The “Ghost Chain” That is Anything But a Ghost
There’s a blockchain that almost no one seems to be talking about, yet its footprint is omnipresent within the cryptocurrency space. With Ethereum’s DeFi supremacy on a steady decline since February 2021, alternative blockchains like Solana, Avalanche, and Terra blew up in 2021. This “ghost chain” is massively undervalued yet still goes toe-to-toe with those popular chains. If anything, you’ve seen the name but for whatever reason it never blipped on your radar. Well now here’s your sign to take the deep dive into this “ghost chain” called Fantom.
Fantom is an alternative to Ethereum that was built to overcome the blockchain trilemma; namely decentralization, security, and scalability. Launched in December 2019 with it’s DAG (Directed Acyclic Graphs) based Lachesis aBFT (Asynchronous Byzantine Fault Tolerant) consensus mechanism, Fantom can easily overcome the scalability issue without sacrificing decentralization or security.
Fantom is a high-performing, scalable, and secure smart contract platform that processes over 20,000 transactions per second. It is EVM compatible so Ethereum DApps can be transferred easily to the Fantom network. Helloooo Metamask compatibility!
But we’re not here to get wrapped up in the technical details, which has been explained ad nauseam in articles and on twitter. We’re here to answer the question as to why $FTM could (and probably will) rise up alongside the likes of $SOL, $AVAX, and $LUNA.
Market cap growth for $SOL, $LUNA, and $AVAX has been wild in 2021, but know who else experienced similar growth? Fantom. Yet it’s still priced at the $2 range, whereas the others have hit the $100 range.
With that in mind, let’s take a look at some metrics.
Time-to-finality: The time it takes for a transaction to process and finalize, is consistently less than a second.
Transactions per second: Remember the 20,000 tps mentioned before? Here’s a list of tps from other chains (approx).
$SOL — 65,000
$AVAX — 4,500
$DOT — 1,500
$VISA — 1,400
$ETH — 30
$BTC — 7
Gas fees: Cheaper than $AVAX. It beats other blockchains but as someone who fell in love with Avalanche (still in love with them), this was a major factor for me. Avalanche gas fees are sweet, but seeing $1 — $7 when knowing Fantom has it cheaper at .05–2 cents, it makes me lean towards $FTM more and more as time goes on.
Total Value Locked: Fantom currently ranks 6th in TVL with ETH, LUNA, BSC, AVAX, and SOL above at the 1st — 5th place. The $FTM market cap is only 7.1B, yet it’s TVL is at 5.86B. That’s an insane 82.5% of it’s supply locked into DeFi protocols. If you look at Fantom’s Mcap/TVL ratio (lower number is better), it’s sitting at 1.22. Terra is at 1.54, Binance is 4.56, Avalanche is 2.00, and Solana is 4.31. Remember, Fantom is still only a mid-cap and it’s beating out those large-cap chains in TVL metrics.
DeFi: Since I’ve dived into the black hole of DeFi research, I’ve always found myself back on Fantom DApps due to the insane APYs you come across on their DeFi protocols. My personal favorites at the moment are Tomb Finance and Reaper Farm. To keep it short, $TOMB is a token pegged to $FTM that makes it money via seigniorage (Hi Harry Yeh!). Reaper.farm is a protocol that auto-compounds farms for you, and it has the Tomb Finance farms giving juicy APYs that range from 800% — 1000% and at one point, 10,000%.
Adoption: Has more daily transactions than $ADA, more DApps (110) than $SOL (48) & $LUNA (16) while being just below $AVAX (131), and more social followers than $LUNA.
Growth of Monthly Developers: In 2021, Fantom grew in number of developers by 389%. They beat out Solana (385%), Terra (305%), and Avalanche (235%). With this growth, it’s possible for the number of Fantom DApps to overtake Avalanche DApps in 2022. More developers > more DApps > more DeFi Protocols > higher TVL > $FTM price increases.
Community: Often you see constant bickering on crypto twitter about which blockchain is better and even arguments within the same ecosystem about which protocol is superior. Yet with the Fantom community everyone is positive and supportive of each other, which is refreshing to see. A recent example, an auto-compounding protocol called Grim Finance was hacked and lost $30 million. Generally when a hack happens, protocols tend to fail and shut down since it’s incredibly difficult to bounce back from something like that. But amazingly the Fantom community came together for Grim Finance and donated from their wallets and treasuries to make that $30 million back. Grim is still rebuilding as of now but everyday that passes, they’re looking more alive than ever.
Frog Nation: Lately with Daniele Sestagalli shifting his focus to $FTM, bullish signs are stronger than ever. (If you’re unaware of who he is please pause reading this article, pull up wonderland.money, and watch some of his interviews.) With the success of Wonderland, Abracadabra Money, and Popsicle Finance, Dani has consistently made the haters eat their own words. As he likes to put it, “Suits and Bears, get fucked”. The ecosystem that he has built with the protocols working together in tandem to create wealth generating tools for the everyday person has no doubt created a more promising future for DeFi. So given the metrics mentioned above and Dani’s recent moves, anyone would be hard-pressed to say that Fantom won’t have a successful 2022. UPDATE: Well this didn’t age well…
Now to be clear, this article isn’t meant to trash the other blockchains. Investments in all of them have potential to continue to rise in value. WAGMI. Considering Ethereum’s dominance in DeFi declining steadily, there’s plenty of cash flow for all these blockchains to continue succeeding.
Once you look past the valuation you see that Fantom has a strong foundation for future growth. Whether you’re a hodler or a trader, that $2 pricing is no doubt making you rethink your portfolio strategy. If its’ counterparts are already valued at the $100 range, it’s not much of a stretch to say that Fantom will find itself there in the near future. Even more so if Fantom maintains its’ TVL ratio as its’ market cap grows, it has serious potential to be priced higher than its’ counterparts at the same market caps.
Furthermore with their impressive list of DeFi protocols growing, passive income opportunities are popping up left and right. As the Fantom DeFi ecosystem grows, so too will the protocols become increasingly intertwined with each other. Wrap all of that up with the positive and optimistic community, it just makes this so-called ‘ghost chain’ increasingly undeniable.
This is, of course, not financial advice ;)