Fantom is up 60% in the last month, despite a significant drop in the cryptocurrency market as a whole. In only one month, the platform’s total worth has increased by more than $8 billion. Fantom is inexpensive as compared to Avalanche, Solana, and Ethereum in terms of total value locked vs market cap. New users and transactions on the platform have increased during the last year, and new apps are being developed.
Fantom (FTM) has been a novelty in the crypto markets over the last month, increasing while Bitcoin, Ethereum, and the majority of other big cryptocurrencies have sold down and fallen deep into correction territory. So, what has boosted Fantom to defy the trend and continue to outperform? Fantom users are optimistic and feel it deserves a spot in the portfolios of crypto investors seeking new assets in 2022.
Following The Total
When it comes to decentralised finance (DeFi) assets, the ancient saying “follow the money” could as well be “follow the entire value locked.” Total value locked (TVL) is a measure of the value of all assets locked in or committed to a DeFi platform such as Fantom. The more value that is locked within a network, the healthier it is and the more value investors see in it. Fantom’s TVL increased from less than $4 billion on December 22, 2021, to more than $11 billion at the time of writing.
Investors can determine if an asset is cheap or overpriced by dividing the entire value locked on a platform by the coin’s market capitalization. Dividing the market capitalization by the total value locked yields a figure comparable to calculating the price-to-book value of a typical firm such as a bank. In conventional finance, book value is the worth of a firm if it were liquidated, hence investors use price-to-book value as a valuation metric.
Fantom has a current TVL of about $11 billion vs a market cap of $5.86 billion, giving it a value of roughly 0.5. To compare, Ethereum has a TVL of $120 billion vs a market valuation of $300 billion, resulting in a “price-to-book value” of 2.5. Similarly, other significant layer-1 cryptos such as Avalanche (1.8), Terra (1.6), and Solana (3.9) all have greater values than Fantom, indicating that it is undervalued in comparison to these coins.
The use of Fantom has increased dramatically in the last year. There were just 5,000 unique Fantom wallet addresses in January 2021. There will be around 1.5 million by the end of 2021. In January of this year, Fantom completed around 4,000 transactions every day. This figure has risen by 18,650 percent to 750,000 transactions per day as of last month. The Fantom blockchain is gaining popularity as it has progressed from an obscure currency to a thriving ecosystem.
Fantom’s Background Expands
On the Fantom platform, a slew of new apps has been developed. The introduction of decentralised apps (dApps) contributed to Ethereum becoming the $300 billion assets that it is today, as developers and artists flocked to its ecosystem, adding excitement and value. We could be in the early phases of it with Fantom. Decentralized investing platform Beethoven X, decentralised exchange SpookySwap, and stable coin platform Tomb Finance are among the Fantom applications.
Fantom has stood out and outperformed the other main cryptocurrencies over the last month, holding up pretty well during a significant crypto downturn over the last week, and I believe it will continue to do so. When total value locked to market cap is compared to Fantom, it appears inexpensive. As more investors learn about Fantom and this price, investor interest should rise, especially as crypto investors are constantly looking for the next Solana or Avalanche. Fantom is here to stay, as evidenced by rising usage and a robust ecosystem of apps. I believe it will be one of the major crypto winners in 2022.