Part 2 of my deep dive research series will be on FANTOM.
Can Andre’s return and a number of bullish catalysts propel $FTM to its former DeFi glory??
The purpose of this deep dive series is to analyse a number of popular projects and rank them against a set framework. I outline my DYOR framework below.
As I complete each project, I will update and track scores on my google sheet. You can view for free below.
https://docs.google.com/spreadsheets/d/1mPGbrsSEqBCN4lTVIIfdu3UzhZVqGP6LWMXlJrWJ5RE/edit?usp=sharing
Let’s dive in…..
As of 23 Dec 2022
Price = $0.20
Market cap = $520m – Rank 65
Proof of Stake
All time high = $3.46 (-94%)
All time low= $0.002 (+10,661%)
Fantom was one of the stars of DEFI summer 2021. It captured the attention of many defi degens and peaked at $8b TVL (Mar 2022). Due to it's low fees and fast transactions, there was a thriving ecosystem of innovative projects and communities being developed.
Then a series of unfortunate events led to it being decimated during 2022 (down 95%).
Andre quits
Daniele Sesta Saga
Solidly failure
Bear market blues
However, many of these bearish headwinds had nothing to do with the overall project and its fundamental technology. A lot were due to people involved in the project and association with the Wonderland/ Daniele Sesta saga and general risk off macro environment.
Recently, we have seen @AndreCronjeTech officially return to the project and a number of other bullish developments.
Andre return
30-year runway
FVM
dApp gas monetization program
Great summary thread from @TheDeFinvestor below.
So does $FTM still have upside potential for the next bull market? Let's find out...
Revenue
Revenue and Fees have been in a downtrend since the start of 2022. They do seem to be stabilising and FTM comes in at 12th amongst blockchains for 30d revenues.
When looking at the P/S ratio (Fully diluted Mcap / annualised revenue) Fantom comes in as the 5th most undervalued blockchain. Lower the P/S ratio the better.
Scoring a 7 for revenue.
Treasury
Andre released a Medium article on Nov 28 detailing the financial history of Fantom. Worth a read- link below.
TLDR is – as of Nov 2022 Fantom Treasury contains
Over 450m FTM = $90m USD
> $100m in stables
> $100m in crypto assets
$50m in non-crypto assets
TOTAL = $340m
With a current salary burn rate of $7,000,000 / year, that gives FTM 30 years of runway without having to touch FTM. Pretty impressive.
Scoring a 9 for Treasury.
Tokenomics
According to coingecko, these are the current supply stats
Circulating supply = 2.54b
Total supply = 3.175b
Market cap = $520m
FDV = $650m
Market cap/ FDV = 0.8
Fantom foundation has recently proposed to reduce the burn rate of gas fees from 20% to 5%. With the 15% redirected to dApps building on Fantom. This is called the “dApp gas monetization program” and should attract developers to the chain.
Scoring 8.5 for Tokenomics.
Locked up funds
The current circulating supply is 2.54b. Total supply of FTM is capped at 3.175b, meaning that approx. 80% of tokens are already in circulation. Tokens distributed to early investors have all unlocked- meaning reduced risk of institutions dumping.
The only tokens left to be created are for block rewards for validators and delegators. These tokens will be distributed continously until April 2024 when all staking rewards will be stopped.
Staking FTM helps secure the network and you can currently earn between 1.8 – 6% APY. Depending on how long you choose to lock up your tokens.
Scoring 8 for locked up funds.
Use case
Fantom is a novel Layer 1 project designed for scalability and low-cost transactions. It’s native token $FTM is used to
Pay for transactions,
Execute smart contracts,
Secure network through PoS
Vote in governance
There is also a thriving DeFi ecosystem built on Fantom including Dexes, Yield aggregators and Lending programs. The fact that so many innovative projects have built on Fantom is a good sign- including Spooky Swap, Beethoven x, Beefy, Yearn Finance, Qi Dao and many others.
While the TVL chart is not pretty, I expect this will bounce back when macro conditions improve.
Amongst other blockchains, Fantom comes in at 7th for daily active users- around 55k. As you can see below, while fees/ revenues are down from ATHs, daily active users have actually been trending up since October.
Scoring 9 for Use case.
Roadmap
The main focus for 2023 seems to be on developing and implementing the Fantom Virtual Machine- FVM. As outlined in a recent AMA with Simone Pomposi (CMO). If you want to learn more about the proposed FVM, check out this thread from @Fantom_Intern
Gitcoin voting is also now open until Jan 2 2023. You can vote for your favourite Fantom project and this will help them get a share of matched funds. This will be based on the quadratic funding idea coined by Vitalik.
Scoring an 8 for Roadmap.
Team/ funding
There is a perception that Fantom’s success relies solely on Andre's presence. However, FTM has shown this year that they can continue to build while he took a break from crypto.
Andre has recently announced that he is back in the fold and this is a massive boost for the team as he is one of the leading devs in the space. I think now the team is robust enough for the 'Andre risk' to be significantly reduced going forward.
There were 4 main funding rounds that took place in 2018. Investors included 8Decimal Capital, Alameda, Arrington XRP, Block Tower, Obsidian Capital amongst many others. Fantom also have a range of diverse partnerships, integrations and associations with companies and gov.
Some notables include
Chainlink
Band Protocol
The Graph
RenBride
Nansen
Crypto.com
Travala
Ethereum Classic
Pakistan Education & Prisons
Tajikistan Ministry of Industry
Royal Star Pharma
Scoring an 8.5 for Team/ funding.
Summary
TLDR for each category's score out of 10.
7 Revenue – Well down from ATHs but good P/S value
9 Treasury– 30 yr runway, diversified
8.5 Tokenomics – Fixed supply, concerns around end of staking rewards 2024
8 Locked up funds – 80% tokens in circulation
9 Use case – TVL concerns but thriving DeFi eco
8 Road map – Building FVM, strong developement
8.5 Team/ funding – Strong team and diverse partnerships
TOTAL- Fantom gets an 8.2 weighted average score
Overall, I am impressed with how the Fantom team have been able to continue building in this bear market and through numerous controversies in 2022. Andre is back, Treasury is in good shape and there are some exciting developements in 2023.
My only concern is that competition in the Layer 1 space is fierce, and Layer 2 scaling solutions (Optimism, Arbitrum) are quickly eating into this market share. FTM definitely stays on my watchlist for 2023.
The purpose of this thread is for education and research, not investment or financial advice. The current macro conditions are still very choppy with the risk of recession in 2023 and a tightening Fed so please be cautious out there frens.
If you enjoyed this thread, here are some great accounts to follow for FTM alpha.
Appendix- useful links
https://fantom.foundation/
https://fantom.foundation/blog/
https://ftmscan.com/