Every once in a while, a lesser known cryptocurrency in the top 50 list achieves impressive daily and weekly gains that push it into the limelight. Fantom’s FTM token seems to be it this week, but a deeper look at the project might provide more insights into whether it is a good coin to have in your portfolio.

FTM is currently trading at $1.69 and is up by 31.77% in the last 24 hours and 99.59% in the last 7 days at the time of this press. The cryptocurrency has been on a heavily bullish trajectory since July 21 when it traded as low as $0.15 to its current all-time high of $1.74, which means it has gained by more than 1,000% in a span of two months . Such impressive price action is enough to raise curiosity in the crypto community.

Source: Binance

What is Fantom?

Fantom is a directed acyclic graph (DAG) blockchain that is smart contract-compatible and a network that aims to compete on the same level as the Ethereum blockchain. It was founded by a South Korean scientist called Dr. Ahn Byung Ik although Michael Kong is the current CEO. Fantom launched its mainnet in September 2019 and one of its notable features is a bespoke consensus mechanism called aBFT or Lachesis which helps it to achieve faster and cheaper transactions.

The Fantom network’s consensus model is one of the reasons why the network is rapidly gaining popularity because it allows it to overcome the blockchain trilemma. Launching dapps on Phantom is far cheaper than on networks such as Ethereum. Its native token FTM is used to pay for network fees, staking to facilitate network security and also for governance.

Why has the FTM token exploded in price in the last two months?

Fantom has been working towards onboarding more projects on its network and this is highlighted by its increased interest in DeFi. FTM’s impressive rally is tied to those efforts, particularly the decision to launch an incentive program worth $370 million. The incentive program was rolled out to attract new protocols and projects in the DeFi landscape. Fantom’s DeFi ecosystem is quite different from many other blockchain networks because it relies heavily on a synthetic stablecoin known as FUSD that is minted through FTM. The approach gives Fantom a leg-up because it might shield it from regulatory pressure compared to other protocols that are less decentralized.

What to expect from FTM’s price action moving forward

FTM’s massive price pump is due for a price correction considering the extended nature of its gains and the fact that it is currently overbought as indicated by the RSI. Its buying volume also seems to be slowing down, suggesting the likelihood that its market correction is coming soon. However, the long-term outlook is still favorable since Fantom has the potential for more growth.

FTM currently has a market cap of $4.4 billion and a circulating supply of 2.5 billion FTM tokens with a max supply of 3.17 billion tokens. A substantial increase in the number of platforms launching on the blockchain alongside healthy on-chain demand for the token will pave way for healthy price action in the long run.