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3 explanation why Fantom (FTM) value continues to rally to new all-time highs

02/22/2021

Previously month, Fantom value elevated 1,570% as governance options and a cross-chain bridge to Ethereum strengthen its DeFi aspirations.

Interoperability has emerged as the recent matter in February as platforms like Binance Good Chain and Polkadot work on constructing Ethereum community bridges that permit customers to flee excessive transaction prices and community congestion.

Fantom (FTM) is the most recent venture to obtain a lift by providing cross-chain performance with Ethereum, and information from Cointelegraph Markets and TradingView reveals a 1,570% improve in FTM value from $0.025 on Jan. 23 to a brand new excessive of $0.43 on Feb. 21.

FTM/USDT 4-hour chart. Supply: TradingView

Three basic causes for Fantom’s present rally are the discharge of a cross-chain bridge between Ethereum and Fantom, the roll-out of on-chain governance options and the power to stake tokens on the community whereas nonetheless accessing their worth to be used within the decentralized finance ecosystem.

Yearn.finance helps facilitate a cross-chain bridge to Ethereum

On Feb. 21, Fantom, with the assistance of Andre Cronje of Yearn.finance, introduced the event of a cross-chain bridge with Ethereum that permits customers to switch ERC-20 tokens to Fantom to “get pleasure from quick and low-cost transactions.”

In accordance with the group, transactions on Fantom “are confirmed in 1-2 seconds” and “price a fraction of a cent.” The group additionally promised that cross-chain performance with different chains will likely be quickly to observe.

VORTECS™ information from Cointelegraph Markets Professional started to detect a bullish outlook for FTM on Feb. 21, previous to the latest value rise.

The VORTECS™ rating, unique to Cointelegraph, is an algorithmic comparability of historic and present market situations derived from a mixture of knowledge factors together with market sentiment, buying and selling quantity, latest value actions and Twitter exercise.

VORTECS™ rating (inexperienced) vs. FTM value. Supply: Cointelegraph Markets Professional

As seen on the chart above, the VORTECS™ rating for FTM reached a excessive of 74 early on Feb. 21, shortly earlier than the worth broke out to a brand new all-time excessive.

On-chain governance boosts neighborhood involvement

One other one of many standard themes of the present bull market is the power of tokenholders to take part within the improvement of the ecosystem through a governance mechanism.

On Jan. 12, the Fantom Basis unveiled the discharge of on-chain governance for the Fantom community, changing into one of many first chains to help such functioning for a totally decentralized blockchain.

By way of the governance mechanism, every FTM token equals one vote, and any tokenholder can submit a proposal on methods to enhance the ecosystem, in addition to vote on any pending proposal.

Proposal submissions price 100 FTM, which is burned in the course of the operation, and voting prices a fraction of 1 FTM.

The Fantom voting system differs from different governance platforms, because it gives a wide range of proposal templates and the power to specific the diploma of settlement with the proposal versus casting a easy “sure” or “no” vote.

Fantom plans to combine staking and DeFi options

A 3rd motivating issue behind the latest value rise of FTM is the introduction of liquid staking, or the power to stake tokens on the community and concurrently entry the worth of the token to be used in DeFi.

On most proof-of-stake networks, tokenholders have to decide on between staking their tokens to safe the community and earn rewards or surrender these rewards to entry the worth of the token as collateral or for buying and selling functions.

FTM holders are in a position to stake their tokens on the community and mint an equal quantity of sFTM, which may then be used as collateral on the Fantom Finance DeFi platform.

Offering tokenholders with an additional approach to earn a yield has proved to be a beautiful incentive, and after FTM was listed on SushiSwap and 1inch on Jan. 25, its value exploded from $0.05 to $0.26 over the subsequent three days.

Since then, FTM has been added to Coinbase Custody and the Ledger {hardware} pockets, in addition to being chosen by the Ministry of Digital Transformation of Ukraine because the platform for the alternate of mental property.

Every of those developments helps the sturdy breakout in FTM value, and the upcoming public launch of its Ethereum cross-chain bridge has positioned Fantom in a superb place to obtain a brand new degree of DeFi engagement. Moreover, the prospect of transaction charges that price lower than $0.01 might show to be an attractive incentive for crypto merchants and will result in liquidity migration. 

The views and opinions expressed listed here are solely these of the creator and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, it’s best to conduct your personal analysis when making a call.