5 Fantom-based DeFi projects with high upside potential in 2022



On December 4 of last year, when the cryptocurrency market took a heavy toll and Bitcoin (BTC) dropped more than 8%, reversing market sentiment negatively, Fantom (FTM) underwent a sharp correction and in less than 48 hours saw its value correct approximately 25%.

The drop from the high of $1.99 on December 4 to $1.53 at the close of the next day caused the altcoin price to be almost 60% below the historic high of $3.48 recorded in October, according Dice from CoinGecko.

A little over a month later, market sentiment remains bearish, but Fantom, unlike the main cryptocurrencies on the market, maintains a strong uptrend that began on December 21.

Since then, the price of the FTM has accumulated gains of approximately 117% and the protocol is accredited again as a challenger to Ethereum (ETH), capable of rivaling Solana (SOL), Avalanche (AVAX) and Terra (LUNA) in the dispute over contract networks. smart devices for greater efficiency and scalability.

In the same period, the appreciation of Fantom’s native token was accompanied by a doubling of the Total Amount Locked in network-based DeFi protocols, according to information of the Defi Llama data monitoring platform. In the last seven days alone, growth has been over 20% – skyrocketing the best performance among the top 10 smart contract networks, as with the exception of Terra and Polygon (MATIC), all others suffered from capital flight. .

In terms of adoption, since September the number of unique addresses on the network has been growing steadily and today add up to 1.6 million. By way of comparison, the number is equivalent to Avalanche’s unique addresses, whose market capitalization is $22 billion – three times that of Fantom.

Among the top ten blockchains dedicated to smart contracts, Fantom has the lowest TVL to market capitalization ratio. In fact, Fantom is the only network that has a total locked value greater than its market value. The lower the ratio, the greater the potential for network growth.

underlying technology

Like other tier-one solutions, Fantom seeks to offer more efficient alternatives to solve Ethereum’s bottlenecks – scalability, congestion and the high cost of transaction fees.

Ethereum works like a big computer that concentrates the processing of all transactions. The more users use it and the number of transactions to be processed increases, the greater the congestion and gas charges.

Fantom, on the other hand, is designed to be a network made up of many computers and transaction processing is spread across these computers. Each dApp is treated as a standalone blockchain and runs independently. If one of them is heavily triggered, the other is not affected. At the same time, applications can communicate with each other. Fantom developers present it as “the network of networks”.

In addition, Fantom supports the Ethereum Virtual Machine (EVM), which means that applications designed to run on the leading network can be deployed on Fantom.

Finally, Fantom counts Andre Cronje in its team of developers. The creator of the aggregator yield farming Yearn.finance (YFI) is recognized as one of the industry’s top DeFi architects. So it’s only natural that Fantom’s most promising Dapps are dedicated to decentralized finance.

1. Geist Finance (GEIST)

Geist Finance is a loan protocol along the lines of AAVE and, today, it is the one that concentrates the biggest slice of Fantom’s TVL – $1.69 billion. One of the reasons for its popularity among users is the fact that the protocol offers rewards to borrowers who use it.

Borrowers are rewarded with GEIST tokens in a proportion where the APY (annual return percentage) is higher than the interest charged on the loan, increasing the chances of making a profit on the operation.

Every 30 days, the amount of GEIST allocated to incentives is reduced, so the later the user joins, the lower the APY. In addition, rewards are distributed in GEIST. Therefore, if the token devalues, the APY realized in dollars could be much lower than initial projections. However, this caveat is valid for any operations involving DeFi protocols.

Another way to earn rewards in Geist Finance is by doing staking of GEIST – 50% of the revenue generated by the protocol is distributed among the stakers of the token.

2. SpookySwap (BOO)

SpookySwap (BOO) is Fantom’s largest decentralized exchange (DEX) and is to the network what Uniswap (UNI) is to Ethereum and PancakeSwap (CAKE) is to Binance Smart Chain (BSC). Through the automatic market maker (AMM) it is possible to make swaps of tokens or provide liquidity in pools and earn a share of protocol negotiation fees.

It is also possible to do staking of the resulting LP tokens to make farming of BOO: in some of the pools of farming, the APY exceeds 100%. In addition, the platform also has features that are not available in the vast majority of AMMs on the market.

In SpookySwap it is possible to place limit orders, in which the user can define the amount for which he wants to buy or sell a certain token, and the order will be executed only when – and if – the price reaches the target price.

