State of the Opera – January 2022

Hello and welcome to the inaugural State of the Opera, a monthly publication designed to give traders, investors, and skeptics a place to discover the all-time highs, lows, and everything in between on the Fantom Network. Inside, you can expect key crypto market metrics, updates on the movers and shakers within, and a list of noteworthy resources to further your own knowledge as together we attempt to keep up with Fantom’s explosive growth.

State of the Opera 

Liquidity Wars – ‘Andre Games’

It all began with a tweet.

Industry titan Andre Cronje, alongside Daniele Sestagalli, announced their collaboration on a new protocol. The protocol? A new automated market maker (AMM): Solidly and NFT ve(3,3) which Andre described as an ‘emission-based token [that balances] ecosystem participants’. 

The tokenomics of ve(3,3) leverages voting escrow mechanics developed by Curve Finance to allow protocols to obtain governance power with liquid staking. This allows protocols to direct liquidity across the network and maximize capital efficiency. In plain terms, the ve(3,3) allows protocols to vote on where rewards are emitted all across Fantom. Protocols that want to guarantee their projects receive rewards (all of the protocols)  were tripping over themselves to get their hands on one.

To qualify for a ve(3,3),  a game was devised. The rules were simple: make sure your protocol’s TVL is in the Top 20 on DeFillama on January 23rd. Those prestigious top twenty protocols would be provided with the first and only ve(3,3) NFTs. This caused a massive influx of investment into the network as new protocols were spun up with models specifically designed to capture TVL in order to chase the ve(3,3).

veDAO was the first DAO on the ground with the sole intention of capturing one of the coveted spots and established a strong lead, reaching $2.7B TVL after only two days. While some within the community were excited to see new peaks of TVL on the FTM network, others were concerned that veDAO was gatecrashing on a process originally designed to encourage and reward existing Fantom ecosystem protocols.

Enter OxDAO, the yin to veDAO’s yang. Backed by developers from pillars of the FTM community, OxDAO was created to combat purpose-built DAOs that were designed to steal liquidity from dedicated Fantom builders. This ‘vampire attack’ strategy delivered a blow to veDAO with users flocking to 0xDAO for its commitment to 100% decision-making function in the hands of its community via the protocol’s utility token, OXD.

In the end of the TVL tussle, NFTs were distributed to the top 25 projects on Defillama with specifics on the distribution recipients and quantity available here. 0xDAO and veDAO both received placement within the top five projects. A stalemate has followed as protocols wait to see how this will all play out when Solidly finally deploys on Fantom mainnet. Does the end of the liquidity war mean peace for the Opera? Or is this just round one of “The Andre Game”? Only time will tell.

Scream Launches Beta Analytics Console

Scream users will be happy with a new analytics console. Users will be able to track major market analytics, monitor protocol reserves and SCREAM buyback in this public beat. Check out their Discord here for updates.

Geist made its first announcement since launching on Discord

Members of Team GEIST rejoice as they receive the ve(3,3) and Vexxa rises from the crypto crypt to update users on the Geist Finance Discord. Vexxa addressed high gas cost concerns amongst the community and confirmed that the dev team is preparing for the launch of Solidly with partner projects to be announced ‘within some weeks’.

‍Want to learn more about Geist and what they have to offer? Check out our project overview here

Creditum Launch

In early January, Creditum launched as a lending & borrowing protocol that allows users to mint cUSD, a stablecoin pegged at $1 USD, by supplying collateral. Creditum is the spiritual successor to StakeSteak with Revenant Finance using the lessons learned from their security compromise late last year to focus on security. This included help from the Byte Masons and independent contract auditing by Peckshield.

CREDIT started trading on January 12th and opened to a price of $7.75 USD before closing the month closer to the $2.34 mark.

Check out our detailed overview of the Creditum project here.

Opera Spotlight – Beethoven X (BEETS)

Who are they?

Beethoven X is our Opera spotlight protocol for this month. This project has the lofty ambition of being the one-stop decentralized investment platform and is the first next-generation AMM protocol on the FTM network. As seen in Table 6, they’re not the only people that believe in this protocol with the highest monthly movement in TVL on the FTM network.

What can they offer? How do they do it?

Beethoven X is a fork of the Balancer protocol (BalancerV2) which is succinctly described below:

 “Balancer turns the concept of an index fund on its head: instead of paying fees to portfolio managers to rebalance your portfolio, you collect fees from traders, who rebalance your portfolio by following arbitrage opportunities.” – Source

This positions Beethoven as an automated portfolio manager, liquidity provider, and price sensor all wrapped into one and built on its Balancer V2. It also utilizes Smart Order Router (SOR) which intelligently sources liquidity from multiple pools to automatically figure out the best available price from all available pools.

