What’s driving Fantom to be the 5th most significant contributor to TVL in DeFi
The recently integrated Fantom blockchain is the fifth most significant contributor to the total value locked (TVL) in DeFi right now. Of the full $220 billion TVL, Fantom accounts for around $9 billion. Vitally, when it comes to TVL, Fantom is ahead of perhaps more well-known networks like Polygon, Solana, and Tron.
As a network holding around 5% of the total value locked in DeFi, it is no surprise the majority of the dapps running on Fantom right now sit in the DeFi category. Perhaps that’s why many people are not aware of Fantom as the industry right now puts focus on NFTs and GameFi offerings. However, it’s worth diving into the Fantom dapp ecosystem to discover which dapps are driving the lion’s share of this TVL and user activity. Additionally, we can see if other categories are starting to show positive growth signals.
Why Fantom?
Without going into full detail about the architecture and technology behind Fantom, it’s essential to understand the top-line info about Fantom and why it has become such a strong referent for DeFi dapps.
- Scalability: Fantom can process thousands of transactions per second and scale to hundreds of nodes.
- Speed: Fantom’s transaction speed is 1 second on average.
- Security: According to the developers, Lachesis provides institutional protection. It also offers absolute validity, meaning that transactions can never be reversed. Fantom is leaderless. As a result, security does not depend on a small group of actors.
- Support for Smart Contracts: Fantom is fully compatible with Ethereum. Developers can create and use EVM-compatible smart contracts just like on Ethereum.
FTM is the native token of the Fantom network. It is used in various scenarios: to pay for fees when deploying projects, to be staked, and for governance.
Fantom as a DeFi network
Instantly we see that nine of the top 10 dapps on Fantom ranked by unique active wallets over the last 30 days reside in the DeFi and Exchange categories. While NFTKEY, a multichain NFT marketplace, has started to find traction on Fantom. Interestingly, upon closer inspection, we see that Knights of Fantom, a dapp in the DeFi category, displays all the characteristics of a GameFi dapp that blends gaming and finance mechanics to provide an easy on-ramp Fantom and crypto.
We have seen dapps such as DeFi Kingdoms on Harmony and Crabada on Avalanche achieve very positive results with these sorts of offers, so it will be interesting to see if Knights of Fantom can attract similar interest. Moreover, it will be interesting to see if those aforementioned GameFi dapps launch on Fantom in the future and provide strength to the GameFi category and competition to Knights of Fantom.
Who is generating all the value?
With almost 200,000 active wallets connecting to SpookySwap in the last 30 days, it is the clear leader on Fantom. However, Multichain, a Cross-Chain Router Protocol is currently not tracked by DappRadar. It allows users to swap tokens between different blockchains using a bridge. According to their official website, the protocol supports 30 other chains and over 1,389 additional tokens. Due to its functionality, Multichain holds over $5 billion of the total $8.8 in Fantom DeFi.
Atop the DappRadar rankings pile, we see SpookySwap with a very commanding position, having attracted more than 197,000 unique active wallets in the last 30-days. Over the same time frame, that’s more than Uniswap V2 and V3, respectively. It was pipped only by the Polygon exchange QuickSwap. Additionally, more than $1.36 billion, or around 20% of the total $8.8 TVL in Fantom, comes through SpookySwap. More importantly, with over 500 billion dollars in trading volume flowing through the protocol, SpookySwap is becoming a formidable player in the DeFi space.
What is SpookySwap?
SpookySwap is an automated market-making (AMM) decentralized exchange (DEX) on Fantom with the BOO token as its governance token. In April 2021, the platform featured token swaps, farms, grants to encourage other Fantom projects, and user-centered services. One reason for its growth is that users can easily bridge assets over from Binance Smart Chain and Ethereum. It enabled them to bring their current crypto holdings over to Fantom and start trading at much lower costs than Ethereum.
The BOO token has performed well over the last 30 days, rising 10.8% to around $24 at writing. Of course, it was affected by the recent pullback from BTC and ETH but appeared to be in recovery.
The best of the rest
Sitting below SpookySwap, we see four leading players in the DeFi category. Geist, Scream, WigoSwap, and Curve. The first three operate exclusively from Fantom right now, but Curve is a multichain Ethereum dapp that’s spread its wings to Avalanche, Polygon, and Fantom.
Curve is performing well on Fantom as traders utilize its fast transactions, bridge tech, and cheap fees. Active wallets have increased over 76% month over month, while trading volume in the last 30 days is more than $615 million.
Geist, Scream, and WigoSwap all offer users a similar proposition. Geist is focused on liquidity provision, farming, and staking. The platform provides users an easy way to earn on their holdings of FTM and other select tokens. Scream is similar to and based on existing lending platforms like Compound Finance, Aave, and C.R.E.A.M. Finance. Users can lend any supported assets and use their capital as collateral to borrow supported assets.
WigoSwap is slightly different in that it offers users an Automated Market Maker (AMM) alongside yield farming and a native NFT marketplace. The platform can also facilitate token swaps, staking, farming, and trading NFTs. Additionally, users can gain free tokens on WigoSwap by staking WIGO.
Fantom summary
If Fantom continues to differentiate itself with intelligent partnerships and further technological innovations, it could become a significant player. While Fantom provides a very similar service to its users, it incorporates unique technology that makes it more efficient.
However, Ethereum plans to unveil ETH 2.0 in 2022, transitioning its structure to Proof-of-Stake. This switch could render Fantom and other blockchains finding a competitive advantage on fees and speed much less valuable in the future. Even if there are some significant differentiators from a technical point of view, Ethereum still stands as the most significant blockchain holding more than $123 billion in total value locked.
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The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds ETH, BTC, AGIX, HEX, LINK, GRT, CRO, OMI, IMMUTABLE X, GALA, AVASTR, GMEE, CUBE, RADAR, FLOW, FTM, BNB, SPS, WRLD, ATOM, and ADA.
