Fantom is a directed acyclic graph (DAG) smart contract platform that provides DeFi services to developers. Fantom’s native cryptocurrency is FTM, which is used to pay for transactions on the Fantom blockchain.
Fantom experienced significant price growth in 2021, with FTM surging from around $0.2 at the start of 2021 to an all-time high of $3.46 in October 2021. However, Fantom’s price has since pulled back sharply, falling to around $0.4 at the time of writing.
So will Fantom go up again in the future? There are several key factors to consider when determining Fantom’s future price potential.
Fantom’s technology and development activity
As a layer 1 blockchain focused on speed, scalability and low transaction costs, Fantom aims to be a leading platform for DeFi, NFTs, dApps and digital payments.
Fantom uses a DAG architecture and Lachesis consensus algorithm to achieve high transaction speeds of 1-2 seconds and low fees of just a few cents per transaction. This makes Fantom well suited for DeFi applications, NFT minting/trading, and real-world payments.
Fantom saw rapid growth in development activity and user adoption in 2021. Key milestones included:
– Over 50 DeFi protocols launched on Fantom, with more than $6 billion TVL locked across DeFi apps at Fantom’s peak in October 2021.
– Major NFT marketplaces like Artion and NFTkey launched on Fantom.
– Stablecoin USDC was deployed on Fantom, enabling enhanced DeFi functionality.
– Number of unique wallet addresses on Fantom grew from around 150,000 in January 2021 to over 2.5 million by October 2021.
– High profile projects like Hyperverse and Umbria partnered with Fantom Foundation to build on Fantom.
As long as Fantom continues innovating and expanding its DeFi and NFT ecosystems, this will support increasing use and demand for FTM. Fantom’s technology that facilitates fast, cheap transactions remains a key competitive advantage.
Adoption by developers and users
As a relatively new smart contract platform established in 2018, Fantom still has significant room to grow in terms of developer and user adoption.
Increasing usage and transactions on Fantom’s network would drive further demand for FTM, as more FTM would be needed to pay for gas fees. Wider adoption could also generate network effects that reinforce Fantom’s value and visibility within the overall blockchain ecosystem.
Upcoming development milestones that could boost adoption if successfully delivered include:
– Further enhancements to Fantom’s EVM compatibility for seamless onboarding of developers from Ethereum.
– Launch of interoperability solutions and bridges that connect Fantom with other major blockchains.
– Onboarding of major institutional partners and DeFi/NFT projects not currently using Fantom.
– Growth of Fantom-based stablecoins and tokenized real-world assets to expand DeFi capabilities.
– Geographic expansion beyond Fantom’s currently concentrated base of developers/users in Europe, South Korea and SE Asia.
As adoption grows, FTM demand would likely grow as well. This network effect makes broadening Fantom’s user base a key priority.
Use cases driving FTM demand
FTM has a wide range of use cases that drive demand for the token. As adoption of these use cases grows, natural demand for FTM can be expected to increase as well. Key current and emerging use cases include:
– Gas fees – FTM is used to pay for transaction fees on the Fantom blockchain. More transactions = more fees paid in FTM.
– Staking – FTM can be staked to earn returns (~4% currently) and help secure the Fantom network via validator nodes. The more FTM staked, the greater the demand.
– Lending – FTM is used as collateral for borrowing in DeFi lending markets like Geist Finance. Rising lending activity creates FTM demand.
– Payments – Services like AnyPay allow online merchants to accept FTM as payment. More merchants accepting FTM increases its utility.
– NFTs – FTM is the native token for NFT marketplaces on Fantom like Artion, increasing its exposure and use for NFT traders.
– DeFi – FTM is used for yield farming and governance in Fantom-based DeFi protocols. Rising DeFi adoption entails more FTM locked in apps.
As these use cases expand, they support an increasing baseline level of FTM demand that provides upward price pressure.
FTM tokenomics
Fantom has a maximum supply of 3.175 billion FTM. Currently ~2.5 billion FTM are in circulation, meaning there are still ~600 million FTM (20% of max supply) yet to be released.
New FTM is minted with each block as block rewards for validators. The current annual inflation rate is around 2.3%.
Importantly, while there is still a substantial amount of FTM left to enter circulation, the inflation rate is low enough that new FTM being minted is unlikely to significantly dilute the value of existing FTM.
Well managed tokenomics with a capped supply and low inflation provides long-term scarcity that supports rising FTM prices, as long as demand for the token continues growing.
FTM price catalysts
In addition to the fundamental drivers of FTM demand discussed above, there are also likely to be various catalysts that could trigger price spikes in the shorter term. These include:
– Major exchange listings – Being added to new top exchanges like Coinbase would quickly increase FTM accessibility and trading activity. Binance listing FTM in 2021 catalyzed FTM’s rapid rise.
– DeFi and NFT product launches – High profile, innovative DeFi or NFT projects building on Fantom and using FTM could attract attention and users to Fantom and FTM more broadly.
– Partnerships – Strategic partnerships with major blockchain players, gaming companies, enterprises etc could rapidly expand Fantom’s visibility, adoption and utility.
– Market sentiment shifts – FTM benefits from renewed bullish sentiment and flows back into altcoins, as happened in early-mid 2021. A rising tide lifts all boats.
– Meme trend – FTM has the right profile to become a “memecoin” if it gains viral interest and publicity among retail traders, as Dogecoin and Shiba Inu have. This could produce a short-term price frenzy.
Market outlook for cryptocurrencies
The overall crypto market outlook impacts Fantom’s price potential, since FTM does not trade independently of broader market sentiment. Currently the crypto market remains in a downturn as part of a likely longer-term bearish/bottoming phase.
However, once the market eventually turns and enters a new bull cycle, most cryptocurrencies are likely to benefit – including Fantom if it continues delivering on its technological roadmap and expanding adoption as covered earlier.
History shows cryptos can experience powerful bull runs after deep bear markets. This includes altcoins like FTM with strong fundamentals. As the macro environment shifts back towards risk-on appetite, FTM could ride a rising tide alongside Bitcoin and Ethereum. Market cycles play out over multi-year time horizons.
Conclusion
In summary, Fantom’s strong technology, active development community, growing list of use cases and positioning as a leading smart contract platform all suggest significant long term upside potential.
However near term price upside depends heavily on broader crypto market conditions improving. As the bear market persists, further downside for FTM remains possible and even likely.
But once the crypto market eventually enters a new bull cycle, FTM looks well positioned fundamentally to experience another major price growth wave. Specific catalysts like exchange listings or high profile DeFi/NFT launches could turbocharge short term upside as well.
Patient holders could do very well with FTM over a multi-year investment horizon. But expectations should remain muted in the nearer term until crypto market sentiment improves.
Key Takeaways
– Fantom offers fast, cheap DeFi transactions with its high performance DAG architecture, giving it a strong technology edge.
– Developer and user adoption is expanding but remains relatively limited, leaving large growth potential.
– Use cases like gas fees, staking, lending, NFTs and DeFi continue growing, supporting FTM demand.
– Well designed tokenomics with low inflation provide long term scarcity.
– Listings, launches, partnerships and meme potential offer short term catalysts.
– Macro environment needs to turn bullish again to unlock Fantom’s full upside.