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Ethena (ENA) Surges 60%, But Fantom Co-Founder Warns Of Luna-Like Demise

Ethena Labs’ new governance token, ENA, is witnessing a staggering 60% increase in its value, shortly after its introduction to the market. The spike in ENA’s price to approximately $0.96 has catapulted its market capitalization to nearly $1.34 billion, ranking ENA as the 80th largest cryptocurrency by market cap.

This ascent followed Ethena’s strategic distribution of 750 million ENA tokens, representing 5% of its total supply, through an airdrop to holders of its USDe token. The USDe, a synthetic dollar, is central to Ethena’s offering, leveraging a blend of ether liquid staking tokens and short Ether (ETH) perpetual futures positions to maintain a target value near $1.

At the heart of Ethena’s value proposition is the ENA token, engineered to facilitate a digital dollar platform on the Ethereum blockchain. This platform seeks to provide a viable alternative to conventional banking mechanisms through its innovative ‘Internet Bond’. By harnessing the potential of derivative markets and staked Ethereum, the Internet Bond offers a dollar-denominated savings instrument accessible globally, independent of traditional banking infrastructure.

The total supply of ENA tokens is capped at 15 billion, with an initial issuance of 1.425 billion tokens. The distribution plan prioritizes ecosystem development (30%), core contributor rewards (30%), investor engagement (25%), and foundation support (15%), embodying a holistic approach to tokenomics. Notably, Binance’s endorsement of ENA as the 50th project on its Binance Launchpool, enabling users to farm ENA tokens by staking BNB and FDUSD, underscores the token’s appeal.

At press time, ENA traded at $0.93, up 60% in the past 24 hours.

Ethena ENA price

Fantom Co-Founder Warns Of Luna-Like Collapse

Andre Cronje, co-founder of the Fantom Foundation, issued a warning on X, recalling the concerns that preceded the collapse of Terra Luna. Cronje dissected the structure of perpetual contracts (perps), a derivative product that enables traders to speculate on the price movement of an asset without holding the actual asset.

This mechanism operates on a system of funding rates meant to tether the perpetual price closely to the underlying asset’s spot price. However, Cronje highlighted a critical vulnerability in this system: the reliance on yield-generating assets, such as staked Ethereum (stETH), as collateral.

This approach theoretically allows for a “neutral” position, where the gains from yield should offset losses from the short position if the asset’s price drops. Yet, this equilibrium is precarious, as negative shifts in funding rates can erode the collateral, leading to liquidation.

“The mechanism – the theory here is that you can generate a ‘stable’ $1000, by buying $1000 of stETH, using this as collateral to open a $1000 stETH short, thereby achieving being ‘neutral’, while getting the benefit of the stETH yield (~3%) + whatever is paid in funding rates,” Cronje explained.

Cronje’s concerns are not unfounded. The crypto industry witnessed the dramatic implosion of Terra’s algorithmic stablecoin UST in 2021, a debacle that resulted in significant financial losses across the board. By drawing a parallel between the structural weaknesses he perceives in Ethena’s framework and the mechanisms that led to Terra’s downfall, Cronje raises a red flag about the sustainability of complex financial products that lack transparent risk mitigation strategies.

Responding to Cronje’s critique, the founder of Ethena Labs Guy Young aka Leptokurtic, acknowledged the validity of the concerns raised. “These aren’t mid curve concerns at all Andre Cronje, you rightly point out risks that absolutely do exist here. Will work on a longer form response for you by end of this week with some thoughts,” Young stated on X.

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Fantom (FTM) Jumps 180% In 4 Weeks: Just The Beginning?

Over the past 24 hours, Fantom (FTM) has emerged as the standout performer among the top 100 cryptocurrencies by market capitalization, registering a remarkable 13.5% gain. This surge is part of a broader rally that has seen the FTM price soar by 180% over the last four weeks, propelling it from $0.42 to $1.20. This upward trajectory has significantly boosted Fantom’s market capitalization to $3.3 billion, positioning it as the 41st largest digital asset worldwide. Here’s why this might be just the beginning:

#1 Sonic Upgrade: The Catalyst for Fantom’s Rally

The anticipated Sonic upgrade is central to Fantom’s recent success. Designed to enhance the Fantom technology stack, Sonic introduces major scalability improvements without necessitating a disruptive hard fork. Key components of the Sonic upgrade include:

  • Fantom Virtual Machine (FVM): Aims to significantly boost transaction throughput.
  • Carmen Database: Promises to reduce storage requirements by up to 90%.
  • Optimized Lachesis Consensus: Improves upon the existing consensus mechanism for enhanced performance.