SpookySwap also works as a bridge: users can use the platform to transfer Fantom tokens to other blockchains, such as Ethereum, BSC or Polygon (MATIC), for example.

3. Tomb Finance (TOMB)

TOMB is a stablecoin algorithm whose price is linked to the FTM on a one-to-one basis. In order to maintain price stability, an algorithm adjusts the TOMB supply as a function of Fantom price changes. The project’s developers characterize it as an “algorithmic rebalancing token”.

Tomb Finance offers a complex incentive system. By adding liquidity to the TOMB-FTM pool on SpookySwap, users receive LP tokens that can be locked in staking for in exchange for TSHARE tokens, which, in turn, can also be locked in staking to earn TOMBs as a reward.

As soon as it went into operation, Tomb Finance charged a fee of up to 20% on the sale of TOMB. In September of last year, a malicious agent created a website that allowed the sale of TOMB without paying a fee. It was not a hacking attack itself, but it caused a stir in the community, especially among the token holders, and the price of TOMB temporarily dropped below 0.3 FTM.

To solve the problem the developers abolished the fee and created new features to win back users. The efforts took effect, the price of TOMB recovered, returning to the price of 1 FTM, and the total value blocked in the protocol today already reaches US$ 776 million, a sum that places it as the Fantom’s fifth largest protocol in terms of TVL.

4. Beethoven X (BEETS)

Beethoven X (BEETS) is a fork of Balancer (BAL), a very popular protocol among Ethereum DeFi users. Beethoven X allows users to deposit tokens into index funds that are automatically rebalanced to maximize their earnings.

According to the developers of Beethoven, although Balancer is technically superior to Uniswap and Curve (CRV) on Ethereum, it has not been able to surpass them. However, on Fantom, the story may be different.

It is currently only Fantom’s 13th most popular protocol, with a TVL of $274.8 million, even though it has been the main beneficiary of the recent growth in total value locked onto the network. In the last seven days, Beethoven’s TVL is up over 97%.

Like Balancer, Beethoven has an automatic market maker (AMM) built into the platform that supports pools of liquidity with up to 8 different assets. Some pools of the protocol offer an APY greater than 100%.

5. Hector DAO (HEC)

The Hector DAO (HEC) is a fork of the Olympus DAO (OHM) based on Fantom. Like the original, HEC uses the algorithmic reserve currency mechanism to ensure price stability linked to the diverse decentralized assets that make up its treasury.

staking and titles are the two pillars of support for Hector DAO.

In addition to the spot market, the acquisition of the token can be done through bonds. stablecoins such as DAI, MIM and USDC are exchanged for HEC at a price below their market value. while the stablecoins are destined for the protocol treasury to back the token, the HECs become accessible to holders after a short grace period.

So, HEC holders are encouraged to deposit their funds in a staking to receive more HECs from an extremely high APY and interest that is automatically compounded.

The amount of HEC in the stakers grows over time, reducing the risks of exposure to the asset and making it more profitable. In theory, increasing the amount of HEC protects investors from unfavorable price changes. As the protocol guarantees a minimum price of 1 HEC per DAI, staking the token tends to generate profit in the long run. However, HEC, as well as OHM itself and other Olympus DAO forked tokens, are extremely volatile.

This one tokennomics it was created by Olympus DAO and all its forks spread across different networks use it. The innovation introduced by Hector DAO was the offer of clearing bonds with sHEC, not with the regular HEC. As a result, they start earning interest from the moment they are exchanged, regardless of the grace period, without the user having to claim them and deposit them in staking manually.

Conclusion

It is always important to reinforce that the success of these projects is directly linked to the development of Fantom and this includes attracting liquidity, increasing the number of users and a sustained growth of ecosystem infrastructure projects.

However, as Cointelegraph Brasil recently reported, Fantom appears at the beginning of the year as a potential candidate to claim part of the TVL committed by DeFi users who are looking for more efficient alternatives than Ethereum to explore the innovations of this market.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph Brasil. Every investment and trading movement involves risk. You must conduct your own research when making a decision.


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Thomas Miles

Cryptocurrency is the most recently discovered currency which will be likely at the help of modernization across the next few decades. With a limited control from the government, the crypto market is independent of many features of a sound market as we know it. Thomas brings these stories to us by weaving them into articles of general importance to all those looking at the fluctuations in the market, or new entries. Thomas is also the founder of Bulletin Bits and is an excellent leader. His leadership is the kind that makes him the most knowledgeable and experienced on the team. His wonderful work ethic and attitude are worthy of imitation!

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