The Ultimate Due Diligence Report on FTM Token (FANTOM)

1. Executive Summary

Overview of the FTM token and its unique value proposition.

Fantom, a blockchain platform launched by the Fantom Foundation in 2018, aims to tackle scalability, speed, and security challenges prevalent in traditional blockchains. The Lachesis Protocol, its distinctive architecture, ensures rapid transaction processing and enhanced security, differentiating it from conventional blockchain networks.

The FTM token, Fantom's native currency, facilitates network fee payments, staking, and governance. Fantom has achieved substantial growth, peaking at $3.48 during the 2021 bull-run and retaining a robust market presence with a $730 million market capitalization as of June 2023.

Fantom's value proposition centers on its DeFi and dApp sectors, offering lucrative opportunities compared to Ethereum and other blockchains. Recent advancements and the expanding DeFi ecosystem suggest that Fantom might be undervalued, hinting at future growth potential.

Fantom's innovative Gas Monetization Program incentivizes projects utilizing its network and boosting gas fee usage, thereby increasing demand for block space and supporting the network infrastructure. This initiative is part of Fantom's broader strategy to enhance the value of FTM tokens and retain developers.

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Brief summary of the investment opportunity

The investment opportunity in Fantom (FTM) presents a promising prospect for investors. Fantom, a blockchain platform focusing on scalability and security, offers various avenues for investment, including staking FTM tokens to earn rewards and participating in FTM Duals through platforms like ReHold, which can provide up to 220% APR on pairs like FTM/USDT, FTM/USDC, and FTM/BUSD. The platform's unique consensus algorithm and emphasis on scalability and security make it an attractive option for developers and investors alike. Analysts predict significant growth potential for FTM, with some forecasting a price target of $2.00 by the end of 2023. Additionally, Fantom's value is influenced by market demand and supply dynamics, with increasing adoption of its protocols potentially leading to a rise in the token's value. Overall, Fantom's innovative features, growth trajectory, and diverse investment opportunities position it as an appealing option for investors seeking exposure to the blockchain and cryptocurrency space.

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2.  Overview

Mission and Vision: FTM's long-term objectives.

Fantom's long-term objectives, as outlined in its mission and vision statements, focus on transforming educational achievement, enhancing social mobility, and fostering leadership. The mission of Fantom is to create outstanding organizations that promote educational excellence, character development, and service to communities. This includes elevating the life chances of young people in areas of social and economic deprivation, improving school standards nationally, and providing more choice for parents by offering inspirational schools. Fantom aims to make a demonstrable impact on social mobility and equality, creating a diverse network of faith and non-faith schools to ensure every child has access to quality education and opportunities for success.

In terms of vision, Fantom aspires to nurture today's young people and inspire tomorrow's leaders by embodying values such as service, teamwork, ambition, and respect. The overarching priorities guiding Fantom's work are educational excellence, operational excellence, and building a strong Star community. These objectives reflect Fantom's commitment to driving positive change in education, social mobility, and community development, positioning it as a transformative force in the educational landscape.

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Problem Statement: Challenges or gaps FTM aims to address.

The challenges and gaps that Fantom (FTM) aims to address revolve around the intersection of finance and technology, aligning with the evolving landscape of the FinTech industry. Fantom seeks to bridge the gap between traditional financial systems and innovative technologies by streamlining processes, enhancing security, and improving customer experiences. In a rapidly changing environment characterized by digital advancements, shifting customer preferences, and evolving regulations, Fantom aims to offer solutions that leverage technologies like blockchain, artificial intelligence, and data analytics to revolutionize financial services. By focusing on the integration of FinTech skills, Fantom aims to empower professionals to navigate this dynamic landscape effectively, creating a significantly expanded financial ecosystem that includes both innovative FinTech start-ups and traditional financial institutions. Fantom's mission is to enhance the financial industry by fostering a new breed of professionals proficient in both finance and technology, thereby addressing the challenges posed by the rapid evolution of financial technologies and the increasing demand for digital solutions in the financial sector.

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Solution: How the FTM TOKEN proposes to solve these problems.