How to get involved?

Users can engage with Beethoven and start earning BEETS by becoming a  liquidity provider (LP) and staking LP tokens. Users earn a portion of 30% of all protocol fees and can earn even more by accumulating fBeets. Beethoven has introduced protocol fees for transactions, with 30% of the fees being used to buy BEETs off the open market and redistribute them back to liquidity stakers.

Want to learn more about this promising protocol? Check out our detailed Protocol Overview for Beethoven X

DeFi Snapshot

A brief explanation of table 4: the first column names some of the leading layer one blockchains in crypto, the second column shows the number of projects developing on the chain, and the next two columns show the percentage monthly change in total value locked (TVL) on the network and the TVL in USD value.

The final column displays the ratio of market capitalization to TVL locked in the protocol. A ratio of more than 1.0 indicates the market cap is greater than the TVL. A value beneath 1.0 means the market cap is lower than TVL.

A key takeaway from this table is that  FTM is the only network to display positive growth in its TVL this month. FTM managed to overtake Solana, Avalanche, and even Binance Smart Chain briefly this month in TVL. In future months, we will be discussing protocol growth and notable changes to the Mcap/TVL ratio.

Outside the Opera 

We now look at the other crypto chains within the ecosystem and see how they’ve been faring.

Binance Smart Chain recently revealed its detailed roadmap for 2022. The article mentions scalability as their top priority for 2022 and their plans for expanding the BSC ecosystem through scaling and cross-chain and multi-chain solutions. BSC had its share of scandals in January with Pakistan’s Federal Investigation Agency issuing a notice in relation to eleven online investment apps integrated with Binance. Nigerian traders are accusing Binance of blocking their accounts for no apparent reason, further driving investors to more decentralized options.

Ethereum has sustained a steady negative trend this month with signs of further devaluation expected. However, some investors are still bullish on Ethereum with ETH 2.0[1]  (rebranded to ETH Consensus) and the scaling solutions it will offer. Our favorite non-financial advisor has an excellent summary located here. It’s not all bad news as famously high Ethereum network fees have hit a monthly low.

Terra has had a volatile last quarter. After reaching new all-time price highs in December, its native token has not been immune to the negative trends plaguing most layer one chains in January. This article details the Luna/Wonderland controversy and Magic Internet Money (MIM) related issues.

Polygon has had a similar time as Terra. The network has announced involvement with Beatles-related NFTs, a new mobile-only gaming universe, and the announcement of ex-Global Managing Director at YouTube gaming, Ryan Wyatt joining the ecosystem as their CEO of Polygon Studios. All this news has helped MATIC weather the January storm.

It wasn’t all doom and gloom as AVAX developers/investors have plenty to be excited about in 2022.  The Avalanche Foundation raised $230 million to support the growth of the DeFi ecosystem. The developers also completed phase four of its Apricot upgrade which reduced transaction fees and included further improvements detailed here.

In September 2021, Solana experienced a DDOS attack that caused a network outage for multiple hours. The network suffered another DDOS attack in December, and issues arose regarding duplicate transfer issues for blockchain platform validators this month.  FTX CEO Sam Bankman-Fried[2] believes that SOL is still better than other networks in the industry, even with its recent shortcomings.

Featured Project – Telos

Our featured crypto project this month is Telos (TLOS). This section hopes to highlight a promising project in the crypto space and provide a brief summation of its promising qualities.

The Telos mainnet went live in 2018 with no initial coin offering (ICO) or VC (venture capital) funding allowing the network to grow in a truly decentralized fashion. Telos boasts a strong governance structure and an open network, in the hopes of empowering token holders to contribute and impact the direction of the chain.

One of its more exciting projects is the launch of Telos EVM (Ethereum Virtual Machine), a powerful and scalable Ethereum Smart Contract platform. The platform aims to offer an environmentally friendly solution to issues users experience while on Ethereum-based blockchains, such as front running and variable gas fees for transactions. The EVM boasts speeds of  10,000 transactions per second (TPS) and 0.5-second block times. 

Check out the Telos website to find out more about this exciting project.

Key Metrics 

Market Cap

For this section, the aim will be to highlight key growth and health metrics that aim to summarize market conditions. To combat tunnel vision, the previous three months have been included.

At the time of writing this article, FTM closed the month out with a market cap of just over $5 billion. As seen in Table 1, the market cap reached a new all-time high this month! The recent and frequent record-breaking performances highlight the excitement growing around this community. If we compare the peak prices from January last year to this month, FTM had a healthy gain of 2406%.

The list of achievements to be discussed this month continues with the total value locked on the FTM network reaching an all-time high of $12.7 billion before leveling out to $11 billion in the final few days of the month.

