Thread by @killakween444

1/ The L1 everyone faded: a thread 🧵

2021 has been a good year for L1s. Most L1s outperformed ETH with ease.

But amidst all of the crazy returns, there is 1 that has been (relatively) overlooked imo. That is, #Fantom $FTM.

2/ What is $FTM

Everyone is familiar with the blockchain trilemma, being:
-Scalability
-Security
-Decentralisation

Every blockchain tries to fix these issues but most end up with trade-offs. $SOL faces centralization issues while $ETH faces scalability issues.

3/ $FTM aims to be all 3 with their Asynchronous Byzantine Fault Tolerant (aBFT) consensus algorithm, Lachesis.

This involves being:
-Asynchronous
-Leaderless
-Byzantine Fault Tolerant
-Final

Let’s look at what this means.

4/ Asynchronous refers to the ability of the chain to process different transactions at the same time. This increases the throughput of the chain vs synchronous chains like ETH and BTC.

This allows $FTM to achieve an estimated TPS of 4-5k (10k on testnet).

5/ This is achieved through the Directed Acyclic Graph (DAG) structure which is a pretty complicated concept imo. But in essence, $FTM isn’t a traditional chain where blocks are joined one after another. The network can be seen as a group of computers constantly communicating...

6/ allowing all computers to form their version of events. Think of it like a group of students spreading a rumour in a school. As the students mingle and communicate, eventually all the students will be aware of the rumour.

7/ Leaderless refers to no single node having to take on a special role securing the network. This is unlike in Proof of Work or in chains that utilise round robin. Each node independently forms its version of events on the chain.

8/ Byzantine Fault Tolerant is quite self-explanatory if you’re familiar with the famous Byzantine General’s Problem
(en.wikipedia.org/wiki/Byzantine…). This means that even if a significant number of nodes are bad actors, the honest nodes can still reach the right outcome.

9/ Final refers to the ability of $FTM to reach finality almost instantly. Due to the DAG structure, $FTM can achieve finality within 1-2s vs $SOL at 10-12s and $AVAX at ~3s.

But wait, that’s not all…

10/ Rn, the team at @FantomFDN are finalising development of the Fantom Virtual Machine (FVM), to rival the Ethereum Virtual Machine (EVM) which all EVM chains are built on. This is expected to make the chain faster and cheaper 👀

But what is good tech without any actual usage?

11/ $FTM current has over 1.4 million unique addresses on chain today and sees about a 4-8k increase daily.

12/ $FTM has also achieved a respectable TVL of $4.77 billion, which puts them right about 8th on DefiLlama. Not to mention, $FTM currently sits at a Mcap/TVL of 0.87 which is plenty low in comparison to its L1 counterparts.

13/ The ecosystem is also pretty rounded with:
-Money market: @CurveFinance, @GeistFinance
-AMMs: @SpookySwap , @SpiritswapTR
-Farms: @tombfinance
-Optimisers: @Reaper_Farm, @beefyfinance

14/ Not to mention, gas on $FTM is pretty dang cheap. Transactions go for about 1-2 cents usually, although like most chains, congestion can cause gas to spike.

Who doesn’t love cheap gas?

15/ Tokenomics
FTM is inflationary (as most L1s are) with a current circulating supply of 2.5b tokens but has a capped maximum supply of 3.18b tokens.

It is estimated that the remaining supply will take about 1.5-2 years to distribute (affected by governance decisions).

16/ Team
Looking through Fantom’s team, I’m sure there’s one name that stands out to anyone active in the Defi scene. The man himself, @AndreCronjeTech.

For those unfamiliar, Andre is a heavyweight in Defi, most known for his role in developing the legendary @iearnfinance.

17/ He is also responsible for multichain.xyz and keep3r.network among many other projects.

Basically, man's a gigabrain and I'm not one to bet against the gigabrains.

18/ In terms of real world usage, Fantom is also partnered with several governments and companies in the Middle East and Asia for IT enterprise solutions. (fantom.foundation/partners/) Not to mention, preparation for CBDC use cases (fantom.foundation/solutions/fant…).

19/ However, no analysis is complete without the bearish angle tho.

Let’s look at some things I don’t like about FTM.

20/ A key element to ecosystem growth is CEX support. SOL had FTX, BSC had Binance, and ETH had, well, just about everyone. In my experience, it’s pretty hard to get $FTM onto the Fantom Opera chain and this increases friction in adoption.

21/ $FTM launched a $370m incentive program back in late August. But this grant went to the devs on Fantom, not that there’s anything wrong with that. But that would mean that yields were less attractive compared to chains like $AVAX or $MATIC, which gave generously to users.

22/ End of the day, this is #nfa and you should always #DYOR. But my bags are loaded. LFG.