by Forrest @0xStacker
Thesis
Fantom has the necessary flexibility & runway to rapidly iterate until it finds Product-Market Fit among the constantly shifting demands of the developing web3 space.
Fantom will morph into a network that solves a problem and attracts users.
A quick explainer on Fantom and this thesis:
1. What is Fantom?
Fantom is a layer 1 smart contract network (like Avalanche, Solana, BSC, etc.) that makes scalability and network throughput improvements over early networks like Ethereum.
While it uses a different architecture than these other networks, the end result is similar: a fast, scalable, and affordable smart contract network.
Stop being a blockchain nerd.
There are plenty of dead chains out there with great tech.
Now is not the time to get hung-up on blockchain architecture or theoretical maximum transactions per second.
Layer 1’s, like Fantom, are at a point where product market fit and user adoption matter far more than technical optimizations.
Chains that can find product market fit and drive user adoption will print shekels. Period.
A few examples:
@solana is the .jpg trading chain, and is also trying to do payments & blockchain gaming.
@0xPolygon is the web2 enterprise integrations chain (among many other strengths).
@ethereum is the og DeFi & NFT chain (and so much more)
@arbitrum is the derivatives trading chain.
Tron is Justin Sun’s bank account.
Fantom used to be a strong DeFi chain in the bull market, but most of the value has left in the bear market.
Right now, Fantom is a borderline dead network, and because of that you're getting a dead network price on $FTM.
The question to ask is:
"Is it likely that Fantom bounces back and becomes a relevant, high value network at some point in the future?"
I believe the answer to that questions is yes because:
Fantom has 30+ years of runway sitting in their treasury and is currently cash-flow positive, which gives them the flexibility to build and rapidly iterate until they find PMF.
Fantom is rich.
Andre Cronje recently posted an article that included Fantom’s current financials, revealing 2 major points:
1. At this point in time Fantom is cash flow positive. While most projects in the space have a quickly shrinking runway, Fantom is profitable.
2. Fantom currently has >30 years of runway without having to sell any of their $FTM.
Barring extreme mismanagement (which is entirely possible), Fantom isn’t going away any time soon.
Unlike most projects that have to cut back in bear markets, Fantom has the luxury of scaling up.
This is a competitive advantage.
Rapid iteration.
With 30 years of runway, Fantom has the ability to throw stuff at the wall until something sticks.
For example, Fantom recently announced a proposal to reduce the fee burn rate from 20% to 5%, and re-allocate the 15% to dApps on FTM:
https://fantom.foundation/blog/dapp-gas-monetization-program/
Will this proposal bring developers and value back to FTM? Maybe. Maybe not.
Fantom is also improving scalability with the Fantom Virtual Machine (FVM):
https://fantom.foundation/blog/innovating-the-fantom-virtual-machine/
The point here is that Fantom can keep building, iterating, and pivoting until they find success in the quickly changing crypto landscape.
TLDR:
Fantom is rich.
They have runway to keep trying until they get it right.
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