Fantom (FTM) aims to address the challenges it faces by focusing on key areas such as compliance with regulations, innovation and competition, trust, security, and data protection. To tackle these challenges, Fantom plans to reinvent strategies and foster collaboration within the fintech industry. By staying current with technological advancements while avoiding succumbing to passing trends, Fantom aims to navigate the evolving landscape effectively. Additionally, Fantom recognizes the importance of addressing compliance concerns, enhancing trust, ensuring security, and complying with regulations to achieve its goal of offering free trades without the hassle of cash. Through strategic reinvention, leveraging collaboration, and prioritizing security and compliance, Fantom aims to overcome these challenges and position itself as a leader in the fintech space.

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3. Technology and Product

Technical Architecture: Overview of the blockchain and other technologies used.

Fantom (FTM) is a layer 1 smart contract development platform with high performance, EVM compatibility, and better scalability. It utilizes a Directed Acyclic Graph (DAG) instead of a traditional blockchain, which ensures better flexibility and speed compared to blockchain-based counterparts. Fantom's Opera Chain is the mainnet deployment that operates as a DAG, with each vertex or node representing a block featuring a collection of transactions. This design allows for asynchronous operations, enabling network stakers to produce new transactions anytime. Fantom's consensus mechanism, Lachesis, ensures faster transaction speeds, deterministic finality, and reduced transaction costs. It is an open-source, permissionless, and decentralized platform designed to resolve the problems of decentralizing services at scale, particularly in legacy financial systems. Fantom's modular architecture enables complete customization of blockchain networks for digital assets, ensuring network security through a leaderless Proof of Stake protocol.

SOURCES:

https://link.springer.com/article/10.1007/s00502-009-0656-y 

https://www.coinbureau.com/review/fantom-ftm/ 

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Product Offering: Description of the product or service, including its development stage.

Fantom (FTM) is a smart contract platform based on a directed acyclic graph (DAG) that offers decentralized finance (DeFi) services to developers. Launched in 2018, its mainnet, OPERA, was activated in December 2019. Fantom's primary focus is on addressing issues commonly found in smart-contract platforms, particularly enhancing transaction speed to under two seconds. The platform is tailored to assist financial institutions and lenders in providing small-scale loans and other financial products to individuals and businesses lacking access to traditional banking services. Fantom's consumer lending system features analytics and reporting tools for monitoring the performance of inclusive finance businesses, streamlining consumer loan management, simplifying loan origination, and integrating digital payments, automated reminders, and flexible repayment options to enhance the consumer lending experience, boost repayment rates, and foster sustainable growth. Fantom's modular architecture allows for the customization of blockchain networks for digital assets, ensuring network security through a leaderless Proof of Stake protocol.

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Innovation: How FTM innovates or improves upon existing solutions.

Fantom's innovative approach to blockchain technology focuses on enhancing transaction speeds, offering decentralized finance (DeFi) services, and utilizing a unique smart contract platform based on a directed acyclic graph (DAG). This is achieved through its modular architecture, which allows for customizable blockchain networks for digital assets, ensuring network security through a leaderless Proof of Stake protocol. The platform's features include fMint, enabling users to mint synthetic assets, including cryptocurrencies, national currencies, and commodities, and fLend, which facilitates lending and borrowing digital assets for trading and earning interest without losing exposure to held FTM. Additionally, fTrade offers a decentralized AMM exchange for Fantom-based digital assets. The OPERA Core Layer of the Fantom protocol maintains consensus across nodes in the Lachesis Protocol and uses DAG technology to confirm transactions, ensuring faster confirmation times and lower fees. Fantom's interoperability with other blockchain networks, such as Binance Chain, further expands its capabilities and potential use cases.

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Roadmap: Development milestones, past achievements, and future goals.

