A New Fund To Finance The Fantom Ecosystem?

The Fantom community has voted in favor of a governance proposal to create an ecosystem support fund to finance projects from a percentage of transaction fees currently burned.

A new proposal to develop the ecosystem

The vote, which began on July 5, was approved almost unanimously by the participants. Details on the voting page show that 99.75% of all votes cast were in favor of this proposal. The vote was due to end on October 3, but there was a provision for the vote to close early if it exceeded the required quorum of 55%.

Fantom will finance this fund with 10% of its transaction fees. This 10% represents one-third of the network's 30% burn fee. Fee burning in crypto involves destroying transaction fees instead of using them to reward validators.

This process can help reduce the total supply of a token since part of its supply is constantly being burned. This allows in particular to maintain a certain buying pressure and to push the price upwards. It is a process used by many blockchains and crypto projects.

By financing this fund for the development of the ecosystem, Fantom's burn rate will be reduced to 20%. This decrease in burn rate reduces the amount of MTF that will be destroyed each year. Fantom's Special Fee Contract, which distributes rewards to Fantom stakers and delegates, will be responsible for safekeeping the funds in this “safe”.

With the vote passed, projects seeking grants can now apply for funding. These requests will be made through proposals submitted on Fantom's governance portal, after which the community will vote on whether or not to fund the project.

What news for Fantom?

According to many observers, Fantom is one of the blockchains with the greatest potential. Its token, the FTM had a remarkable year in 2021, going from $0.02 at the start of the year to more than $3 at the start of 2022. This is one of the best performances for a crypto project Last year.

Since then, due to complicated market circumstances but also the departure of its historic founder André Cronje, the token has experienced a massive drop and has stagnated at around $0.35. This represents a fall of more than 90%. It now ranks 52nd among the largest capitalizations in the sector, after having been in the top 10 according to CoinMarketCap.

Fantom had notably developed massively thanks to a number of very popular decentralized finance protocols. Apps like Spookyswap or Beefy were hugely successful with investors before also suffering a drop in traffic.

Fantom recently announced the implementation of an audit tool called Watchdog. The latter improves the security of smart contracts on the Fantom mainnet and therefore the security of the blockchain. Another recent announcement is the integration of one of the main layers 2 of Ethereum, Boba Network on Fantom.

News that will benefit developers of both ecosystems and will allow the deployment of many new decentralized applications in the future.
Fantom also announced the integration of Llamapay, a tool developed by DefiLlama teams to automate crypto payments. Llamapay allows employers and protocols to automate transactions.

Fantom is therefore continuing its development despite the difficult market conditions that we are experiencing. The price of the token has returned to a range between $0.20 and $0.45. It will need to break through this resistance on the upside to hope to resume its forward run. For now, we are witnessing a consolidation since May and nothing seems to be pushing the price up.