Those who happened to be caught in the depths of depravity of the last cycle will know that Fantom was the place to be for a long time.
It ticks all the boxes of ape-like gambling needs. High speed, low fees, a solid lead in Andre Cronje, and sickeningly high payouts found in an ancient tomb cemetery. Ahhh, memories!
Sadly, it all seemed to fall apart in early 2022, leaving everyone’s favorite ghost chain a complete ghost town. However, recent price action seems to indicate that Fantom is rising from the grave, and the $FTM token has remained strong throughout the recent drop.
Long story short, it looks like Fantom is back, and so is Andre; therefore, Fall must be back with him.
With all of this in mind, and considering the breakneck pace at which narratives change in this space, it makes perfect sense to dive into the Fantom ecosystem, see what they’re cooking up, and stay a step ahead.
Come in!
A brief history of Fantom
Fantom is a first-layer blockchain born in 2018 that brings an extremely fast and low-fee user experience that all cryptocurrency natives have been craving.
In 2019, Fantom partnered with Binance, and shortly thereafter, the EVM-compatible Fantom Opera was born into the world of decadent speculation, just in time for the crazy bull run of 2021.
Amid the chaos of the 2021 bull run, Fantom quickly became the hot spot for all things DeFi, and a large number of Degens flocked to the chain.
The gathering of crypto bros was so big that Fantom became the second-largest chain in DeFi action, with TVL eventually peaking at around $8 billion in March 2022.
Behind its success are many community-driven af applications and a DeFi mastermind named Andre Cronje.
Cronje was the driving force behind some of the most high-tech DeFi applications of the time, including Yearn Finance and Solidly, the first Ve(3,3)-style DEX. The Ve(3,3) model created by Cronje is still widely used in the cryptocurrency space today by projects such as Thena, Aerodrome, and Velodrome.
However, Cronje isn't the only super-brain on board.
Professor Bernhard Scholz from the School of Computer Science at the University of Sydney is another outstanding contributor and currently serves as the principal investigator.
This guy invented the Souffle programming language, a data logging language often used for static program analysis by companies like Oracle and Amazon. This team is clearly full of talent!
But like all good things, it all came to an end in early 2022, and Fantom, along with the wider cryptocurrency market, fell into the darkness of a bear market.
The market crash seemed to hit Fantom particularly hard, likely due to the insane leverage, yields, and ponzi economics thriving on-chain. At its lowest point, $FTM’s price was down a staggering -95% from its 2021 all-time high, enough to send shivers down the spines of even the most cold-blooded degenerate.
If that wasn't bad enough, things are about to get even worse.
The next big blow to Fantom came from a tweet in March 2022 from Andre Cronje’s partner, Anton Nell, which read: “Andre and I have decided that we will end our contributions to DeFi/crypto.”
As you can imagine, sentiment around the chain plummeted further at the time, and it looked like Fantom would fade into oblivion, forever becoming a forgotten category of crypto.
Then on July 6, 2023, news broke that approximately $102 million had been mysteriously withdrawn from Multichain’s Fantom bridge. A total of 7,214 WETH (worth approximately $13.6 million), 1,024 WBTC (worth $31 million), and $58 million in USDC had been siphoned from the Fantom bridge’s Ethereum smart contract.
Mutlichain was the biggest bridge in the crypto space at the time; to say it was detrimental would be an understatement. For the remaining die-hard supporters, all hope was lost.
Luckily, all of the greatest stories always involve a failed character who rises from the ashes like a phoenix, and it looks like Fantom can do just that.
TVL is slowly rising, Andre is back, apps in the ecosystem continue to be built, and the user base is growing steadily. You really can’t beat a good comeback story.
Once it’s built, they’ll come, right?
Fantom has always felt like an underrated ecosystem, having been at the forefront of epic crypto, with a great group of developers behind it. The good news is that they appear to be back and working harder than ever, with some major upgrades in the works.
Sonic Upgrade
The Sonic upgrade is a major upgrade that aims to improve upon all the things that made the Fantom successful in the past. Sonics is the key word here, so let’s take a look at what that involves.
Most importantly, throughput has been increased on an already very fast blockchain. We expect transaction speeds to exceed 2,000 per second, and to be completed within a second.
This would put it on the same level as the likes of Solana, and given the success of the Solana ecosystem so far this cycle, Fantom could be the next challenger to this superior throughput speed.
The speed boost is achieved through the new Fantom virtual machine, which will replace the old Ethereum virtual machine model. FVM converts the old EVM bytecode into a new virtual machine format, supports super instructions, and optimizes the bundling of common transaction types.