Fantom's roadmap has been marked by significant development milestones, past achievements, and ambitious future goals. Since its inception, Fantom has focused on addressing blockchain scalability and usability issues through its innovative technology. The network's key achievements include the launch of the Fantom Opera Chain, which is EVM-compatible and supports popular DeFi applications like Curve and CREAM. Fantom's integration with Binance Chain and Ethereum has enhanced its interoperability and ecosystem. Looking ahead, Fantom plans to introduce a new StateDB storage system and Fantom Virtual Machine (FVM) to enhance scalability and efficiency. These technical upgrades aim to further solidify Fantom's position as a high-performance smart contract platform. Additionally, the network aims to continue attracting developers and projects to expand its ecosystem. With a focus on growing its developer community and implementing new initiatives, Fantom is poised to achieve its future goals of becoming a prominent player in the blockchain ecosystem.

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4. Market Analysis of FTM

Target Market: Size, demographics, and behavior of the potential market.

The target market for Fantom (FTM) encompasses a diverse range of individuals and entities interested in decentralized finance (DeFi) services and innovative blockchain technology. Fantom's focus on scalability, security, and efficiency attracts users seeking faster transaction speeds and lower fees. The potential market size for Fantom includes cryptocurrency enthusiasts, developers, and investors looking for high-performance blockchain solutions. Demographically, the market for Fantom spans globally, appealing to a tech-savvy audience interested in cutting-edge blockchain projects. Behaviorally, the target market for Fantom is characterized by a preference for advanced technology, decentralized applications, and opportunities for financial growth within the cryptocurrency space. As Fantom continues to enhance its ecosystem, interoperability, and smart contract capabilities, it aims to attract a broader audience interested in DeFi, digital assets, and seamless blockchain experiences.

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Competitive Landscape: Analysis of competitors and FTM’s position in the market.

Fantom (FTM) operates in a competitive landscape with other cryptocurrencies, particularly those focused on decentralized finance (DeFi) and smart contract platforms. FTM stands out due to its unique features like the asynchronous Byzantine fault-tolerant (aBFT) consensus mechanism and the Lachesis Protocol, distinguishing it from competitors. The Opera mainnet, supporting Ethereum Virtual Machine (EVM) smart contracts, enhances compatibility with popular DeFi applications and streamlines smart contract deployment. Fantom's competitive edge is reinforced by its high transaction speed, low costs, scalability solutions, and a vision for global transaction compatibility and real-time data transfer infrastructure. In the market, Fantom competes with Layer-1 blockchains like Avalanche (AVAX), Chainlink (LINK), and Ethereum (ETH), all emphasizing DeFi, smart contracts, and interoperability. Recent performance indicates Fantom's strong market position, but ongoing development is vital to sustain and enhance its competitiveness.

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Market Trends: Current and anticipated trends that could affect FTM.

The market trends and factors that could influence Fantom (FTM) are characterized by a transition of ownership towards mid-term holders, favorable market sentiment, and technical indicators. Recent data reveals a decrease in FTM supply among traders, signaling a trend of accumulation by mid-term holders, which suggests increasing confidence in FTM's prospects. Furthermore, the Relative Strength Index (RSI) indicates strong investor interest, despite being overbought, and historical data shows that FTM's price has grown even in overbought conditions. Additionally, the launch of a cross-chain bridge with Ethereum and the introduction of liquid staking have positively affected FTM's price dynamics, with further developments anticipated to impact its value. Analysts predict a significant increase in FTM's price if it breaks through key resistance levels, with forecasts indicating a potential rise to $1.50 or more in the near term. These factors, combined with technical analysis and fundamental indicators, contribute to the positive outlook for FTM's price trajectory in the coming years.

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5. Team and Advisors

Backgrounds: Experience and expertise of FTM’s founding team and key members.

The Fantom (FTM) founding team and key members bring a wealth of diverse backgrounds and expertise to the project:

Ahn Byung Ik (Founder): Ahn Byung Ik, with a background in IT and Commerce, leads the Fantom team.

Michael Kong (CEO/CIO): Michael Kong, in the role of CEO/CIO, plays a pivotal leadership role within Fantom.

Quan Nguyen (CTO): Quan Nguyen, with a Ph.D. in Graph Visualization, contributes a robust computer science background to Fantom's technical aspects.

Michael Chen (CMO): Michael Chen serves as the Chief Marketing Officer, directing marketing strategies for Fantom.

