Fuse.io Review [2024] | Layer-1 Blockchain for Web3 Digital Payments

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.

What is Fuse?

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.

History of the Fuse Network

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.

About Fuse 2.0

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.

How Fuse 2.0 Works

Delegated Proof of Stake (dPoS)

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.

Roles and Entities

There are four distinct roles for various entities within the new Fuse 2.0 architecture. These are:

• Operators – these are developers that take advantage of the seamless dApp development process to create Web3 apps and facilitate payments on the Fuse platform;
• Merchants – are the participants who commission and operate the dApps created by the operators, such as POS (point of sales), accounting, and invoicing apps, and run loyalty programs for their customers;
• Users – they are the end users of the dApps launched on the Fuse platform and operated by the merchants;
• Power Validators – these run and maintain the payment infrastructure that Operators use to facilitate payments.

Core Elements

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:

1. Fuse SDK;
2. Mobile Stack;
3. Fuse Charge;
4. Voltage.finance.

They are distinct products and can be used independently of one another, but most applications combine them to offer the best experiences.

1. Fuse SDK

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.

2. Fuse Charge

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

3. Mobile Stack

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

4. Voltage Finance

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:

• Staking – locking users’ assets in smart contracts and rewarding them for participating in the Fuse network governance;
• Swaps – exchanging between multiple Fuse tokens minted within the Fuse ecosystem; 
• Yield farming – the platform enables users to stake LP (liquidity provider) tokens in various farms to earn native VOLT tokens as rewards;
• Borrowing – users can lend and borrow funds and earn or pay interest on them, respectively;
• Bridging – Fuse, being EVM-compatible, enables token bridging for assets native to other EVM-compatible networks or even compliant with ERC-20 standards.

Why Developers Build on the Fuse Network

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.

• EVM-compatibility – the Fuse blockchain is cross-chain compatible, starting with Ethereum, the leading smart contract platform. Apps created for the Ethereum platform and other EVM-compatible networks, such as Polygon (MATIC), BNB Chain (BNB), and Avalanche (AVAX), among others, can be ported over to Fuse with little modifications;
• Web3 payment solutions – Fuse offers businesses and developers a comprehensive suite of infrastructure tools to enable Web3 payments on their applications, making it easy to unlock and extend their functionalities;
• Fast and low-cost transactions – the Fuse blockchain maintains a sub-5-second average block generation time with transactions costing as little as $0.001;
• Future proof – more blockchains are launching or are making the transition to using staking as a consensus mechanism, including Ethereum. This means that PoS and derivative systems are bound to become popular for the near to long-term period. Fuse has also made the transition to staking from its previous PoA mechanism;
• Access to a thriving community – the Fuse ecosystem is not just a thriving community in isolation, it is also part of the vast network of blockchain communities that are EVM-compatible, helping share ideas and resources;
• Scalability – the Fuse network offers a scalable solution for real-world applications that often suffer from throttled resources. dApps on the platform can take advantage of the fast transaction speeds and low costs to reach and scale their user bases;
• Development and onboarding speed – new developers can easily create new dApps on the Fuse platform using white-label templates, making it easy to get setup and running. The same applies to those with already existing apps who wish to port them over to Fuse, the process is simple and fast, ensuring that they avoid or endure minimal service interruptions.

Tokenomics: FUSE Token (FUSE)

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:

• Governance – with the transition of the Fuse network to dPoS staking, it is now possible for FUSE token holders to vote on proposed network changes or make the proposals themselves using their stoked assets;
• Validation – FUSE token holders can engage in transaction verification by becoming node operators and earning a reward, while others can delegate their tokens and earn rewards through sharing with their delegators;
• Payments – FUSE can be used for value transfer between wallets on the Fuse network, and this does not require engagement with third-party smart contracts, therefore, it is cost-effective and fast;
• Speculation – like most cryptocurrencies, FUSE tokens can be held for speculative purposes by crypto investors or even community members.

Where to Get FUSE Tokens

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:

• BNB Chain – https://bscscan.com/address/0x5857c96dae9cf8511b08cb07f85753c472d36ea3
• Arbitrum One – https://arbiscan.io/token/0xbdef0e9ef12e689f366fe494a7a7d0dad25d9286
• Polygon – https://polygonscan.com/address/0xf915fdda4c882731c0456a4214548cd13a822886

Therefore, it is possible to find FUSE tokens trading on platforms supported by these networks.

Is the Fuse Network Safe?

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.

Fuse Network Pros and Cons

Pros

• Fast and low-cost – transactions on the Fuse Network settle on average every 5 seconds and only cost about $0.001;
• Privacy-enabled – Fuse 2.0 has enabled privacy features based on the popular zero-knowledge (ZK) proofs technology, a feature that is ideal for businesses that want to integrate digital crypto payments;
• Mobile-first – thanks to the Mobile stack SDK, businesses can easily deploy mobile-optimized Web3 dApps fast and cost-effectively;
• Designed for small businesses – SMBs lack the budget for large development projects, but Fuse provides the tools for these businesses to offer customer-friendly experiences;
• EVM-compatibility – projects hosted on the Ethereum Virtual Machine and other networks that are EVM-compatible can be ported over to Fuse, while their tokens bridged easily with native bridge applications;
• Community-owned – the Fuse community is involved in the governance of the project through staking their FUSE tokens then proposing and/or voting on proposals. Additionally, Fuse has enabled developers to create their own tokens that can be used within various communities to offer customized experiences.

Cons

• There is no proof of a security audit having been done on Fuse 2.0, and the last audit was done three years ago. Therefore, it is hard to judge objectively whether the project is still as safe as it was in 2020;
• FUSE tokens, despite being native assets on the Fuse ecosystem, are still hosted on the Ethereum network making the network partially reliant on the latter.

Fuse’s Community Support Channels

• Telegram: https://t.me/fuseio
• Twitter: https://twitter.com/fuse_network
• LinkedIn: https://www.linkedin.com/company/fuseio
• GitHub: https://github.com/fuseio
• Forum: https://forum.fuse.io
• Blog: https://news.fuse.io/
• Discord: https://discordapp.com/invite/jpPMeSZ

Final thoughts

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.

Frequently Asked Questions on the Fuse Network