Error when try to instantiate chain-code on Hyperledger Fabric

So, the issue here is with the COMPOSE_PROJECT_NAME env. When I try to start my network form the folder with network specification this env remains empty for some reason and I get the aforementioned error. When I copy my network specification to /fabric-samples/firtst-network folder and try to start it again the COMPOSE_PROJECT_NAME got set to "net" value and everything works fine. Also when I try to hardcode this value to "net" in /base/peer-base.yaml and try to start the network again from the default folder, I get the time-out ERR on peer.

EDIT1:

The final answer will be: I have not setup .env file for the aforementioned env. variable within the folder.

In my case in .env file I had defined

COMPOSE_PROJECT_NAME=xxx

and in docker-compose.yml file I had

version: '2'

networks:
  yyy:   <----------------

services:
 ...
 ...
    - CORE_VM_DOCKER_HOSTCONFIG_NETWORKMODE=zzz
 ...
 ...

At some point I run to same issue

failed to invoke chaincode name:"lscc" , error: API error (404): network zzz not found

Listing docker networks (docker network ls) shows that network with name xxx_yyy is created so basically changing value of CORE_VM_DOCKER_HOSTCONFIG_NETWORKMODE to xxx_yyy solve issue in my case.

 CORE_VM_DOCKER_HOSTCONFIG_NETWORKMODE=xxx_yyy 

By inspecting the error from the log file you've provided:

peer0.org1.example.com | 2017-10-16 15:59:46.745 UTC [dockercontroller] Start -> ERRO 3d9 start-could not start container: API error (404): {"message":"network _byfn not found"}

It seems that network name has unintentional space character network _byfn, hence I'd guess you need to fix it in docker-compose.yaml file:

Check value of CORE_VM_DOCKER_HOSTCONFIG_NETWORKMODE environment variable, you can find it in base/peer-base.yaml:

version: '2'

services:
  peer-base:
    image: hyperledger/fabric-peer
    environment:
      - CORE_VM_ENDPOINT=unix:///host/var/run/docker.sock
      # the following setting starts chaincode containers on the same
      # bridge network as the peers
      # https://docs.docker.com/compose/networking/
      - CORE_VM_DOCKER_HOSTCONFIG_NETWORKMODE=${COMPOSE_PROJECT_NAME}_byfn
      #- CORE_LOGGING_LEVEL=ERROR
      - CORE_LOGGING_LEVEL=DEBUG
      - CORE_PEER_TLS_ENABLED=true
      - CORE_PEER_GOSSIP_USELEADERELECTION=true
      - CORE_PEER_GOSSIP_ORGLEADER=false
      - CORE_PEER_PROFILE_ENABLED=true
      - CORE_PEER_TLS_CERT_FILE=/etc/hyperledger/fabric/tls/server.crt
      - CORE_PEER_TLS_KEY_FILE=/etc/hyperledger/fabric/tls/server.key
      - CORE_PEER_TLS_ROOTCERT_FILE=/etc/hyperledger/fabric/tls/ca.crt
    working_dir: /opt/gopath/src/github.com/hyperledger/fabric/peer
command: peer node start

Also you can check .env file content, usually it suppose to be:

COMPOSE_PROJECT_NAME=net