Fantom’s liquidity mining program is once more showcasing the power incentives can have in markets as total value locked in the smart contract chain’s DeFi projects has nearly doubled in the three days since offering token rewards.
TVL on Fantom soared by 80% to $990M from $547M on Aug. 29, the day before the liquidity mining program started, and two projects are largely responsible for the increase. Curve represents 24% of assets locked with $235M, while SpookySwap holds 22% with $220M.
The Fantom Foundation on Aug. 30 announced that it would distribute 370 million Fanton tokens (FTM) — or $346M — to DeFi projects that maintain more than $5M in TVL.
Then, it announced this higher tier to entice projects to go big. Early Sept. 1 the Foundation put out a special challenge to developers building decentralized finance (DeFi) applications on its proof-of-stake blockchain: attract more than $200 million in total value locked (TVL) on Fantom and receive 12 million FTM, distributed over a year to the project’s liquidity providers.
“At the risk of stating the obvious, If FTM prices continue upward, this could be the first $1B+ incentive program,” John Morris, the head of Fantom’s US operations told The Defiant via email.
FTM has gone nearly exponential since the start of the year as well, from $0.016 on January 1 to $0.936 as of Wednesday afternoon, based on Messari data. To hit that $1B mark, it would need to roughly 3X from here.
Based on FTM prices late Wednesday afternoon, the challenge would mean approximately $1M in monthly rewards to liquidity providers on projects with a huge TVL.
Curve, a decentralized exchange known for efficiently swapping assets with like values, didn’t have enough staked on Fantom when the challenge was made, but its supporters got there quickly.
This new tier may not be the last update to the larger distribution program. “The team may expand the reach of the incentive program to include other important blockchain arenas like NFTs and Gaming,” Morris wrote.
Over the Threshold
According to Curve Market Cap, an unofficial Curve newsletter, no project had $200 million in TVL when the new incentives were announced, but Curve had $183 million. The challenge quickly pushed it over the $200M threshold.
Curve’s creator, Michael Egorov, told The Defiant via email that Curve launched on Fantom a while ago. “Fantom actually was the first non-Ethereum chain we launched at, but they decided to do FTM incentives just now (in addition to CRV incentives we’ve got there),” Egorov said.
As of late Wednesday afternoon Eastern time, DefiLlama shows Fantom holding $990M in assets locked on behalf of various DeFi protocols. Only Curve and, SpookySwap, another DEX, are above $200M.
The third largest Fantom project, Beefy Finance, a yield optimizer, is far behind at $131M.
As of now, Curve only has three pools on Fantom, compared to over 40 on Ethereum, where its TVL is $12.3 billion.
Big Year on Fantom
Fantom is not new. It had its mainnet release in December 2019, according to Messari. This year has been a dramatic one for the blockchain, however. It had less than $3M in TVL in April and is pushing $1B now.
Egorov said, “Fantom is definitely a legit blockchain which, unlike many, didn’t spend much on marketing.“The highest tier of liquidity mining incentives were leaked on Twitter by Yearn Finance creator Andre Cronje slightly before Fantom officially announced it. The Yearn ecosystem has consistently been one of the biggest users of Curve, and Cronje has been actively involved in Fantom’s engineering since long before he became well known in DeFi, according to his LinkedIn page.