The price action of Optimism (OP) and Fantom (FTM) tokens have been quite identical since the last quarter of 2022. The difference is, volatility is slightly higher for OP, which surged 240% year-to-date, compared to the 180% gains seen in FTM.
The Fantom Foundation has made several improvements since Q4 2022, which have catalyzed an uptrend in the token’s price. However, Fantom’s ecosystem remains primitive while its competitors expanded to support new use cases.
On the other hand, Optimism has shown 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.
Fantom’s ecosystem development stalls
The Fantom ecosystem received an adverse blow in early 2022 due to the departure of leading DeFi architect Andre Cronje. The blockchain’s ecosystem development stalled after Cronje’s departure. At the same time, Fantom’s competitors, like Polygon (ATOM), Arbitrum and Optimism continued to host various popular applications.
Cronje rejoined Fantom development efforts in November 2022, however, it appears it was too late by then. The lack of sustainable yields in a bear market has restricted liquidity inflows to Fantom.
The Fantom community also aimed to improve the quality of decentralized applications on the blockchain through an ecosystem development fund built by reducing the portion of burnt fees from 20% to 5% in December. While the number of smart contracts created on Fantom has spiked significantly since Q3 2022, the quality of dApps still needs to improve compared to its competitors.
The 30-day activity billboard from Nansen shows that top dApp activity on Fantom was limited to simple swaps, which is discouraging as other activities like derivatives trading, social media platforms and NFT trading are prospering on competing chains like Arbitrum, Polygon, and Optimism.
The most used dApps on Fantom between Jan. 20, 2023, and Feb. 20, 2023, is XEN Crypto, a free mint Ponzi scheme-like application. The application first appeared on Ethereum in October 2022 with a lot of excitement in the first few days of launch. However, the hype subsided after the mint became unprofitable as many users crowded the platform.
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