All of this will enable Fantom validators to execute smart contracts with greater efficiency and bring a 65x speedup over the old EVM mechanism.
The Sonic upgrade also significantly reduces storage requirements by approximately 90%. This new Carmen database storage technology uses a flat storage mechanism instead of a tree structure, simplifying data retrieval and real-time pruning.
Live pruning refers to the ability of validators to discard historical data that is no longer needed without disrupting the network, freeing up space and reducing storage requirements.
For example, the amount of storage required for an archive node size drops from 11TB to under 1TB. That’s pretty impressive!
This incredible new technology is currently in the testnet phase, and we can expect to see the new Fantom Sonic network replacing the current Fantom Opera network very soon (Spring 2024).
At the launch of the new Sonic Network, $FTM tokens will become $S tokens and will be redeemable 1:1. Yes, this means a whole new chart!
Currently, a closed testnet that showcases Sonic’s capabilities is available, as well as a builder testnet that allows developers to experience what it’s like to build dApps on the new network.
For an up-to-date timeline of progress on new product launches, you can check out the Sonic Status dashboard here.
Ultimately, all of these new technology upgrades will greatly enhance the growth of the Fantom network and significantly improve our user experience through increased speeds and lower gas fees.
In addition, there are some generous rewards.
Incentive Program
Nothing attracts users and developers to an ecosystem like some good old-fashioned incentives. Fantom appears to be rolling out a pretty solid strategy to attract a large number of stakers and builders back to the chain.
The biggest of these incentive programs is for you developers, and that is the new Gas monetization program.
The basic idea is that dApps on the Fantom network are rewarded with 15% of the gas fees they incur for attracting users to the network. However, there are some requirements that must be met in order to receive these rewards.
First, your dApp needs to be live on the mainnet for more than a month, you need to generate more than 15,000 transactions per contract, and finally, you need an active multi-signature wallet address.
This gas monetization strategy aims to replicate the ad revenue sharing model that web2 creators enjoy in the normal world. This is all achieved by reducing the transaction burn rate of $FTM tokens from 20% to 5% and distributing the difference to the dApps themselves.
Obviously, dApps that do not meet the eligibility requirements for these rewards will generate gas, with 15% of these fees being distributed tiered to the top 12 dApps quarterly.
For a comprehensive look at the Gas monetization plan, please review the dedicated section of the Fantom documentation here.
Regulating Stablecoins
On April 5, 2024, Fantom's regulated stablecoin USDC.e was launched with the support of Circle and Wormhole. This USDC.e is bridged with the native USDC and can be upgraded to the native USDC in the future.
Having a bridged version of USDC on the Fantom network would allow for seamless bridging to other networks and increase DeFi activity on-chain.
Let’s face it: a lot of people in crypto are just lazy, and making it as easy as possible for them to send funds to the Fantom network would be a huge win for attracting more users.
The Fantom Foundation has anticipated the upgrade to native USDC, which provides additional liquidity for USDC.e trading pairs on Beethoven X and Equalizer Exchange.
These USDC.e pairs can be upgraded to native USDC in the future, and the Fantom Foundation is happy to keep them as strong as possible for future upgrades.
Did someone say airdrop?
Now, with all this new activity happening on the Fantom network and lots of new dApps popping up all over the place, it’s reasonable to assume (yes, I said assume) that there will be some airdrops.
If you haven’t done so already, it might be worth raising some funds and trying out some of the DeFi applications on the network. It definitely won’t hurt to give it a try anyway!
Speaking of apps, let’s take a look at some of the interesting places on the Fantom network.
Applications of interest
The current TVL for all applications in the Fantom space is just over $138 million.
Now there are two ways of looking at this: a pessimist might say it's just a tiny number and that the chain is likely out of business, but an optimist sees some huge room for growth. I tend to be optimistic in all areas of life, and to be honest, it makes things more interesting that way.
Ghost Swap
It’s old fashioned, but it works! Anyone who played on the last round of Fantom is likely familiar with SpookySwap and its $BOO token.
As the current#1DEX on the Fantom network with a market cap of just $22M, this is simply incredible. $BOO would need to grow over 10x in value to reach its 2021 all-time high in market cap, so there is definitely some room for growth here.
We’ve all seen what happened to low-cap DEXs like Base recently. TVL on SpookySwap has just started to rise, and if Fantom is going to get some serious traction in the near future, a decline like this could cause serious headaches in hindsight.