With these enhancements, Fantom targets a throughput of over 2,000 transactions per second (TPS), marking a substantial leap in scalability. Importantly, the upgrade ensures that existing Fantom Opera smart contracts and tools remain fully compatible with the Sonic mainnet, which is scheduled to launch in Spring 2024.

Recent testnets have demonstrated Sonic’s potential. The closed testnet, focused on ERC-20 swaps, achieved an impressive ~4,000 TPS with ~1.3-second finality. Furthermore, a reconfiguration to process only ERC-20 transfers led to a groundbreaking ~10,000 TPS at ~1.6-second finality, showcasing the capabilities of next-generation decentralized exchanges (DEXs) and wallets.

Reflecting on Sonic’s impact, Reflexivity Research highlighted, “Fantom Sonic unlocks new possibilities for the Fantom ecosystem, particularly in decentralized finance (DeFi) platforms, blockchain games, high-frequency applications, and the Internet of Things (IoT).”

The research firm added that another cornerstone for Fantom is its exemplary 99.9% uptime. “Fantom’s novel solutions position it as a frontrunner in the development of decentralized networks,” Reflexivity Research stated.

#2 Andre Cronje: The Innovator’s Promise

Andre Cronje, the founder of Fantom and one of the brightest minds in the crypto industry, has been instrumental in driving innovation within the ecosystem. Cronje recently underscored his commitment to advancing the crypto space, stating, “The number 1 dex on Base, and the number 1 dex on Optimism are both built with code I wrote and pioneered. Stick to where the innovators are, post Sonic I will be adding some new primitives to crypto.”

#3 Coinbase Announcement: A New Milestone

Another factor driving today’s price rally is probably today’s Coinbase International announcement that it will launch Fantom perpetual futures on Coinbase International Exchange and Coinbase Advanced, set to commence on or after 9:30am UTC on March 28, 2024. This move by Coinbase is expected to further enhance Fantom’s liquidity and accessibility, contributing to its growing appeal among investors.

#4 Technical Analysis: FTM/USD

The bullish momentum of Fantom price is apparent in the weekly FTM/USD chart on Binance, signified by the latest candlestick closure above the key exponential moving averages (EMAs) of 20, 50, 100, and 200 periods. This week’s candlestick represents a notable increase of approximately 50% from the intra-week low.

Fantom’s ascent has propelled its value beyond the 0.382 Fibonacci retracement level, situated at $0.9176. This bullish breakout suggests the market may target subsequent Fibonacci levels, with $1.38 (0.382 Fib) acting as an intermediate psychological and technical resistance, followed by $1.76 (05 Fib), and potentially extending towards the golden ratio at $2.13, which corresponds with the 0.618 Fibonacci level.

On the flip side of this bullish scenario, should a correction occur across the broader crypto market, immediate support for FTM can be anticipated at the $0.92 level. Stability at or above this threshold could reaffirm bullish market control. Conversely, a downward breach could intensify selling pressure, possibly leading to a retest of support around the $0.56 mark.

Fantom FTM price

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Why Fantom Fell 22% Following Key Personnel Exit

Fantom (FTM) price decreased 22% by reaching $1.32 per coin after key personnel associated with its project announced that they were leaving.

Fantom is in deep trouble following the departure of two high-profile employees, Anton Nell, a senior solutions architect, and Andre Cronje, a prolific developer, without providing any clues about why they left.

Related Reading | Crypto Markets Slightly Recover After Weekend Decline

The Fantom cryptocurrency has seen a sharp decline in value over the past week, dropping 22% to hit lows near $1.32 on Monday, according to Coinmarketcap data. This brings their total asset value down about 60% from its peak. 

FTM price at $1.32 after touching $1.38 today | Source: FTM/USD chart on Tradingview.com

The token’s peak came during January 16th, when it reached $3.3 per coin. Since then, there have been many decreases which eventually led up until now, where they’re currently sitting at just $1.32 each – a reduction of approximately 60%.

With the news, the price of dozens of tokens plunged. 

The price fluctuation of cryptocurrencies has been unpredictable lately, with some Gain Others Lose. But one thing that remains constant is the importance each individual holds regarding their cryptocurrency’s value- whether through trading or holding. 

