Home CryptocurrencyBitcoin How DeFi and DApp development Fantom and Optimism directly affect FTM and OP action

How DeFi and DApp development Fantom and Optimism directly affect FTM and OP action

by SuperiorInvest

Optimism (OP) and Fantom (FTM) tokens are completely identical from the last quarter of 2022. The difference is that volatility is slightly higher for OP, which is up 240% year-over-year compared to the 180% gains seen with FTM.

The Fantom Foundation has made several improvements since Q4 2022, which yes catalyzed the upward trend included in the price of the token. However, Phantom’s ecosystem remains primitive, while its competitors have expanded to support new use cases.

On the other hand, Optimism has demonstrated robust community and decentralized application (dApp) development thanks to the loyalty of Ethereum developers and the Optimism Foundation’s effective strategy in aligning token incentives with governance.

OP/USD (orange) and FTM/USD (blue) price chart. Source: TradingView

Development of the Phantom ecosystem is stalling

The Fantom ecosystem was dealt an adverse blow in early 2022 due to the departure of a leading DeFi architect Andre Cronje. Blockchain development stalled after Cronje’s departure. At the same time, Fantom’s competitors like it Polygon (ATOM), Arbitrum and Optimism continued to host various popular applications.

Cronje rejoined the Phantom development effort in November 2022, but by then it seems it was too late. The lack of sustainable returns in the bear market limited the flow of liquidity to Fantom.

Phantom TVL over time. Source: DefiLlama

The Fantom community has also focused on improving the quality of decentralized applications on the blockchain through an ecosystem development fund built by reducing the proportion of burnt fees from 20% to 5% in December. While the number of smart contracts created on Fantom has grown significantly since Q3 2022, the quality of dApps still needs to improve compared to the competition.

Number of smart contracts created on Fantom. Source: Dune

Nansen’s 30-day activity billboard shows that the largest dApp activity on Fantom has been limited to simple swaps, which is discouraging as other activities such as derivatives trading, social media platforms and NFT trading are thriving on competing chains such as Arbitrum, Polygon and Optimism.

The most used dApps on Fantom between January 20, 2023 and February 20, 2023 is XEN Crypto, a free app similar to a Ponzi mint scheme. First, the application appeared on Ethereum in October 2022 with a lot of excitement in the early days of the launch. However, the hype died down after the mint became unprofitable as many users flocked to the platform.

Top Fantom dApps by usage in the last 30 days. Source: Nansen

Optimistic developers find success with new use cases

At the same time, Optimism has successfully attracted liquidity and activity to its ecosystem following the launch of the Optimism token and accompanying airdrop campaigns. in April 2022the Optimism team stated that it would be “dropping season” and launched the Optimism Quest campaign.

The Layer 2 network has seen increased usage from users for hoarding its non-fungible tokens (NFTs), which would likely cause them to be airdropped. Quests ended in January 2023, after which there was a sharp decline in activity. However, DeFi liquidity remained sticky.

Total liquidity on Optimism. Source: DefiLlama

In addition, the list of the most used decentralized applications on Optimism includes the income platform Pool Together, the derivatives platforms Synthetix and Perpetual Protocol, and the leading credit platform Aave.

Optimism also hosts a decentralized blogging platform, Mirror, which allows content authors to publish their articles as NFTs. The platform has gained considerable usage, with 2.7 million hits on your website.

Top Optimism dApps by usage in the last 30 days. Source: Nansen

Comparison of FTM and OP Tokenomics

One disadvantage of the Optimism token is that it is only a management token and does not entitle users to actual revenues from gas fees. The OP token supply will increase by 2% per year from April 2023 along with unlocking investors and teams.

However, the Optimism team incentivized participation in governance, which improves protocol governance and also aligns incentives with its intended use, i.e. higher voter participation.

Optimistic governance has shown More efficient than competitors like Uniswap (UNI) and Compound (COMP) while promoting decentralization. The Layer 2 network ecosystem is also expanding to support a variety of applications. Optimism also benefits from the native launch of the Arbitrum token, which can likely add fuel to the Tier 2 token story and push the OP token price higher.

Related: Vitalik shows support for the management structure of Optimism and the OP gas proposal

For Fantom, despite implementing a burning function in its protocol, the actual yield of the platform is still negative, around -0.93%. Blockchain fees and liquidity must improve significantly to increase the value of FTM. Otherwise, it risks becoming irrelevant along with many other Layer 1 protocols on the market.

Technically, FTM may see more upside while holding support above $0.38 and targeting the $0.95 support and resistance area. If it falls below $0.38, it could drop as low as $0.19.

FTM/USD weekly chart. Source: TradingView

At the OP, its price jumped above the previous high of $2.30, which will now act as support for further upside as it experiences price discovery. On the other hand, a drop below this level could lead to a drop in the price of the token towards $1.30.

The views, thoughts and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading step involves risk and readers should do their own research when making decisions.

Source Link

Related Posts

%d bloggers like this: