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Fantom of the Opera - Issue #41
In this newsletter, we are profiling Fantom [FTM]. In previous newsletters, we have profiled Bitcoin, Cardano, Stablecoins, Uniswap and many others. Access all our newsletters in our archives at madcapx.substack.com.
The Short of It
There are so many cryptos that are competing against Ethereum you have to wonder if one will take it down or will the space have multiple competing for years to come. Fantom definitely could be a contender even if its market cap is at the bottom of the top 100 digital assets.
Fantom was founded in 2018 by computer scientist Dr. Ahn Byung Ik, with its mainnet being launched in 2019. The goal of this cryptocurrency is to provide a smart-contract platform that has fast transaction times as well as offering decentralized financial services. They have the FTM token, which is used for transactions, fees, staking rewards and governance and resides on the Ethereum, Binance, and Fantom chains. The ecosystem is overseen and managed by the Fantom Foundation, with CEO Michael Kong.
The Fantom chain, called “Opera,” is a Directed Acyclic Graph (DAG) rather than a blockchain. It uses something called “Lachesis” for consensus, which is essentially a leaderless Proof-of-Stake technology. It features a finality time of only 1 second and can currently handle up to 4,500 transactions per second. Initially, they promised up to 300,000 TPS, but this is yet to be implemented (if it’s even possible). There is a maximum supply of 3.175 billion FTM across all the chains it exists on.
Fantom currently has only around 48 main validator nodes, which is seen by some as not being the most decentralized. Running a validator node today requires you to stake 1 million FTM and have quite hefty hardware. Slashing is used to dissuade node operators from acting maliciously, with the possibility of up to 100% of the stake being lost. Instead of running a node, most people will choose to just delegate to one of the existing nodes as this requires only a minimum of 1 FTM. Staking consists of locking in for a time period of up to a maximum of 365 days. There is a 7-day wait during unbonding (or unlocking) from staking. All staking requirements and rewards can be changed via governance. Fantom features on-chain governance where voting is done via a 1 to 4 agreeability rating scale, and 60% or better is needed for a change to be approved.
A product called the Fantom Bridge can be used to transfer tokens from one chain to another. Their own exchange system called “Fantom Finance” features the ability to trade almost 200 coins and tokens that are natively wrapped (for example, fUSD, fBTC, fETH, etc…) while having 0% slippage.
Fantom is currently fully Ethereum Virtual Machine (EVM) compatible, while they are still working on their own native smart-contract system (FVM). All the code that goes into the ecosystem is peer-reviewed by third-party industry experts, similar to Cardano.
Fantom integrates Chainlink and Band Protocol for oracles as well as The Graph for indexing and network queries. Check out their list of partners at https://fantom.foundation/partners/. Another area that the Fantom team is making great headway into is Central Bank Digital Currencies (CBDC). They are in talks with multiple nations such as Afghanistan, Pakistan, and Tajikistan.
Overall, Fantom is another ambitious competitor to Ethereum, amongst the likes of Avalanche, Polygon and others. With so many attempting to enter the same space, it is unknown who will eventually overtake the others or if each can find and thrive in their own unique niche.
First, let’s look at the FTM/BTC pairing on a weekly scale. From late 2018 to early 2021, FTM has been ranging between 47 Satoshi to about 400. Once the altcoin season started, we saw FTM takeoff for a 3859% gain. Those gains vanished within a few weeks, and now it is a little over 600 Satoshi.
The next chart below has FTM/BTC on the daily showing the bear trend over the last couple of months. Bitcoin is bullish once again. Will FTM also turn bullish similar to early 2021? Watch for a full-day candle to break above the top resistance line for a possible breakout.
On this next chart, FTM is paired against USD. We can clearly see that it is still within the downward trendlines similar to FTM/BTC charts. Look for a break above the top resistance trendline. If it breaks, then we would be looking for the $0.32 previous higher peak to be broken. If the resistance line bounces down, the bottom is 57% further in the red. So pay attention when trading and manage your risk.
DigitalCoinPrice.com predicts the price of Fantom to be at $0.43 in 2021, $0.48 in 2022, $0.56 in 2023. These types of forecasts change on a regular basis, but it gives you some idea of what is possible. Predictions are made to be broken. If you are a trader, it is important for you to learn to do your own analysis.
The Other Trend Lines
LTC/BTC is breaking above its bearish trendline today. Will we see a close above, or will it go back down below it?
On the four-hour chart, you can see how it was topping out at about 0.003654 BTC just last week. Again today, it is there waiting for a push above.
When we zoom out on LTC on this weekly chart against BTC, is there potential for it to go up 100% in 2021 still?
This portfolio section gives you an idea of what sort of return you can get when investing in crypto assets.
BTC/USD FUND is up 326% since October 1st, 2020. Since this is a long-term holding, it is best kept in cold wallet storage or a safe custody solution. We continue to see a long-term hold position as our best stable alternative. This past week bitcoin has been ranging between $37,332 and $46,454 USD in value.
FUND 3 started on November 16, 2020, with $1000 USD in value and was invested into BTC, LTC, ETH, and ADA. The total amount of BTC value from the four coins has had a gain of 66% since the start. The USD fund value is up 438% since the start. We will hold these positions to see how well it does against our BTC-only portfolio. LTC is down -15% against BTC. ETH is up 148% against BTC since the start. ADA has a gain of 418% against BTC and 1311% to USD.
BLWX Fund started on February 22, 2021. They all are assets we have profiled in the last few months, and we are interested in how they will perform in 2021 against BTC. BAT has a gain of 51% against BTC since the start; LINK is down -7%, WAVES is up 83%, XMR is up 36%. Overall, against BTC, the fund is up 41% and 17% against USD.
Overall, Bitcoin should be your first choice as an investment in crypto, though many digital assets can give you amazing gains if you manage your risk. As a long-term investor, we see it as our largest portfolio investment. If you are a day trader, there are many great assets to put on your watch list. Look through our previous newsletters to find some.
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Madbyte does have its own token called MADX on the Ethereum network and Madbyte on the Waves network. The two tokens are interchangeable on Madcapx.com.
Disclaimer: Nothing in this newsletter is intended to serve as financial advice. Therefore, do your own research and due diligence before applying any of the techniques highlighted in this post. Any risks or trades based on this newsletter are committed at your own risk.