The Fuse Network has been around since 2019 but has recently undergone a major upgrade to Fuse 2.0. In this review, we discuss what has changed and what it means to the community, including the developers, users, and validators. While at it, we also consider the new version’s security, pros and cons, and why entrepreneurs and developers might want to build on this protocol.
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Founded by Mark Smargon, Fuse has its headquarters based in Tel Aviv, Israel. The protocol is designed as a B2B infrastructure provider enabling entrepreneurs and organizations to build decentralized blockchain-based apps to better serve their customers.
So far, Fuse has attracted more than 100 decentralized service providers, also called operators, who have launched their dApps on the platform and forming part of the wider ecosystem. The dApps are strewn across various sectors, including gaming, mobile payments, non-fungible tokens (NFTs), decentralized exchanges (DEXs), and token bridges, among others.
From the very start, Fuse has often focused on becoming an enabler for businesses, communities, and organizations to integrate and incorporate Web3 features into their systems and products. And for the three years that defined the first phase of the protocol, the project managed to register more than 1.3 million accounts (or unique wallet addresses).
During those three years, the Fuse Network was enhanced with the launch of three other components: Fuse Charge (formerly Studio), Voltage Finance, and the native wallet Fuse Cash. The three components complement one another to provide the necessary tools and environment for developers to deploy their custom dApps.
The entire ecosystem is powered by the Fuse blockchain, which is an independent layer 1 network which was initially designed to work using the Proof of Authority (PoA) consensus mechanism. In a PoA system, validators are chosen based on their reputation or identity.
Fuse has, however, transitioned from a PoA system to delegated Proof of Stake (dPoS), which we will discuss later.
A notable difference between Fuse V1.0 and V2.0 is the use of different consensus mechanisms, as noted earlier. The first iteration was launched with reliance on PoA, while the now later iteration uses dPoS, which ideally offers more decentralization and better security.
However, the biggest change comes in the form of transaction execution, a bulk of which has been offloaded onto the execution layer as opposed to the business and consumer layers as previously designed.
Fuse calls this the vertical integration design that comprises three layers: consumer, business, and execution (blockchain) layers. A transaction effected by a customer on an affiliate merchant platform will be signed as payment to the merchant, who in turn passes it on to the validators after adding gas.
The validators on the execution layer will confirm the transaction and add it to the blockchain. Fuse calls this design vertical integration, as illustrated above.
The overarching idea behind the move from Fuse 1.0 to 2.0 is to focus on empowering small and medium-sized businesses (SMBs) with the necessary infrastructure to enable Web3 payments. This way, they can launch customized apps seamlessly and process crypto payments cost-effectively.
It is the same business model employed by major payment networks such as Visa and Mastercard, which, according to Fuse, are their main competition.
Fuse 2.0 is primarily designed with SMBs in mind, but anyone can still leverage its open infrastructure to launch and scale their Web3 dApps. The underlying blockchain is EVM-compatible, making it easy to port or migrate existing applications created for the Ethereum network or other EVM-compatible networks.
dPoS consensus mechanism is a variant of the PoS staking system in which transaction validators stake a part of their assets to earn the right to verify transactions.
The delegated aspect enables stakeholders to cede their rights to other participants who are willing to take up more responsibility within the network. As a result, the delegates share a portion of the returns earned by the delegators or validators.
With Fuse 2.0, stakeholders have the right to elect their delegates at any time by assigning and reassigning with whom they want to stake their tokens. The process is simple and easy to do through the Voltage Finance app.
There are four distinct roles for various entities within the new Fuse 2.0 architecture. These are:
Fuse 2.0 has four other core elements excluding the underlying blockchain or Fuse Chain. We have extensively covered the blockchain element, so in this section, we will consider the other four in brief, and these are:
They are distinct products and can be used independently of one another, but most applications combine them to offer the best experiences.
Fuse’s SDK (software development kit) is a set of tools designed to let companies plug Web3 services and crypto payments into their existing client applications. The product is designed to provide an easy way for companies looking to upgrade their apps and save on development costs.
Additionally, developers tapping into the Fuse SDK will leverage the low cost of transacting on the Fuse blockchain and deploy apps fast.
Fuse Charge is a blockchain API (application programming interface) that enables developers and users to activate Web3 payments on their applications using both crypto and fiat channels.
The solution is aimed at providing low-cost, fast, and secure borderless payments for businesses and individuals.
Watch the video: Introducing Fuse Charge
Another SDK offered by Fuse, enabling Operators to build mobile-first applications for both iOS and Android platforms. SMBs can easily create their next app with Web3 capabilities powered by the Fuse network or upgrade their existing apps by integrating the Fuse Mobile Stack SDK
Voltage Finance is a decentralized finance (DeFi) platform supporting the Volt App, which is a Web3 non-custodial app. The platform offers five key features, which are:
As noted earlier, Fuse has attracted more than 100 service providers to the network and supported the creation of over 1.3 million accounts (unique wallet addresses). Here are some plausible reasons why the recently launched blockchain ecosystem has experienced such success.
FUSE is an ERC-20 token hosted on the Ethereum platform and native to the Fuse ecosystem.
The Fuse token is primarily used to pay network fees whenever a transaction is effected on the blockchain, but it also serves several other functions, including:
Fuse is traded on several cryptocurrency exchanges, including centralized and decentralized platforms (DEXs). Here are some of them:
There are also other wrapped versions of the FUSE token on other EVM-compatible blockchains, including:
Therefore, it is possible to find FUSE tokens trading on platforms supported by these networks.
The Fuse network team reported the results of its smart contract security audit in 2020, which was done by the digital product and cybersecurity agency Zokyo. According to the report, Zokyo rated Fuse at 93%, giving the contract a clean bill of health.
The team is yet to release any recent security audits, especially on the renewed second iteration Fuse 2.0 smart contract.
With the launch of Fuse 2.0, the Fuse team has shifted its target competition from other smart contract platforms such as Ethereum but is now looking to best traditional establishments such as Visa and Mastercard. It looks to empower businesses to offer mobile payments through Web3 applications.
With Fuse 2.0, it is now easier to launch an application that accepts mobile digital payments, operates a loyalty program, supports unique assets such as NFTs, and enables effortless investing, among other use cases.
These are only the use cases optimized for the platform so far. Based on the project’s history, it is expected that over the next several years, it will be able to offer more features, tools, and functionality to help bring Web3 payments to the masses.
Risk Disclosure and Disclaimer: The information provided in this review should not be regarded as investment advice. Cryptocurrency assets experience high market volatility, and therefore buying, selling, and trading them exposes you to significant financial risks.
Fuse 2.0 is a public blockchain designed to empower businesses to design and deploy Web3 payments on their applications. The network represents an upgrade from the first iteration, which was launched in September 2019.
Fuse is different from most other blockchains in several ways, including the fact that it is EVM-compatible, utilizes a delegated staking mechanism, offers transaction speeds of about 5 seconds, and gas fees of as low as $0.001.
Initially, Fuse utilized Authority Round (AuRa), a Proof of Authority (PoA) consensus mechanism developed by Parity. However, with the launch of Fuse 2.0, the network has migrated to the delegated Proof of Stake (dPoS) system that enables the staking of FUSE tokens.
Fuse SDK (software development kit) is a set of tools designed to let businesses easily integrate Web3 payments into their existing payment-ready mobile products.
FUSE token is a native asset on the Fuse blockchain ecosystem primarily used to facilitate payment of network fees. Additionally, it is now used for governance, staking for node operation, and speculation.
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