- INVESTMENT IDEAS
Fantom (FTM) dishes out $370m and gains $1.6bn cap
- Fantom doubles Avalanche’s $180m ‘Rush’ - with a $370m incentive for builders.
- After FTM’s price went up 150%, the programme now extends to ‘GameFi’.
- Investor sentiment remains fickle, and how users get a payout is vague.
- Andre Cronje and the Fantom Foundation are powerhouses. Cautious optimism is warranted.
Fantom in a Rush
What’s better than double? More than double, of course!
After Avalanche announced its $180m Rush liquidity incentive, Andre Cronje’s Fantom Foundation announced a $370m program for all De-Fi builders on the DAG-powered chain. Double or nothing, right?
The press release aims straight for the jugular of its ‘inspiration’: *“Over the past few months, we’ve seen a lot of exciting things going on in regards to liquidity mining. So exciting that even other foundations behind their respective chains started to reward users of protocols willing to deploy on top of their chain.
We’ve been asked to do the same, but playing by the book doesn’t warrant different results. Therefore we have decided to introduce a different kind of program to align better incentives between users, builders, and the network.”*
The programme would initially distribute FTM tokens to De-Fi builders according to their TVL. On 1 October 2021, the Foundation extended it from DeFi to blockchain games. AXS success and Cronje developing Rarity are likely influences.
FTM foundation will release the incentive’s funds to successful applicants after a two-month cliff. Awards are then vested monthly over 12 months. Should a project’s TVL fall below $5m during the vesting period, vesting pauses until the project reaches minimum TVL again.
Let it rain FTMs
The token’s price exploded on announcement day, 30 August 2021. To holders’ delight, it moved up more than 150% in the following week. That added $1.6bn in market cap to Fantom blockchain, according to Messari. Probably one of the most successful press releases ever.
The program made FTM’s price make a quantum leap up and attracted DeFi value. More than $1.4bn are locked in the top 10 De-Fi projects on Fantom.
Now Fantom is positioning itself as the perfect ‘GameFi’ chain, touting its one-second transaction finality and near-zero fees. It offers “reliably consistent and smooth performance even during periods of extremely high traffic.”, according to its website. Well, this chain has seen nothing like Ethereum-levels of traffic yet.
Axie Infinity took off when they introduced their Ronin chain. Ronin allowed transactions with minimal fees and this turbo-charged peer-to-peer trading of in-game items. Fantom is well-positioned to deliver what gamers need. With a metric tonne of FTM waiting for developers who can execute well, there’s reason to assume we’ll see a few big successes coming from here.
Buying FTM and staking on one of the top DEXs or Vaults has a sky-high probability of unlocking additional FTM airdrops. Project teams will pass on the helicopter money to their customers for increased satisfaction. FTM’s number one DEX, SpookySwap, offers a choice of multiple 100%+ farms. A good shot at getting wet in the FTM rain. Do your own research before committing funds.
Ghostly shadows of promises
Fantom is focused on fresh developers instead of cherry-picking fad-ey De-Fi platforms the way Avalanche did. Yet, the incredible success that Aave had when deploying on Avalanche on 4 October 2021 shows that strengthening winners is a pretty valid strategy. Aave’s value proposition is clear: use our services and receive AVAX airdrops. BTW: bridge your ETH asset. No new powder is necessary. $2bn+ in TVL after just 24 hours shows that the message was clear.
True to Fantom’s name, it’s not clear how users can profit from its $370m incentive programme. It’s likely, but not certain, that DEXs will share the gifts with their users. Each project has to be checked individually.
Games on FTM sound great, but apart from Rarity, none come to mind. Fantom’s project directory doesn’t even have a ‘Games’ category! And the same playbook for developer incentives has since been copied by Hedera with more than $5bn.
An optimist could point to the fact that it’s still early days for Fantom and its incentive. A pessimist would argue that it’s all a bit vague and could well be a mirage or a phantom.
Shortly after the program’s hype died down, the big dip in FTM’s price showed just how fickle investors’ trust is.
You have to hand it to Fantom: They’re not shy. While some point out that a blockchain platform should use all of its capital to boost development, FTMs incentive has significantly grown this alt-coin.
Yearn founder Andre Cronje is a force of nature and will likely attract dev talent to the blockchain. Cautious optimism is warranted.