How Fantom and Optimism’s DeFi and DApp growth instantly impacts FTM and OP worth motion


The value motion of Optimism (OP) and Fantom (FTM) tokens have been fairly an identical for the reason that final quarter of 2022. The distinction is, volatility is barely larger for OP, which surged 240% year-to-date, in comparison with the 180% beneficial properties seen in FTM.

The Fantom Basis has made a number of enhancements since This autumn 2022, which have catalyzed an uptrend within the token’s worth. Nevertheless, Fantom’s ecosystem stays primitive whereas its opponents expanded to assist new use instances.

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Alternatively, Optimism has proven strong neighborhood and decentralized software (dApp) growth because of the loyalty of Ethereum builders and the Optimism Basis’s efficient technique in aligning token incentives with governance.

OP/USD (orange) and FTM/USD (blue) worth chart. Supply: TradingView

Fantom’s ecosystem growth stalls

The Fantom ecosystem obtained an adversarial blow in early 2022 as a result of departure of leading DeFi architect Andre Cronje. The blockchain’s ecosystem growth stalled after Cronje’s departure. On the similar time, Fantom’s opponents, like Polygon (ATOM), Arbitrum and Optimism continued to host varied in style functions.

Cronje rejoined Fantom growth efforts in November 2022, nevertheless, it seems it was too late by then. The dearth of sustainable yields in a bear market has restricted liquidity inflows to Fantom.

Fantom TVL over time. Supply: DefiLlama

The Fantom neighborhood additionally aimed to enhance the standard of decentralized functions on the blockchain by way of an ecosystem development fund constructed by decreasing the portion of burnt charges from 20% to five% in December. Whereas the variety of good contracts created on Fantom has spiked considerably since Q3 2022, the standard of dApps nonetheless wants to enhance in comparison with its opponents.

Variety of good contracts created on Fantom. Supply: Dune

The 30-day exercise billboard from Nansen exhibits that prime dApp exercise on Fantom was restricted to easy swaps, which is discouraging as different actions like derivatives buying and selling, social media platforms and NFT buying and selling are prospering on competing chains like Arbitrum, Polygon, and Optimism.

Essentially the most used dApps on Fantom between Jan. 20, 2023, and Feb. 20, 2023, is XEN Crypto, a free mint Ponzi scheme-like software. The applying first appeared on Ethereum in October 2022 with a whole lot of pleasure within the first few days of launch. Nevertheless, the hype subsided after the mint turned unprofitable as many customers crowded the platform.

Prime Fantom dApps by utilization within the final 30 days. Supply: Nansen

Optimism builders discover success with new use instances

On the similar time, Optimism has efficiently attracted liquidity and exercise to its ecosystem after launching the Optimism token and accompanying airdrop campaigns. In April 2022, the Optimism group acknowledged there could be a “season of airdrops,” and launched an Optimism Quest marketing campaign.

The layer-2 community noticed elevated utilization from customers for amassing its non-fungible tokens (NFTs), which might doubtless make them eligible for the airdrop. The Quests resulted in January 2023, following which there was a steep decline in exercise. Nevertheless, the DeFi liquidity remained sticky.

The overall liquidity on Optimism. Supply: DefiLlama

Furthermore, the record of most used decentralized functions on Optimism consists of yield platform Pool Collectively, derivatives platforms Synthetix and Perpetual Protocol and main lending platform Aave.

Optimism additionally hosts a decentralized running a blog platform, Mirror, which permits content material writers to situation their articles as NFTs. The platform has gained important utilization, with 2.7 million hits on its web site.

Prime Optimism dApps by utilization within the final 30 days. Supply: Nansen

Evaluating the tokenomics of FTM and OP

One downside of the Optimism token is that it is just a governance token and doesn’t entitle customers to actual yields in gasoline charges. The OP tokens’ provide will inflate at 2% per 12 months, together with investor and group unlocks, beginning April 2023.

Nevertheless, the Optimism group has incentivized participation in governance, which improves the protocol’s governance and likewise aligns incentives with its supposed use, i.e., larger voter participation.

Optimism’s governance has proved more efficient than opponents like Uniswap (UNI) and Compound (COMP) in selling decentralization. The layer-2 community’s ecosystem can also be increasing by supporting numerous functions. Optimism additionally stands to learn from Arbitrum’s native token launch, which might doubtless add gasoline to the layer-2 token narrative, pushing the OP token’s worth larger.

Associated: Vitalik shows support for Optimism’s governance structure and OP gas proposal

For Fantom, regardless of implementing a burn function in its protocol, the actual yield of the platform continues to be damaging, around -0.93%. The blockchain’s charges and liquidity should enhance significantly to boost the worth of FTM. In any other case, it dangers turning into irrelevant alongside many different layer-1 protocols out there.

Technically, FTM can see extra upside whereas it holds assist above $0.38 and goal the $0.95 assist and resistance space. A breakdown under $0.38 may see it dropping towards $0.19.

FTM/USD weekly chart. Supply: TradingView

For OP, its worth surged above its earlier peak of $2.30, which is able to now act as a assist for additional upside because it experiences a worth discovery. On the flipside, a breakdown under this stage may see the token’s worth drop towards $1.30.