The Fantom blockchain experienced mixed performance in the second quarter of the year, as key financial metrics cooled amid a broader cryptocurrency market downturn and the Fantom Foundation’s announcement to rebrand as Sonic Labs, according to a new report from data intelligence firm Messari.
After an impressive first quarter, Fantom’s circulating market cap saw a dramatic 41% decline quarter-over-quarter (QoQ) from $2.8 billion to $1.7 billion. Despite this, the token’s market cap remains 94% higher year-over-year (YoY) compared to the second quarter of 2023.
Revenue, which is measured by gas fees collected by the network, fell by 42% QoQ, from 1.8 million FTM to 1.0 million FTM. In U.S. dollar terms, this revenue decreased by 38% QoQ, from $1.2 million to $0.8 million. This decline followed a spike in Q3 2023 due to the activity surrounding non-fungible token (NFT) inscriptions. However, Messari predicts a revenue rebound as on-chain activity increases across the broader cryptocurrency market.
Fantom’s token economics saw significant changes during the second quarter. The Ecosystem Vault and Gas Monetization program, introduced in Q4 2022, reduced the burn rate of transaction fees from 30% to 5%, reallocating the remaining 25%. By the end of Q2, the circulating supply of Fantom’s native token FTM reached 2.8 billion, with an annualized inflation rate of 3%, up 25% QoQ.
On-chain activity for Fantom also slowed during the second quarter. Daily transactions averaged over 223,000, a 10% decrease QoQ from 247,000. Daily active addresses fell 21% QoQ, settling at 31,900, though there was an upward trend towards the end of the quarter. New address growth also decelerated, dropping 47% QoQ to an average of 5,000 per day. Despite these declines, the number of active validators on the network increased. Following a governance proposal that lowered the staking requirement from 500,000 FTM to 50,000 FTM, the number of active validators grew by 6% QoQ to 58, with 14 validators having less than 500,000 FTM self-staked.
Staked FTM saw inflows for the second consecutive quarter, increasing by 5% QoQ to 1.3 billion tokens. However, due to the token’s price depreciation, the total dollar value of staked FTM decreased by 39% QoQ to $780.4 million. The total value locked (TVL) in decentralized finance (DeFi) applications on Fantom also declined, down 28% QoQ to $91.2 million, ranking it 42nd among blockchain networks. Nevertheless, TVL denominated in FTM increased by 22% QoQ, indicating capital inflows despite the token’s price decline.
At the time of this report, FTM was trading at $0.3345, a slight increase of 1% over the past 24 hours. However, looking at the monthly timeframe, the coin has seen a 27% decrease amid the broader market decline.
