Analyzing Fantom's Growth & Recent Price Rise: IntoTheBlock

Analyzing Fantom's Growth & Recent Price Rise: IntoTheBlock

2 years ago

Leveraging blockchain’s public nature, IntoTheBlock’s machine learning algorithms extract key data that provide a deeper dive into the major developments in the industry.

Analyzing Fantom's Growth & Recent Price Rise: IntoTheBlock

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IntoTheBlock brings you on-chain analysis of top news stories in the crypto space.

Analyzing Fantom's Growth & Recent Price Rise

This week, we cover Fantom’s recent progress and some of the upcoming challenges that the team may face or will want to keep an eye out for. With over 80 DApps already deployed on Fantom’s Opera chain, the FTM token neared the $3 level mark during this week's trading, a level which hadn’t been seen since October 2021. This price — reflected on some of IntoTheBlock's indicators — showed some positive signs.

Leaving the FTM token aside, the Fantom blockchain gained some traction as well, breaking the $6 billion mark in total value locked (TVL) and positioning itself as the sixth largest among the smart contract platforms by TVL.

With its growing popularity, it is worth having a look at some informative indicators of the current Fantom token holders.

For any address with a balance of tokens, IntoTheBlock identifies the average price (cost) at which those tokens were purchased and compares its current price. If the current price is greater than average cost, the address is “In the Money.” If the current price is less than the average cost, the address is “Out of the Money.”

As of Jan. 6, 2022 via IntoTheBlock’s FTM Analytics

As FTM closed on the $3 mark, IntoTheBlock’s indicator shows that 87.23% of the addresses are currently “In The Money,” meaning they are profiting on paper. In addition, it means that there was great amounts of activity between the range of $2.26 to $2.63. This stands as a sign of support, since 6.99K addresses traded around this price with an approximate of 252.85M FTM in volume. Having 87% of the addresses at profit also stands as a positive sign, since most of these addresses will not be seen into a position of pressure selling.
In addition, another interesting trend behind the momentum in Fantom is the growth in mid-term and long-term holders: this is reflected in IntoTheBlock’s cruisers and hodlers indicators.

As of Jan. 5, 2022 via IntoTheBlock’s FTM Analytics

Not only are these holders profiting, but more and more are in it for the long term, as the number of addresses with a holding period greater than one year continues to increase month after month. These are the group of holders that usually represent the true believers in the protocol and the ones that will be willing to hold the ups and downs of the token. Since they are in it for the vision of the project, they will take greater risks. But putting vision aside, it's also worth mentioning that this group of holders have benefited by over an 11,000% increase of FTM’s token value over the span of one year.

Furthermore, one important indicator that highlights the overview of the current state of the FTM token holders is the ownership distribution by time held. This indicator groups the token holders based on how long their addresses have held the token. Hodlers are passive investors that have held the asset for more than one year, as described on the top indicator. Cruisers have a holding period of one to 12 months, while traders hold the asset for less than 30 days.

As of Jan. 5, 2022 via IntoTheBlock’s FTM Analytics

The indicator depicts a small percentage of traders, making up around 19% of the total holders. In addition, this group has been declining its share of ownership since October of 2021, where it had a more significant stake of 31% — in this case, standing as a positive sign for future growth, since the cruisers and the hodlers represent a more stable and conservative type of group. Furthermore, the cruisers category has experienced impressive growth since the month of October 2021, which reinforces the theory of more consistent adoption.

Finally, another key indicator to keep into account is adoption on the Fantom chain, i.e. the total value locked on the Fantom, Polygon and Avalanche chains.

As of Jan. 5, source: DeFi Llama, IntoTheBlock. *The graph is using algorithmic scale.

It's clear by analyzing the graph how the Fantom chain went through a massive period of liquidity inflow during the beginning of 2021’s fourth quarter. This came in relation to the incentive program offered by the chain in order to promote migration.

The graph above compares the Fantom chain with the Polygon and Avalanche chains, both of which offered similar incentive programs. The difference is that each chain stands in a different stage in regards to their program's time frame.

One of the first chains to pioneer with this type of migration incentive was the Polygon chain, which currently holds a TVL of around $5.15 billion, but had an all time TVL high of $10.5 billion. After the incentives program, ended the chain experienced some decrease in TVL. The program seemed to have worked in part, since before the start the chain had $300 million as TVL. The Fantom and the Avalanche chains are at similar stages in regards to the incentives program, as both recently experienced a massive influx of liquidity due to their incentives — but both need to prepare in order for when the programs are over. They are going to have to continue to offer attractive services in order to retain liquidity and avoid users from migrating elsewhere.

The FTM token and the Fantom chain both are experiencing great traction, due to their work on the layer 2 platforms sector. The protocol will soon stand at a crucial point in which it will need to find new ways to attract and keep the incoming liquidity,  considering that the incentives program will end and that it will also face competition from rising chains wanting to gain liquidity. Keeping this in mind, the renowned DeFi developer Andre Cronje, founder of Yearn Finance, is planning to launch a new project on Fantom with the collaboration of Daniele Sestagalli of the Abracadabra, Wonderland and Popsicle projects.
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