the Bitcoin in the Ferrum network, enjoying its high speed and low fees. Holders of Bitcoins in the Ferrum Network can at any time destroy their proxy Bitcoins and get an identical amount of Bitcoins in the main Bitcoin network. A user only has to request that the network unlock the same amount of Bitcoins from the originally locked account, and present the proof of destroyed Ferrum Bitcoins. In practice, this happens with the click of a button in the Fe Wallet.
You can think of this process as taking your cash to the bank and receiving a traveller’s check that is identical in value. The bank has a locked safe in which they put your money, when you receive your traveller’s cheque. You can then spend the traveller’s check as if it is cash. Holders of such checks can go to the bank at anytime and exchange it for cash. The primary difference is that Ferrum does not hold users “cash” (i.e. Bitcoin), rather it is distributed across the network in a secure and decentralized manner.
DAG (Directed Acyclic Graph) is a very useful type of graph in graph theory and computer science. They are considered a “graph” because when reduced to an image, they look like a tree with a lot of intertwined branches. In comparison, blockchains are a chain – which is itself a subset of the DAG. In all blockchains, transactions naturally form a DAG, and it is the role of miners to work very hard to “prune” that intertwined tree down to a single chain (hence the name blockchain). Some decentralized networks (most notably IOTA) have developed consensus mechanisms that can directly work with DAGs. These network have accepted the fact that transactions naturally form a DAG, and have found techniques to come to a consensus (or convergence) without the need for pruning the DAG down to a chain.
In Ferrum, we love the DAG model and believe that we will continue to see a lot of amazing innovations in this space. This model is a natural fit for financial applications as there is no need for miners and blocks, leading to much faster and cheaper transactions, like those in Ferrum Network.
Bring it up in our telegram community (https://t.me/ferrum_network). Our community managers will quickly respond to your question or redirect you to other channels if necessary.