Recent surge in Fantom coin price, what’s behind the rally?
Arslan Butt • 3 min read
The FTM/USD closed at $1.6077, after placing a high of $1.6170, and a low of $1.2929. The Fantom prices have surged about 500% in the past six weeks, and chances are that the rally could extend further, with the launch of a new $320 million incentive program. In this update, we will learn about the surge in the Fantom coin price, and what’s behind the rally.
In August, one project that gained much traction was Fantom (FTM), a layer-one smart contract platform that utilizes a directed acyclic graph architecture to solve the problems of slow transaction speeds and high transaction fees.
With the increased popularity of decentralized finance networks, the platforms offering more efficient services than the highly expensive and most widely used Ethereum platform, have been getting more and more traction lately. Fantom network has also seen a surge in utilization, as it offers 1-second transactions and charges near-zero fees. These features have been making Fantom a favorite platform among developers who are committed to building innovative and robust DeFi protocols to attract value.
What’s behind the rally in the Fantom coin price?
There are many reasons behind the rally in the Fantom coin price, and the most influential ones are listed below:
1. Fantom has introduced a liquidity incentive program.
On Monday, Fantom announced a 370 million FTM incentive program for builders, worth $320 million, which is designed to attract new protocols and liquidity to the Fantom ecosystem. The program will reward the developers of the Fantom Foundation. Depending on the total value locked in the protocol in question, they will receive between one and five million FTM.
The rewards can only be qualified if the protocol maintains a TVL above a time-weighted average (TWA) of $5,000,000 or $100,000,000 for an extended period. If the TWA falls below the minimum of $5,000,000 at any point, reward distribution will be paused until the TVL rises above the minimum requirement again.
2. Increased social media participation
Fantom has significantly increased its social media metrics, including mentions, social media engagements and average daily social contributions. Social media metrics provide an insight into the on-the-ground adoption of a crypto project, along with the interests of the average cryptocurrency investor.
The data from LunarCrush shows that Fantom saw an impressive increase in social media metrics in August, by over 34.08%, with 67,305 mentions. Additionally, the community also showed a steady increase in the social media engagement rate, at 96% in the month of August. According to on-chain data, Fantom has about 677,430 unique addresses that regularly complete more than 1.5 million transactions a day.
One of the major factors that drove a rise in engagement in the network included the bridge to the widely used Ethereum network. It enabled many NFT projects to migrate to the Fantom network, in order to take advantage of its low costs and speed.
The launch of multiple decentralized finance protocols on the network, such as SpiritSwap, SpookySwap and the multi-chain, stablecoin-focused automated market maker, Curve, has also been a significant factor in pushing the growth of Fantom.
3. Significant Improvements in DeFi
The increasing total value locked (TVL) of its DeFi ecosystem has also played a major role in driving the growth of the Fantom network. According to DefiLlama, the total value locked on the Fantom blockchain has now reached $3.25 billion, with a 35.59% upward change in 24 hours.
The main contributor to Fantom TVL is AnySwap, which brought in about $1.61 billion and dominated the other projects with a 49.47% contribution to the total TVL of Fantom. Since August, when the Fantom Incentive program was launched, the network has seen a significant rally in the TVL.
The significant gains in the DeFi ecosystem and the increasing interest in the incentives by developers, have pushed prices of FTM/USD higher in the market.
4. Inauguration of the Commission-free NFT Marketplace
In September, the Fantom Foundation announced the launch of its muc-anticipated NFT platform and marketplace, Artion.io. It offers 1-second transaction finality and low transaction fees. This platform makes the transaction fees at Fantom near zero and allows a sleek user interface that does not require any coding knowledge. Furthermore, the user experience has become highly accessible with the launch of Artion.
The number of NFT projects on Fantom has been rising rapidly since the launch of the NFT marketplace. Collectible NFT projects, like Ancestral Umans, FantomRock, Degen Apes and StrangeBrew, were sold out within 20 minutes after their release. About 3,000 NFTS of Ancestral Umans on Fantom were sold out within 1 hour of the launch, resulting in over a million dollars in revenue.
5. Tajikistan has joined forces with the Fantom Foundation.
In late September, one of the largest banks in Tajikistan enlisted the Fantom Foundation to develop a central bank digital currency (CBDC) that is expected to be deployed throughout the central Asian country. Moreover, the Fantom Foundation has announced that it has signed an MoU with the OJSC Orientbank. Thus, it has become one of the first blockchain projects globally to develop a CBDC solution for a national government.
Fantom and Orientbank will join the National bank of Tajikistan to develop and run trials of the commercial and retail payment networks for a digitized version of Tajikistan’s currency, the somoni (E-SOM).