Fred Pucci (Legal Counsel): Fred Pucci offers legal counsel to ensure compliance and oversee legal aspects of Fantom's operations.

Simone Pomposi (Head of Marketing): Simone Pomposi leads marketing efforts to enhance Fantom's visibility and brand presence.

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FTM’s Advisory Board: Influence and contribution of the advisors.

The Fantom Foundation benefits from notable advisors like Andre Cronje, the DeFi Architect and Founder of Yearn.Finance, who supports Fantom's multi-chain initiatives, such as the launch of Fantom's bridge to Ethereum, underscoring the project's emphasis on DeFi use cases.

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Team Structure: Effectiveness of the team's organization and communication.

The Fantom team's success in managing the project is evident in their strong communication and diverse expertise, which has been instrumental in handling the project's complexities. The team consists of a founder with an IT and Commerce background, a CEO/CIO, a CTO with a Ph.D. in Graph Visualization, a CMO, a Legal Counsel, and a Head of Marketing. This diverse skill set, combined with the guidance of advisors like Andre Cronje, has enabled the project to focus on DeFi use cases and achieve growth in the DeFi space. The team's organization and communication have been key factors in Fantom's success.

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6. FTM’s Tokenomics and Financials

FTM’s Utility: The purpose and use cases for FTM’s token.

The Fantom blockchain's native cryptocurrency, FTM, has multiple roles and applications within the network. It plays a critical part in securing the network via the Proof-of-Stake system, allowing FTM holders to stake their tokens for rewards and network governance participation. FTM is also used for network fees, such as transactions, smart contract deployment, and network creation, with low fees that help prevent malicious activities. Moreover, FTM holders can buy goods from major retailers on Shopping.io, fostering mainstream crypto adoption. Additionally, FTM is essential to Fantom's ecosystem, supporting dApp development, rewarding validators, and facilitating features like fMint, fSwap, and fLend in the DeFi space. FTM's utility encompasses staking, governance, network fees, trading, minting synthetic assets, and engaging with various DeFi protocols within the Fantom ecosystem.

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FTM’s Distribution: Allocation of tokens (e.g., team, advisors, public sale).

FTM token allocation comprises 32.75% for block rewards, 12.00% for advisors/contributors, 6.00% for the strategic reserve, 1.57% for the public sale, 11.69% for private sale II, 25.35% for private sale I, and 3.15% for the seed sale. This strategic distribution guarantees that a range of stakeholders, including the team, advisors, and participants in public sales, receive FTM tokens to bolster the network's advancement and expansion.

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Financial Model: Revenue Streams, Cost Structure, and Profitability Projections

Fantom (FTM) operates as a Layer-1 blockchain known for its distinctive architecture providing scalability, instant finality, and cost-effective network fees, making it an appealing choice for developers and businesses. The main revenue sources for FTM stem from transaction fees, smart contract deployment, and network creation within the Fantom ecosystem.

Fantom's cost structure encompasses expenditures related to research and development, marketing, partnerships, infrastructure, and maintenance to support the network's growth, security, and compatibility with other blockchain platforms.

The profitability outlook for Fantom is shaped by variables like market demand, adoption rates, competition, and regulatory landscape. The platform's capacity to evolve and innovate in response to industry changes will significantly influence its future profitability and competitive standing.

In essence, Fantom's revenue streams, cost structure, and profitability forecasts are intricately linked to its unique architecture, market positioning, and agility in adapting to evolving industry dynamics.

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Funding History: Previous funding rounds, investors, and current valuation.

Fantom (FTM) has raised a total of $2.11 million over two funding rounds, with the latest being a Growth Equity - II round on June 7, 2016. The funding was raised from two investors, including Nexxus Capital. Fantom's unique architecture offers scalability, instant finality, and low network fees, making it an attractive platform for developers and enterprises. The FTM token is used for transactions, smart contract deployment, and network creation within the Fantom ecosystem. As of April 9, 2024, FTM's current price is $1.008, with a 24-hour trading volume of $--. The maximum supply of FTM is 3.17 billion coins, and it ranks 49 by market cap. Fantom's FTM token can handle around 10,000 transactions per second (TPS), thanks to its unique consensus algorithm. FTM can be staked, with a staking period of 14-365 days and an APY ranging from 4.72 to 14.45 percent. FTM is valuable because the Fantom network is decentralized, secure, highly resistant to attacks, and ensures that the network remains censorship-free.

