By
Bhushan Akolkar
April 10th, 2024
The Fantom USD stablecoin has been extremely volatile since inception compared to the pegged dollar price.
The Fantom (FTM) network, a fast-developing smart contract and DeFi ecosystem, has gained significant traction in the past few weeks. According to market data provided by Binance-backed Coinmarketcap, Fantom (FTM) has rallied over 153 percent in the past five weeks. Amid increased crypto speculation, liquidations, and short squeezes, the Fantom (FTM) price may be headed to trade a dollar per unit in the coming weeks. Such a bullish thesis is bolstered by the fact that the Fantom ecosystem is preparing for a stablecoin comeback. According to lead architect and cofounder at Fantom Foundation Andre Cronje, rebooting of FUSD is happening through a systemic upgrade to FUSD version 2 (v2). As such, FUSD v1 users are advised to check the newly provided swapping capabilities provided through the DAI stablecoin.
Notably, the Fantom USD stablecoin has been extremely volatile since inception compared to the pegged dollar price. At one time in 2022, the FUSD dropped as low as $0.23, over 70 percent below the pegged dollar price. Trading around $0.85 on Monday, Cronje has provided a clear roadmap to reboot FUSD and provide Fantom DeFi users with reliable payment infrastructure.
“fUSD v1 will implement liquidations. Any positions where fUSD debt is equal to or greater than the FTM or sFTM backing will become liquidated. Where the backing is in sFTM, the stake will immediately be unstaked and all rewards claimed as well. Where this is a validator, if the validator falls below minimum stake, the validator will no longer be able to produce blocks or receive block rewards,” Cronje noted.
Fantom Future Market Outlook and Its FUSD Plans
The Fantom network has grown to a $1.5 billion valued ecosystem with about $532.42 million in total value locked (TVL), according to data by defillama. With key projects like DEXes and lending protocol leading the TVL space, Fantom developers are keen to provide a cheaper fee payment infrastructure.
5/13 Gas subsidies, allowing users to onboard without needing FTM (Q2 – Q3 this year). Wallets without FTM can interact with your dapp
— Andre Cronje (@AndreCronjeTech) February 2, 2023
The Fantom’s Full Solidity and Vyper compatibility make the network’s interoperability with other chains seamless. Furthermore, the Fantom network has provided sustainable funding and revenue, via Gitcoin grants, ecosystem vault, and gas monetization according to Cronje.
The Fantom community is hopeful the ongoing developments will push the network to the top layer 1 blockchain trading at the top 10 by market capitalization. Nonetheless, the push will not be easy as hundreds of competing layer 1 blockchains have emerged since the 2021 bull market and all provide almost similar services. As such, the layer 1 project that incentives its Web3 users is likely to get the highest stake in the global markets.