FTM, the native token of the Fantom layer-1 smart contract platform, rose 5% in seven days to $0.6850 on October 2. This is part of a rebound that began on September 6 and saw prices rise by more than 71%. During the past 30 days.
The price rose 103% from a low of $0.3574 on September 6 to a four-month high of $0.7642 on October 1, according to data from Cointelegraph Markets Pro and TradingView Fantom (FTM).
FTM/USD daily chart. source: TradingView
Trading activity also moved in tandem with the price surge in FTM. FTM’s spot trading volume surpassed $450 million on October 1, increasing 77% over the past 7 days and approximately 450% over the past 30 days. Its market capitalization currently stands at $9.7 million, cementing its position as the 46th largest cryptocurrency in the world, according to data from CoinMarketCap.
Let’s take a look at the factors behind FTM’s recent bullish momentum.
FTM price rebounds ahead of Sonic Upgrade and rebrands to S
The FTM price rise follows community excitement about the upcoming update, known as the Sonic upgrade, scheduled for November or December.
The new Sonic chain is expected to significantly improve network performance by introducing the new Fantom Virtual Machine (FVM), optimized Lachesis consensus mechanism, and Carmen database storage.
After this upgrade, the Fantom blockchain will be able to process over 2,000 transactions per second (TPS) with a final time of approximately 1 second. This will be a significant improvement over the current 30TPS.
In line with these preparations, the Phantom Foundation rebranded Sonic Labs on August 1. The change from the default token FTM to the new token ticker $S is expected to occur by the end of 2024.
The Phantom Foundation rebrands to Sonic Labs. source: sonic lab
S Tokens differ from FTM in several aspects, including initial community distribution via airdrop, a streamlined staking process, and a new user incentive program.
Last May, the Fantom community approved a proposal to migrate FTM tokens to S tokens at a 1:1 ratio during the migration to the Sonic chain.
relevant: Fantom Unveils Sonic Foundation for New Sonic Chain
Increased TVL and network activity
The impending upgrade has revived investor interest in Fantom’s decentralized finance ecosystem.
Total value locked (TVL) in Fantom’s DeFi applications increased 55% last month to $108.8 million, according to data from DefiLlama. However, this is only a shadow compared to the peak of $7.93 billion in March 2022.
Total value locked in Fantom. Source: DefiLlama
This increase in TVL is a sign of increasing user interaction with the blockchain, as evidenced by the increasing number of daily active addresses.
Daily Active Addresses (DAA) refers to the number of unique addresses that have participated in successful transactions on a specific blockchain over a specific period of time.
DAA on the Fantom blockchain grew 162% between September 1 and October 1, according to data from market intelligence firm Gassnode.
Number of DAAs in FTM. Source: Glassnode
The number of daily transactions has also increased significantly, rising 66% from 217,487 per month to now 361,345, according to data from FTMScan.
This increase in TVL and network activity is a sign of increasing user interaction with the blockchain, which leads to increased demand for FTM tokens. High demand usually portends significant price increases.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.