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7. FTM’s Community and Ecosystem

Community Engagement: Size, growth, and engagement levels of the community.

The FTM community engagement is significant, with a growing number of participants and high levels of engagement. The Fantom Foundation has implemented various strategies to foster community growth and engagement, such as hosting in-person and virtual events, maintaining active social media channels, and providing regular updates on network developments. The Fantom community is also actively involved in the network's governance, with community members participating in decision-making processes and contributing to the network's development. The Fantom community's engagement level is reflected in its active participation in discussions, providing feedback, and contributing to the network's growth. The Fantom Foundation's commitment to community engagement has helped establish a strong and vibrant community that continues to grow and contribute to the network's success.

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Partnerships: Strategic alliances and partnerships.

FTM has forged strategic partnerships to enrich its ecosystem. A significant collaboration is with Injective Protocol, focused on advancing the use of synthetic assets by connecting Fantom-based synths to Injective's DEX and developing novel derivative products. This partnership facilitates the seamless integration of synthetic assets across both platforms, broadening trading possibilities and accessibility to Fantom Finance offerings. Furthermore, Fantom has joined forces with Travala.com, enabling users to utilize FTM tokens for bookings, enhancing the protocol's utility and visibility. These partnerships underscore Fantom's dedication to innovation and network expansion through strategic alliances.

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Network Effects: The project's strategy for achieving and benefiting from network effects.

Fantom strategically leverages network effects to enhance its value and utility. By attracting more users and participants, FTM creates a self-reinforcing cycle that improves its market acceptability, liquidity, and value. The platform's unique architecture, low network fees, and instant finality make it an attractive choice for developers and enterprises, driving adoption and strengthening its network effects.

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8. Risks and Challenges

Market Risks: 

Exposure to market volatility and competitive threats.

FTM Market Risks: Exposure to Price Fluctuations and Competitive Challenges

Fantom (FTM) is a smart contract platform that confronts market risks, primarily from price volatility and competitive threats. Market volatility can result in substantial price fluctuations, affecting investor confidence and the overall ecosystem's well-being. Meanwhile, competitive threats from other blockchain platforms can impact FTM's market position and adoption rates.

For example, the FTM price experienced a rejection, plummeting approximately 30% following a premature breakout. This drop could potentially reach 25%, offering a buying opportunity around $0.6467. Furthermore, the Fantom price may undergo a significant 25% decline, signaling a potential market correction. These price fluctuations highlight the market risks associated with investing in FTM.

Fantom's unique architecture enables it to process around 10,000 transactions per second (TPS), making it an appealing platform for developers and enterprises. However, preserving this competitive advantage necessitates continuous innovation and adaptation to evolving market conditions.

In conclusion, FTM's market risks arise from price volatility and competitive threats. Despite its distinctive architecture and low network fees that attract developers and enterprises, maintaining its competitive edge requires ongoing innovation and adaptation to changing market conditions. Investors should be mindful of these risks and carefully consider their investment strategies.

SOURCES:

https://www.fxstreet.com/cryptocurrencies/news/fantom-price-prediction-a-25-correction-would-make-ftm-a-good-buy-202404022359 

https://www.coindesk.com/markets/2024/03/22/first-mover-americas-fantoms-ftm-outperforms-market-ahead-of-upgrade/ 

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FTM Technical Risks: Potential technical hurdles in development or deployment

Fantom (FTM) faces technical risks related to development and deployment, which can impact its functionality, performance, and security, influencing investor confidence and the ecosystem's overall health. Notably, the FTM price risks a pullback due to a divergence between its price and momentum, with a significant 230% growth in the past five weeks. This divergence, seen in the daily chart with higher price highs and lower relative strength index (RSI) highs, suggests a potential short-term bullish exhaustion and the likelihood of sideways or downward price movement.

