Fantom of the Crypto Ecosystem: Peeking Behind the Curtain

Key Insights

• Fantom launched during the ICO boom of 2018. The protocol was quiet for a few years as it built out its technology stack, before picking up momentum throughout 2021 and into 2022 as it focused on DeFi.
• The project’s technology could fundamentally improve existing methods. Fantom attempts to solve the blockchain trilemma by utilizing a directed acyclic graph (DAG) structure for its nodes which enables higher throughput for the protocol.
• While TVL grew impressively in 2021 and early 2022, the departure of key contributor Andre Cronje coincided with a sharp drop in TVL and a daily new address. Developer activity and transaction volume have also declined.
• Fundamental metrics like revenue, price to sales, and TVL to market cap remain strong relative to peers, but it remains to be seen if these metrics were driven in large part by Andre’s influence.
• Even before Andre left, the spiking transaction costs during periods of high activity were a potential red flag to scaling the network.
• Overall, the protocol has some great things going for it, but the ghost of Andre looms large, making it a speculative investment at this time.