What is Phantasma (SOUL): Could smart NFTs be the next big thing?
If Phantasma’s unique utility and cross-chain capabilities gain traction, 2022 might be its big year.
- What are smart NFTs?
- The dual-token system: Looking at SOUL and KCAL
- The Phantasma consensus mechanism
- More SOUL tokenomics
- Is the Phantasma chain eco-friendly?
- Cross-chain NFTs: The next boom?
The Phantasma blockchain, with its native SOUL coin, built from the ground up with decentralised video gaming and NFT trading as points of focus, claims to deliver high throughput and low transaction fees, with what its founders, who include Portuguese smart contract expert Sérgio Flores, say are innovative cross-chain, smart NFT capabilities.
Through a partnership with the Melbourne, Australia–based games developer GOATi Entertainment and its Pavillion gaming hub, Phantasma has released a suite of gaming and DeFi applications since the blockchain went live in October 2019. Additional features, which include a two-token economic model and side-chain architecture, bring what Phantasma says will be enhanced scalability.
With cult movie legend Kevin Smith listed as a fan and key features separating it from the competition, Phantasma has some big things going for it. So what is Phantasma (SOUL) and what is Phantasma coin used for? We discover all that and more in our comprehensive guide below!
What are smart NFTs?
We have all heard of smart contracts, but what about smart NFTs (non-fungible tokens)? As a gaming-focused blockchain solution, developers require Phantasma to provide programmable, dynamic creation tools. But how does Phantasma work to deliver this?
Cleverly, the metadata of Phantasma’s smart NFTs combine ROM and RAM elements, the former being immutable while the latter can be programmed to the developer’s specifications. This allows the artist or developer to assign unchangeable parameters to their creations at the ROM level, while allowing changeability at the player level. For instance, a developer could create a sword with a set damage score, while the player can change the colour or design.
Let’s look at a real-world example. The 22 Racing Series, developed by GOATi, is a racing game that is a showcase for the potential for what smart NFTs can do. Futuristic vehicles can be created by players through collecting and combining individual, immutable components. The constituent parts remain the same, but the end product is the result of the player’s imagination. The player can then trade that product in-game or swap constituent parts with other players.
The potential of smart NFTs goes beyond gaming. Smart NFTs allow for timed licenses, giving users access to a product for a limited time. Say a label wants to allow access to a song for a set time, perhaps as part of an online music showcase? Timed smart NFTs provide the functionality to make that possible.
It is fair to say that the full potential of smart NFTs is far from being realised, and with metaverse platforms set to be the next big thing, there is a strong chance that we’ll be seeing more and more of them.
The dual-token system: Looking at SOUL and KCAL
Phantasma’s economy consists of two native cryptocurrencies with their own unique purposes. SOUL is the primary unit powering the entire ecosystem, used for staking, governance and storage allocation, while KCAL is required for all on-chain actions related to minting and swapping NFTs.
Phantasma’s staking programme is conducted via the Poltergeist Wallet. Staking rewards are proportional to staking amount and duration, as is on-chain storage allocation. Notably, those staking more than 50,000 SOUL are privy to an equal share of 125,000 of SOUL monthly rewards. Governance is also proportional to your staking engagement.
KCAL can be thought of as the fuel. Minting and transaction fees are paid in KCAL, thus all users must have a certain amount of KCAL held in their wallets. Staking rewards are also paid out in KCAL. Developers deploying their own smart contracts must also pay fees in KCAL.
Another notable feature of the Poltergeist Wallet is its impressive cross-chain capabilities. Cross-chain swaps can be performed between SOUL and tokens on the Ethereum, Binance and NEO blockchains, all from a single key. Note that liquidity cannot be provided through the Poltergeist Wallet, but Uniswap allows for SOUL:ETH and KCAL:ETH pool contributions, with a flat return of 0.3% fees on all trades.
KuCoin is the main provider of SOUL liquidity, while KCAL can be purchased on Uniswap and PancakeSwap.
The Phantasma consensus mechanism
Phantasma (SOUL) keeps tight control over its network of Proof-of-Stake block producers (BPs). At the time of the mainnet launch in 2019, 10 active BPs and 15 standby BPs (making for 25 total validators) were preselected, with the total number increasing at a rate of three a year. The number of active BPs is proportional to the total.
