Written by: Jake Pahor
Compiled by: TechFlow
As of December 23, 2022, FANTOM Ecosystem Overview:
• $FTM
• Price = $0.20
• Market Cap = $520 million – Rank 65
• PoS
• All-time high = $3.46 (-94%)
• All-time low = $0.002 (+10,661%)
Fantom was one of the stars of the DeFi Summer of 2021. It attracted the attention of many DeFi Degens and eventually reached a peak of $8 billion in total locked value (TVL) in March 2022.
Due to its low fees and high performance, a thriving ecosystem of innovative projects and communities is developing.
However, an unfortunate series of events led to its demise during 2022 (down 95%):
AC quits, Daniele's past is too painful to look back on, Solidly fails completely, bear market investment sentiment is low
However, these bearish factors have nothing to do with the overall project and its underlying technology. Most of these factors are macro reasons.
Recently, with AC announcing its official return, FANTOM has some bullish motivations:
Continuous operation of 30 years FVM (Fantom Virtual Machine) DApp Gas monetization plan
So, does $FTM still have upside potential in the next bull run?
1. Income
Fantom revenue and fees have been on a downward trend since the start of 2022. They appear to be stabilizing, with FTM ranking 12th in blockchain’s 30-day revenue.
If you look at the P/S ratio (fully diluted market cap / annualized revenue), Fantom is the fifth most undervalued blockchain.
The lower the P/S ratio, the better.
2. National Treasury
AC published a Medium article on November 28th detailing Fantom’s financial history. Here’s the long version:
Over 450M FTM = $90M Over 100M Stablecoins Over 100M Crypto Assets $50M Non-Crypto Assets Total Assets = $340M
At the current payroll burn rate of $7,000,000/year, the project could operate stably for 30 years without touching the FTM asset overhead. That’s pretty impressive.
3. Token Economics
According to statistics provided by Coingecko:
Circulating Supply = 2.54 billion Total Supply = 3.175 billion Market Cap = $520 million FDV = $650 million Market Cap / FDV = 0.8
The Fantom Foundation recently proposed to reduce the gas burn rate from 20% to 5%.
15% of this is being funneled into dApps built on Fantom. This is called the “dApp Gas Monetization Program” and should attract more developers to the chain.
4. Locked Funds
The current circulating supply is 2.54 billion. The total supply of FTM is capped at 3.175 billion, meaning that approximately 80% of tokens are already in circulation.
Tokens distributed to early investors have all been unlocked — meaning the risk of an institutional sell-off is reduced.
The remaining tokens are rewards for validators and delegators who create blocks. These tokens will continue to be distributed until April 2024, when all staking rewards will stop.
Staking FTM helps secure the network and currently you can earn an annual interest rate of 1.8-6%, depending on how long you choose to lock up your tokens.
5. Use Cases
Fantom is a novel Layer 1 project designed for scalability and low-cost transactions. Its native token $FTM is used to:
Pay for transactions; Execute smart contracts; Secure the network through PoS; Governance voting;
There is also a thriving DeFi ecosystem built on Fantom, including Dex, yield aggregators, and lending.
It’s a good sign that so many innovative projects are built on Fantom — including Spooky Swap, Beethoven X, Beefy, Yearn Finance, Qi Dao, and many more.
While the TVL chart doesn’t look great, I expect TVL to rebound when macro conditions improve.
Among many public chains, Fantom ranks 7th in terms of daily active users - about 55,000.
As you can see below, while the expense/revenue ratio has dropped quite a bit since the ATH, daily active users have actually been trending upward since October.
6. Roadmap
The main focus in 2023 seems to be the development and implementation of the Fantom Virtual Machine - FVM. As recently outlined by Simone Pomposi (CMO) in an AMA.
Gitcoin voting is also open now and will run until January 2, 2023. You can vote for your favorite Fantom projects, which will help them receive their share of the matching funds.
7. Team/Funding
There is a perception that Fantom's success is completely dependent on Andre's presence. However, FTM showed this year that they can continue to build without AC.
AC recently announced that he's rejoining, which is a huge boost for the team since he's one of the leading developers in this space. I think now that the team is strong enough, the "AC risk" will be greatly reduced.
There were 4 major rounds of financing in 2018. Investors included 8Decimal Capital, Alameda, Arrington XRP, Block Tower, Obsidian Capital, etc.
Fantom also has a diverse range of partnerships with many companies and governments.
8. Summary
Overall, I’m impressed with how the Fantom team has continued to build in this bear market and navigated through numerous controversial moments in 2022.
Now that AC is back, the treasury is in good shape, and there are some exciting developments in 2023. My only concern is that competition in the Layer 1 space is already fierce, and second-layer scaling solutions (Optimism, Arbitrum) are quickly eating into that market share.
But FTM will definitely remain on my 2023 watchlist.