Phantom (CRYPTO: FTM) is under the radar right now, but probably not for long. Crypto has experienced an incredible ascent over the past year. The coin sold for $ 0.02 a year ago. Now it is trading at $ 3 a coin.
Fantom skips because it’s a Layer 1 protocol with super-fast speeds, like Solana (CRYPTO: SOL). In 2021, the value of these two coins soared to 14,000% and 11,000%, respectively. Fantom is much smaller with a market cap of $ 7 billion compared to Solana’s $ 43 billion. I think part of this gap is due to the fact that Solana, unlike Fantom, can be bought and sold on Coinbase (NASDAQ: COIN), the world’s largest crypto exchange. (You can purchase the coin on another exchange, Gemini.)
I expect the smaller coin to surpass Solana again in 2022. Here’s why you might want to own the Fantom coin.
1. It is perhaps the fastest blockchain on the market
Last year the crypto markets went crazy over Ethereum (CRYPTO: ETH) competitors. Ethereum is the major platform for the crypto universe. But interest in crypto is skyrocketing and the Ethereum network is creaking under the pressure. The “gas fees” (the cost of validating a transaction on the Ethereum blockchain) reached $ 300 at one point. In comparison, a transaction on Fantom or Solana costs a fraction of a penny.
Why are the fees so low? Speed. Solana carries out an average of 50,000 transactions per second, compared to 14 per second on Ethereum. Fantom is not as fast as Solana, but it is still ahead of Ethereum; in a test carried out in 2018, its blockchain processed 25,000 transactions per second. But Fantom has a pretty solid claim to being the fastest blockchain if you look at time to the end. This is arguably the most important statistic, as this is when a transaction has been fully committed on the chain. Fantom’s finality time is around one second, compared to 13 seconds on Solana and over a minute on Ethereum.
Fantom is also increasing the total number of transactions on the blockchain. A year ago, Fantom carried out an average of 4,000 transactions per day. Today, the network averages 750,000 per day. It is an incredible rate of growth. Fantom is already fifth in number of transactions, and it has overtaken much bigger coins like avalanche (CRYPTO: AVAX).
2. It is compatible with Solana and Ethereum
One of the challenges of the blockchain universe is compatibility. It can be difficult to move a virtual wallet from one blockchain to another. So in the blockchain world – like Silicon Valley – many of these blockchain networks are enemies. They are all in competition and want to win. But they also have to play well and work together.
Fantom, like most of Ethereum’s competitors, is compatible with the Ethereum Virtual Machine (EVM). This makes it easier for engineers experienced with Ethereum to develop decentralized applications (dApps) for the Fantom blockchain. And it allows dApps on the Ethereum blockchain to easily migrate to the Fantom blockchain to save money.
Solana is somewhat of a maverick in that it is not compatible with Ethereum. This places its blockchain outside of the Ethereum universe. But what’s fascinating is that Fantom is also part of the Solana ecosystem. This flexibility is a strength. It doesn’t matter who comes out on top, Ethereum or Solana, Fantom should be perfect because it is compatible with both systems.
3. The main actors support the play
If you’ve ever invested in crypto, you’ve probably heard of Sam Bankman-Fried. He is No.58 on the Forbes 400 list with a net worth of $ 26 billion, which makes him the richest crypto mogul on the list.
Bankman-Fried made a lot of money starting the crypto trading exchange FTX (CRYPTO: FTT). But he is also a notable (and early) investor in Solana. Bankman-Fried once entered a Twitter arguing over the price of the part. He and a Twitter user named CoinMamba debated the value of the Solana coin at $ 2, $ 2.05 and $ 2.38. Finally, on January 9, Bankman-Fried tweeted, “I’m going to buy as much SOL as you have, right now, for $ 3. Sell me whatever you want.” The tweet rose to fame when the coin skyrocketed to $ 149 at the end of the year.
Bankman-Fried is also a major funder of Fantom. His company, Alameda Research, bought $ 35 million worth of Fantom coins in February. This happened at the same time that Fantom began to integrate its blockchain into the Solana network.
While Bankman-Fried may be Fantom’s richest backer, probably the biggest one is Andre Cronje. He is the founder of Finance (CRYPTO: YFI) and is one of the architects of the decentralized finance revolution (DeFi). Cronje is a technical advisor to Fantom and helped develop its blockchain. It has already created a non-fungible token (NFT) marketplace on Fantom which is a direct competitor of OpenSea, the largest NFT marketplace. Cronje is also working on a secret project that will be released to the Fantom blockchain later this year.
Given its backing by major industry players, incredible speed and stratospheric growth rates, as well as low valuation against other major coins, Fantom’s crypto is expected to skyrocket again in 2022. While it is unlikely to repeat last year’s 14,000% growth, the upside potential is still very high. I own this part and am buying more.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.