Through on-chain governance, SOUL holders vote on which validators get to be active every quarter. Active BPs are required to be continuously active. After one hour of inactivity, the next most popular standby BP is promoted.
The minimum staking requirement to become a BP (either active or standby) is 50,000 SOUL. BP rewards are derived from the daily inflation of SOUL, with 75% going to active BPs and 25% going to standby BPs. Active BPs also receive a minimum 25% of all transaction fees for the blocks that they validate.
BPs serve one other major function in the Phantasma ecosystem: decentralised storage. Any user may stake SOUL to get decentralised storage in return, at a rate of 40 kilobytes per SOUL. While this could provide developers with some added on-chain functionality, given its rudimentary nature, a more sophisticated platform like Storj might be a better option at this point.
More SOUL tokenomics
The SOUL coin runs on an inflationary model pegged at 3% per year. Of that 3%, 1% is allocated to Phantom Force, the community of developers dedicated to creating and launching DApps on the Phantasma cryptocurrency chain. Another 1% is reserved for the all-important BP rewards, allocated to nodes helping to keep the chain secure. The last 1% is reserved for ecosystem incentives.
In addition to the 3% inflationary coins, 125,000 SOUL are minted each month for the distribution of staking rewards to those staking more that 50,000 SOUL in a single wallet.
At time of writing, there are 103,158,489 SOUL in circulation. Being inflationary, there is no maximum supply. Currently trading at $3.56, the market capitalisation of SOUL is slightly over $357m (£264m), ranking at number 166 on the crypto charts. In terms of trading volume, a recent 24-hour high of $14.83m amounted to 0.04% of market cap.
For a deep look into SOUL’s latest trading activity and forecaster insights, be sure to check out our predictor here.
Is the Phantasma chain eco-friendly?
Phantasma (SOUL) is particularly boastful of its green credentials, although a lot of these claims come from its use of the PoS consensus mechanism. While PoS uses considerably less power than the Proof-of-Work (PoW) method used by Bitcoin and Ethereum, it is also becoming ubiquitous among newer blockchain offerings. Furthermore, Ethereum is slated to transition to the PoS method by the end of 2022.
That said, Phantasma’s high throughput means that NFT minting is genuinely efficient. The ability to mint thousands of NFTs in a single transaction helps to reduce power consumption. Taking Phantasma’s own statistics at face value, an average of 0.1 kWh is consumed per NFT minted, against Ethereum’s 75 kWh figure.
Phantasma is also partnering with Save Planet Earth for the distribution of the latter’s Carbon Credit NFTs.
Cross-chain NFTs: The next boom?
Among Phantasma’s various components, the GhostMarket NFT marketplace could be the one with the most impressive utility. Despite being incomparable in trading volume against OpenSea, GhostMarket has one feature that the former is lacking: Cross-chain compatibility. In fact, on GhostMarket, NFTs can be traded across the Phantasma, Binance, Neo, Polygon and Avalanche blockchains, with Ethereum and Solana next in line to be added.
GhostMarket allows for easy minting of NFT collections, instantly tradeable on all supported blockchains. Furthermore, Phantasma’s unique combination of ROM and RAM elements allows creators an exceptional degree of freedom in how their NFTs are constituted. Plus, the all-important custom royalties option allows NFT creators to generate returns on the secondaries market.
The NFT market is only likely to get bigger and bigger, not least because of the metaverse revolution on the horizon. GhostMarket’s scalable and flexible NFT offerings could be well placed to capitalise on it. Coupled with further DApp developer engagement on the core blockchain ecosystem, there could be big things in store for Phantasma and the Phantasma cryptocurrency in 2022.
How many Phantasma coins are there?
There are currently 103,158,489 SOUL in circulation, with inflation pegged at 3% year-on-year.
Is Phantasma secure?
Phantasma is secured through a PoS consensus mechanism, with SOUL coin holders voting on block validators every quarter.
What makes Phantasma unique?
Phantasma claims to provide unrivalled cross-chain NFT trading functionality. The unique combination of ROM and RAM programmability is tailor-made for decentralised video gaming.