Moreover, technical indicators suggest a substantial 90% drop risk for the FTM token, highlighting a significant potential technical hurdle for the platform. These challenges underscore the importance of understanding and managing technical risks in FTM's development and deployment processes to maintain investor confidence and platform stability. Investors should carefully assess these risks when considering investment strategies.

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Regulatory Risks: Legal challenges that could impact the project's viability.

Regulatory risks refer to potential legal challenges that could impact a project's viability, arising from changes in regulations or legislation affecting a security, company, or industry. Examples include the Softwood Lumber Agreement between Canada and the United States, which aimed to settle a longstanding dispute over subsidized Canadian lumber exports. Regulatory risks can significantly affect a company's bottom line, as seen in the case of Canfor Corporation, which faced higher legal costs due to the expiry of the Softwood Lumber Agreement. In the context of cryptocurrencies like Fantom (FTM), regulatory risks can stem from material technical risks associated with the cryptocurrency and its supporting practices or protocols, as well as legal and regulatory risks related to any pending, potential, or prior civil, regulatory, criminal, or enforcement actions. These risks can affect the value and use of FTM, and investors should be aware of them before investing in the cryptocurrency.

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Other Risks: Any other potential risks not covered above.

The FTM (Fantom) token's viability may encounter several hurdles, such as regulatory compliance, security risks, scalability problems, token economics and utility, community development, market volatility, and financial support. Ensuring regulatory compliance is vital to adhere to local rules and guidelines, particularly if tokens are classified as securities. Conducting security audits and implementing best practices are crucial to safeguard against potential threats. Scalability solutions, like layer-2 technologies, can help alleviate network congestion and enhance transaction speeds. A strong use case, active community engagement, and a long-term strategy are crucial for token adoption and market stability. Securing financial support and resources can be challenging, requiring the exploration of diverse fundraising methods and partnerships. By tackling these challenges head-on and seeking expert guidance, FTM can successfully navigate its development path with resilience and confidence.

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9. FTM’s SWOT Analysis

Strengths: Internal factors that give the project an advantage.

FTM, a decentralized cloud storage platform, has several internal and external factors that influence its performance.

Strengths:

• Strong brand image

• Patented proprietary products

• Diversified business

• Large organizational size

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Weaknesses:

• Dependence on the Internet

• Minimal physical presence

• Opportunities:

• Tap into mobile users

• Expand Google Fiber coverage

• Penetrate markets with consumer electronics

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Threats:

•Tough competition from companies like Yahoo and Apple.

• Imitation of products by competitors

To enhance its performance, FTM should prioritize increasing its physical presence and addressing competition. This can be achieved by opening more physical stores and developing unique product and service strategies to distinguish itself from competitors.

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10. How FTM works with TheStandard.io 

Possible collateral type: 

The Standard protocol allows users to leverage FTM as collateral to secure loans in EUROs and, in the near future, USDs, without any interest charges. This non-custodial system ensures a secure and user-controlled experience.

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11. Conclusion and viability score

Final assessment and Score

The FTM token within the Fantom blockchain ecosystem has demonstrated substantial potential for sustained growth. Projections indicate a peak price of $4.59 by 2030, with minimum and average prices estimated at approximately $3.19 and $3.89, respectively. Fantom's innovative architecture, highlighted by features like Lachesis and Opera, delivers rapid, secure, and cost-effective platforms for decentralized applications (dApps), positioning it as an appealing choice for developers. The native utility token, FTM, serves various functions including staking, governance, payments, and network fees, with a total supply of 3.175 billion FTM coins and 2.5 billion in circulation as of March 2021. Fantom's staking incentives and adaptable staking model present an attractive opportunity for users. Furthermore, Fantom's DeFi suite, encompassing fUSD, fSwap, and fLend, offers diverse avenues for user engagement within the ecosystem. Given these factors, the FTM token emerges as a promising long-term investment option with a favorable outlook.

SOURCES:

https://watcher.guru/news/fantom-price-prediction 

https://www.gemini.com/cryptopedia/fantom-wallet-fantom-crypto-ftm-token  

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