Thread by @francescoweb3

From Gas to Gold ⛽ 💸

Fantom's Gas Monetization Incentive
to Drive Developer Adoption

💻 ⬇️

After a rollercoaster of emotions, Fantom seems to be determined to reclaim its place among the L1 giants 🔥 🔵

Andre Cronje is back at work on Fantom and has recently shared the long-term vision for the protocol ⬇️

https://twitter.com/AndreCronjeTech/status/1662762820155342848

Gas Monetization is one of the most awaited updates for Fantom, which just went live on May 28th ⛽

The governance proposal was first approved in January 2023, with 99.8% of the votes ✅

https://twitter.com/FantomFDN/status/1610713403215036443?s=20

This is one of a series of incentives that Fantom is building in order to attract developers and have them stick to develop on the ecosystem 🌐

What is Gas Monetization? 🤔

Gas monetization is an incentive to reward high-quality dApps for the fees they generate. The program will provide them with a 15% kickback on all the gas fees generated 🆓 💸

Where does this money come from?
You may wonder.

This reward is made possible by the fact that the FTM burn rate will be reduced from 20% to 5% 🔥

dApps are literally getting compensated for the value they create on the Fantom network 💰 💸

On the one hand, this incentivizes development, which is exactly what the Fantom is trying to achieve.

“By offering this monetization opportunity, Fantom hopes to attract and retain high-grade talent, ensuring a healthy and sustainable network. Both builders and validators will be recognized and rewarded for their roles on Fantom”.

But on the other hand, this mechanism could be targeted by spam dApps and malicious actors trying to take advantage of it 😈 👀

To prevent exploits and be eligible for Gas Monetization dApp must have:

🚨 Completed at least 1m transactions
🧬 Been live on Fantom for at least 3 months
📖 These criteria are valid for each individual smart contract on the Fantom mainnet.

These initial criteria might be subject to change during the program, based on their effectiveness.

Nonetheless, as specified in their Terms & Conditions:

"Fantom Foundation reserves the right to suspend rewards to participating dApps for any reason deemed necessary at its sole discretion, including fraudulent user activity or the overall well-being of the Fantom ecosystem" 👀

Once approved in the program dApps will begin to receive 15% of the gas fees they generate.

The FTM tokens received are unlocked and can be used as the dApps see fit.

BUT..

What happens to the 15% share of gas fees made by dApps that do not participate in the Gas Monetization Program?
(Ineligible Transactions) ⛓️

💰 Used to increase bonuses for participating dApps
🏗️ Used to support public good infrastructure subsidies (e.g. to RPC providers)
💸 Gitcoin matching grants or the Ecosystem Support Vault
🤝 Rewards Content Creators
🔥 Sent to a burn address

Gas Monetization Stats 📊

Since Gas Monetization went live, there are already 10,525 FTM available for distribution, with a total generated amount of 11,038 FTM.

There’s one main project generating the majority of rewards: @StargateFinance.

Staragate is an omnichain protocol, that allows users & dApps to transfer native assets cross-chain while accessing the protocol’s unified liquidity pools.

All stats are sources from:

earngas.fantom.network

State of Fantom 🤔 📊

Since we are talking about a new incentive to attract developers and activity, let’s take a look at the on-chain analytics.

What’s the situation on Fantom?

If we search for Fantom on the @Artemis__xyz database (which may not be totally accurate), it is only ranked 88th for Developers Activity.

The data shows about 300 weekly commits, with 30 weekly active developers 📉

Fantom currently has an average of 50k daily active users, from @tokenterminal 💻

We can also observe how the protocol Revenues are not exactly what we would expect 📉

Hence we can understand the reasoning behind incentives for developers 😓

At the same time, most of the L1 ecosystems have played out as simple rotations, with many struggling to find true traction.

It is pretty tough to gather momentum again, once you seemingly lost it.

Nonetheless, architecturally Fantom is very developer friendly ⬇️

Food for Thought 🍕

The role of incentives in game theory and blockchains is for me one of the most fascinating aspects.

I believe that Gas Monetization is an immediate and very interesting development to provide a source of monetization for dApps on Fantom.

It will be interesting to monitor the analytics to see if this effectively drives an increase in the development of the protocol.

Perhaps we could see some established dApps from other L1s and L2s to bridge over to Fantom, attracted by the incentives.

The incentive is also aligned with the objective of having high-quality dApps because they will need to fulfil the eligibility criteria and generate traffic from a sustainable product that positively contributes to the Fantom ecosystem.

I’ll be following Fantom’s rebirth since I am particularly interested also in other features such as Social Authentication.

But that’s another story (or thread) 👀

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