FTM, the native token of smart contract platform Fantom, has gained 5% over the past week, reaching $0.6850 on October 2. The rally is part of a recovery trend that began on September 6, with FTM gaining more than 70% over the past 30 days.
Data from TradingView shows that the price of Fantom (FTM) has increased from a low of $0.3574 on September 6, rising by 103% to hit a four-month high of $0.7642 on October 1.
FTM’s trading volume has also increased in tandem with the price increase. On October 1, FTM’s spot trading volume reached over $450 million, up 77% from the previous week and about 450% from the previous 30 days. FTM’s market capitalization is now at $9.7 million, cementing its position as the 46th largest altcoin globally, according to data from CoinMarketCap.
Let’s take a look at the factors behind FTM’s recent strong growth momentum.
FTM Price Surges Ahead of Sonic Upgrade and S Rebrand
The FTM price surge is fueled by community anticipation for the upcoming upgrade, dubbed Sonic, which is expected to launch in November or December.
The new Sonic Chain is expected to significantly improve the network’s performance through the introduction of a new Fantom Virtual Machine (FVM), an optimized Lachesis consensus mechanism, and a Carmen database storage system.
After this upgrade, the Fantom blockchain will be able to process more than 2,000 transactions per second (TPS), with a transaction completion time of just one second, a significant improvement over the current 30 TPS.
In preparation for this change, the Fantom Foundation rebranded Sonic Labs on August 1. The FTM token will be replaced by a new token $S, which is expected to be completed by the end of 2024.
The S token will have several differences from FTM, including an initial distribution via airdrop, a simplified staking process, and new incentive programs for users.
In May, the Fantom community approved a proposal to convert FTM tokens to S tokens at a 1:1 ratio during the transition to Sonic Chain.
TVL Growth and Network Activity
The upcoming upgrade has reignited investor interest in Fantom’s decentralized finance (DeFi) ecosystem.
Data from DefiLlama shows that the total value locked (TVL) in Fantom’s DeFi applications has increased by 55% over the past month, reaching $104.01 million. While this is a significant increase, it is still quite modest compared to the peak of $7.93 billion in March 2022.
The TVL growth reflects increasing user engagement with the blockchain, as evidenced by the increase in daily active addresses (DAA). Data from Gassnode shows that the number of DAAs on the Fantom blockchain increased by 162% from September 1 to October 1.
In addition, the number of daily transactions has also increased significantly, from 217,487 to 361,345 this month, according to data from FTMScan.
The increase in both TVL and network activity is a sign of growing user engagement with the blockchain, increasing demand for the FTM token. High demand is often a signal of strong price growth in the future.