FTM, the native token of the Fantom layer-1 smart contract platform, rose 5% in seven days to $0.6850 on Oct. 2. This is part of a rebound that began on Sept. 6 and has seen the price rise more than 71% over the last 30 days.
According to data from Cointelegraph Markets Pro and TradingView Fantom (FTM) price rose from a low of $0.3574 on Sept. 6, climbing as much as 103% to a four-month high of $0.7642 on Oct. 1.
FTM/USD daily chart. Source: TradingView
Trading activity has also moved in tandem with FTM’s price surge. FTM’s spot trading volumes topped $450 million on Oct. 1, rising by 77% over the last seven days and approximately 450% over the last 30 days. Its market capitalization is currently $9.7 million, cementing its position as the 46th largest cryptocurrency in the world, per data from CoinMarketCap.
Let’s look at the factors behind FTM’s recent bullish momentum.
FTM price rallied ahead of the Sonic Upgrade and rebrand to S
The FTM price rally follows the community’s excitement for the upcoming update known as the Sonic upgrade, which is scheduled for November or December.
The new Sonic chain is expected to significantly enhance the network’s performance by introducing a 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 finality time of roughly one second. This will be a substantial improvement from the current 30 TPS.
In line with these preparations, the Fantom Foundation rebranded Sonic Labs on Aug. 1. The change of the native token FTM to the new token ticker $S is expected to happen by the end of 2024.
Fantom Foundation rebrands to Sonic Labs. Source: Sonic Labs
The S token will differ from FTM in several aspects including initial community distribution through an airdrop, streamlined staking processes and new user incentive programs.
In May, the Fantom community approved a proposal to migrate their FTM tokens to the S token at a 1:1 ratio during the migration to the Sonic chain.
Related: 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.
Data from DefiLlama shows that the total value locked (TVL) in Fantom’s DeFi applications has risen by 55% in the last month to $108.8 million. However, this is a mere shadow of its peak of $7.93 billion recorded in March 2022.
Total value locked on Fantom. Source: DefiLlama
This increase in TVL is a sign of increasing user interaction with the blockchain as evidenced by an increasing number of daily active addresses.
Daily active addresses (DAA) refers to the number of unique addresses that were involved in a successful transaction on a given blockchain over a specific time period.
Data from market intelligence firm Gassnode reveals that DAAs on the Fantom blockchain increased 162% between Sept. 1 and Oct. 1.
Number of DAAs on FTM. Source: Glassnode
The number of daily transactions has also significantly increased, rising by 66% from 217,487 to 361,345 month-to-date, 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 growing demand for the FTM token. High demand is usually a precursor for substantial price growth.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.