Equalizer
Speaking of dex on Base, we have Equalizer, which is available on both Base and Fantom. This is another product that has seen a huge increase in TVL recently, but has a ridiculously low market cap.
As a newer application, Equalizer has the advantage of having no previous loop pack holders waiting to dump on unsuspecting victims. Therefore, it is a good game for anyone who wants to participate in the Fantom ecosystem.
Swapping, locking, and liquidity pools are available on the platform, with the top pool WFTM/EQUAL currently paying out around 46%.
This is another deck built using Andre Cronje’s Ve(3,3) model, so if you want something that shows off some of that OG Fantom tech, this might be the deck for you.
Beefy
Anyone who has used Beefy knows that it is pretty cool. As a multi-chain yield optimization platform, it is pretty much every farmer’s dream. With 21 chains available and over 650 different vaults on the platform, you can find any yield you want here.
$BIFI is the protocol's native revenue share and governance token, with 100% of tokens already in circulation. With a large number of $FTM vaults available, this might be a good place to use your tokens. Of course, there are also NFA and DYOR.
Other notable projects include:
Speedometer
Lynx Protocol (criminal)
LiquidDriver
Port Finance
Beethoven X
With incentive programs like the Gas Optimization Program, it’s safe to say we’ll likely see more new and innovative protocols on Fantom in the coming months. If you’re hoping to try your luck with an airdrop or two, it’s worth keeping an eye on these protocols.
One of the most striking aspects of the entire Fantom Network is the deep integration of the $FTM token itself. Therefore, it is worthwhile to understand its functionality and some basic token economics.
$FTM Token Economics
The $FTM token is the native token of the Fantom Network and can be used for almost everything.
Governance, security, and gas are its main use cases. Personally, I would particularly like to see a native token for gas, as its value would grow with the growth of the entire network, which is exactly what Fantom is working to rediscover.
$FTM tokens have pros and cons, so let’s get the cons out of the way first.
As an older coin, it has seen some serious highs and lows over the years, which could mean there is a group of disgruntled holders waiting to exit when they break even.
My hope is that with all the new technology that emerges, these holders will be able to see greater upside potential as they hold on, and perhaps reinvest in the cycle again.
Another thing about old coins is that in the world of crypto, the shiniest new things are usually the most attractive.
Whether this will deter people from rejoining the network will depend on how the Fantom team rolls out these new upgrades and gets people interested in the network again.
We are acutely aware that it is definitely difficult to turn people away from the shinier new stuff.
As an older coin, the advantage is that most tokens are already in circulation.
Currently, 2.8 billion of the 3.175 billion tokens have been put into the market, equivalent to about 88%. Although the unlocking will end in 2028, the inflation rate of $FTM will be small, estimated at about 2% per year.
With the $FTM token launched in 2018, the original token distribution may look very different now than it did initially.
It’s reasonable to speculate that many of the tokens allocated to the team and advisors (~12% each) may now have entered the open market, which can only be a good thing.
The next huge bull factor in the Fantom Foundation’s case is its massive war chest, which is estimated to give it an impressive 30 years of runway.
In this November 2022 blog post, Cronje stated that the Fantom Foundation holds over 450 million $FTM tokens, over $100 million in stablecoins, and another $50 million in non-crypto funds.
Clearly they have more than enough fuel to stimulate the ecosystem if they choose to do so.
Final Thoughts
Few ecosystems in the crypto space have experienced as many ups and downs as Fantom has over the past five years.
Any other chain with such a colorful history would probably have been wiped off the face of the earth by now, but Fantom seems to refuse to die.
The Fantom Foundation continues to take action to bring respect back to the chain and restore it to its former glory.
In January, the Fantom Foundation obtained a default judgment in court to recover lost Multichain funds, a major step in the recovery process after Fantom sued the Multichain Foundation for breach of contract and fraudulently misrepresenting losses incurred by the Fantom network.
This would be a huge bullish catalyst along with the new technology upgrades coming from FVM and Sonic Upgrades and could turn attention towards them.
With Andre returning to the Fantom Foundation and joining other talented team members, plus a host of new incentives for builders to build, and a massive financial backing, it looks like Fantom’s resurgence is just around the corner.
Personally, I would love to see a resurrection of this chain that I once enjoyed so much.
Let’s just hope Andre can stick around and make this happen!
“We are aware of the changes of the times, have gone all in on the overall trend, and have participated in and witnessed many successful cases. We would like to remind all of you again that as the top 10% of people in this era, your most important mission is to correctly identify the strongest trend of this era, accept it wholeheartedly, stop questioning, think positively, and get on board bravely.”
