Fantom has had the worst of the crypto winter but the company still manages to make decent returns. According to Andre Cronje, Fantom is a show of resilience in the market turmoil. From liquidation risk to millions of revenue per year.
Fantom is a highly scalable blockchain platform for Decentralized finance (DeFi), crypto dApps, and enterprise applications. The platform hosts over 200 dApps including DEXs, tools, wallets, NFT platforms, and GameFi. The blockchain’s native currency is FTM.
So how has Fantom (FTM) faired over the years? We take an inside look at their cash flow and why it’s different from the other 3000 digital currencies in the market.
Fantom’s cash flow
Most of the altcoins in the crypto market have lost over 60% of their value this year alone. The loss of value has affected their economy, especially those that valued their ecosystem in their native currency.
Following the collapse of FTX, Changpeng Zhao, CEO of Binance reiterated the need for crypto platforms to avoid valuing themselves in their native tokens. The CEO has taken similar steps to protect the Binance community.
FTM has not been spared by the high volatility of the crypto market. Like any other company, it has had its ups and downs.
The company lost 90% of its value after raising funds in June 2018 to liquidation in Dec 2018 as a result of falling crypto prices.
Andre Cronje, a prolific coder famous for creating Yearn Finance and Keep3rV1, and participation in high-profile DeFi projects provides an inside look at FTM finances.
At their lows, the company was forced to act frugal by employing only necessary staff and freezing expenses for listing on exchanges and influencers. In 2019, Fantom only held about $400K worth of FTM.
In 2020, wise investments from non-FTM asset classes saw the company’s revenue rise to $3M with FTM worth $400,000. They then invested aggressively in DeFi, including the troubled Alameda and Blocktower. Their revenues rose and now boast larger FTM reserves and income.
The company now earns over $10M a year exclusive of capital gains. Their sources of income include validators(4M FTM), delegators (4M FTM), network revenue from transaction fees, and DeFi revenue ($5.98M) yearly.
Without having to touch their native token, the company claims to be sustainable for 30 years at the current burn rate.
Lessons from Andre Cronje Fantom
Here are lessons we can pick from Andre’s Fantom’s analysis.
Never compete with rivals for listings, integrations, or partnerships which can become very expensive.
Never price your company in their native currency. About 75% of FTM is held by L1 protocols, the company has slowly bought back FTM from 3% at launch to 14% today.
Blockchain companies should use their validator nodes to support the network and not create revenue. Incentives from validators should be used to support dapps launching on their blockchain.
Blockchain companies should invest with partners for the long term. With better-emerging technologies, partners can easily switch. Continuous technological development and product delivery are key. Revenue models that include selling native currencies are detrimental to themselves, and their community.
At press time, FTM was trading at $0.2131 up by 16% in the past 24 hours
Also, read FTM price prediction 2023 -2031.