Contributing to this record-breaking month were the announcements of new projects from notable Fantom personalities Andre Cronje and Daniele Sestagalli, namely Solidly and ve(3,3). This proclamation in early January stoked massive interest and controversy in the community because protocols would have to compete for an opportunity to claim a ve(3,3) NFT. This ‘game’ for TVL has been called ‘The Andre Game’, ‘ve(3,3) war’ and ‘The Fantom Vampwars’. All are monikers for the same Battle Royale-style competition that defined the end of January and will be discussed in greater detail below.

Price movement

FTM had the benefit of multiple announcements and exchange listings throughout this month which ballasted the price in the sea of red that flooded the crypto space at month-end.

The FTM foundation announced listings on FTX and Binance US allowing trading for a new wave of American investors. The ve(3,3) NFTs also put the network in the spotlight, helping FTM overtake Solana and AVAX in terms of TVL. This news has helped to support the price and made FTM an outlier in an otherwise macro bear market.

User Engagement

A network is nothing without community and meaningful user engagement. To help quantify the social aspect of the Fantom Network, we have decided to measure the average daily unique wallets created as one of our base indicators of new users entering the space. Average daily transaction counts will show the frequency users are utilizing the network and the total distinct addresses will provide us with a rough estimation of the user population.

Table 3 shows stable numbers for the average daily unique wallets created and the average daily transaction count towards the end of the year. As with many metrics for the network, user engagement exploded in January 2022 signifying the considerable levels of interest flooding into the space following Andre Cronjes\’s announcement.

For context, at the time of writing, Reaper Farm has 33,114 unique total users.

It was a busy month for SpookySwap. Their router received over 20% of all transactions on the network, during the final 7 days of the month. Geist was not that far behind, with just under 13% of all FTM received heading to the native liquidity market.  

It comes with little surprise that Wrapped Fantom (WFTM) maintains a dominant lead as the token with the highest transaction count on the network. OxDAO, has shown an impressive amount of trading for a coin only released in late January, getting close to overtaking USDC for the second spot. 

USDC remains the top token traded on the FTM network between unique senders and receivers. Interestingly, we see in Figures 3 and 4 that OxDAO overtook Magic Internet Money (MIM) in top tokens by total unique users this month.

Pulse of the Network

This section will hope to aggregate and compound your own interest within the FTM network space. If you’re looking for some research to claim as your own or just the headlines for all the latest news and gossip this is the Pulse of the Network, the information you don’t want to miss out on.

FTM Headlines

FTM overtakes Solana (SOL) and Avalanche (AVAX) in Total Value Locked (TVL) per chain on Defillama – Watch out BNB, FTM’s not too far – Click here to see how close. UPDATE: BNB surpassed

Mainnet FTM was finally supported by Binance US and FTX opening up trading to millions of users

Two titans of Defi collaborating on FTM ecosystem project Solidly – TLDR: Veteran crypto developer Daniele Sestagalli ($Time , $Ice, $Mim) and Andre Cronje (Yearn Finance founder and FTM Technological advisor) developing a new project on FTM network. Andre Cronje discusses initial distribution, competition and building protocols for protocols 

veDAO – New Protocol with a singular focus – getting in on ve(3,3) – TLDR: veDao hits $2.69 billion total value locked in 48 hours to receive one of ve(3,3) NFTs

OxDAO – Meet the new fantom ecosystem DAO – what does this mean for builders on the FTM network ? – TLDR: Native Fantom Protocols team up to counter the emergence of short-term veDAO designed to steal liquidity from dedicated Fantom builders

The Rumour Mill

Coinbase listing soon to join? – What will this mean for FTM HODLers in February?\\

Grayscale considering FTM in the next wave of crypto investment products –  World’s largest digital asset managers considering FTM and another crypto to add to the investment product portfolio 

FTM Podcasts and Videos

Fantom CEO talks origin of Fantom, why it’s unique, and how Fantom will impact the future  – Spotify Apple Google

Fantom Unchained – Is BeethovenX the best buy on Fantom?

Fantom Unchained – Episode 20 – Justin Biebs, 24 Dollars and Doublesharp talk veDao and 0xDao 

FTM Foundation and Industry Reports

FTMScan – New Fantom network explorer allows users and developers a sleek insight into the FTM network – All your FTM network information in one useful website

Sizing up a Bitcoin Bear -Glassnode –  Assessing the damage of a challenging Bitcoin market and establishing the likelihood that a bear market is on the horizon

FTM Community/Fan Content

FTM street art spotted in Texas

Reddit User u/ScientiaVincit creates a machine learning-based index to measure the popularity of Layer 1 projects – FTM gaining popularity in the Twitterverse