Experts Reviews On The News

Raj A Kapoor, the founder of India Blockchain Alliance, said, “the price fluctuation is a response to the news reiterates just how critical an individual can be to a crypto’s value.” 

It was assumed that an announcement regarding this would be made soon, as Cronje deleted his Twitter account and Linkedin reflected a change in association with Fantom Foundation.

Edul Patel, CEO and Co-founder of Mudrex, believes that Cronje’s exit might influence DeFi space. “We’ll see sell-off initially, but it should be temporary,” he said with confidence.

Patel added developers continue building on the space, and one person’s exit will not cause turmoil because of their sudden change.

The analyst said Investors might press the panic button amidst recent volatility.

“The markets don’t like uncertainty,” said Pratik Gauri, founder, and CEO of 5ire. “Also, investors realized it may be overstretched in valuation,” he added.

Gauri said many people don’t know the reasons behind her sudden exit, but it will affect the price.

Fantom (FTM) Ecosystem

The Fantom ecosystem’s tokens followed suit and dropped down drastically. For example, SpookySwap (BOO), LiquidDriver(LQDR ), Geist Finance, Tomb; these four prominent chains saw their prices fall up to 20%.

The volume of Fantom tokens has skyrocketed, more than doubling over the last 24 hours.

Related Reading | Yearn Finance (YFI) Down 13% Following Andre Conje’s Exit

Patel from Mudrex said;

Tokens would likely bounce back because DeFi is meant to be a trustless system of finance. In which no one single person has the power to influence the system.

“A lot of other projects were dependent on Yearn and Fanton. It’s a DeFi network for all of your favorite blockchains,” said Gauri, “and it has over 80 DApps on there.”

The data suggests that 80% of Fantom’s total supply is available in the market, with its maximum cap at 3,175,000,000 tokens. Of this, 2,545,006,273 are currently circulating.

Raj A Kapoor advised hunting for better opportunities available by saying; 

One big problem with Fantom is gas pricing. The unpredictable volatility may pass, but in a crypto arena that’s getting crowded, Fantom may not be worth that wait.

                Featured image from Pixabay, chart from Tradingview.com

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Andre Cronje Announces Keep3r Expansion With Eden Network

Renowned developer Andre Cronje has revealed a new partnership with Eden Network that will benefit Keep3r users. As part of the strategic partnership, according to a post written by Cronje, Keep3r Network has acquired 602,409 EDEN tokens.

Eden Network, previously ArcherDAO, is a transaction ordering protocol that protects its users from “arbitrary reordering” while making transactions on Ethereum. In other words, users are protected from transaction frontrunning by sending transactions via the Eden Network.

The protocol is optional and non-consensus breaking, their official website claims, and offers a “fair set of rules to order transactions within each block”. In addition, it has a reward system to realized Miner Extractable Value (MEV) profits.

The acquisition of the EDEN tokens guarantees that Keep3r Network has “probabilistic certainty” to become a Slot Tenant on Eden Network.

Gmi🥳 @AndreCronjeTech + @thekeep3r invest in the Eden edge 🍃.

We love this 2x:– @thekeep3r making a large investment in their platform performance for the benefit of their users😍– A strategic partner and guide that continues to help us to develop our product for ETH users🤓 https://t.co/ZKYyghF7lH

— Eden Network Formerly Archer_DAO (@EdenNetwork) August 27, 2021

This will grant premium blockspace to Keep3r effectively allowing to “own a slice of every block” and have priority to insert transactions, benefit from private transactions, users will receive better prices to transact on Ethereum, and thus Keep3r will increase its adoption levels.

To access these benefits, a person needs to leverage the kp3r proxy, the post clarified. Andre Cronje said the following on Keep3r Network’s new collaboration:

This is valuable for Keep3r as we can protect keepers & jobs from frontrunning while having priority access to block space. Over half of Ethereum hashpower is on the Eden Network.

Source: Eden Network Explorer
Eden Network Contributes To Solve Ethereum’s High Fees Problem?

As NewsBTC has reported on several occasions, high transactions fees have become a major issue for the Ethereum ecosystem.

Thus, solutions emerged from many sectors, such as the series of tools developed by Flashbots, Eden Network and its user focus MEV approach, L2 scaling solutions like Optimist Rollout, and others.

Ethereum is the epicenter of some of the hottest trends in the crypto industry, from DeFi to Non-fungible tokens (NFTs), and on-chain gaming. To trade or interact with a smart contract, a transaction must be triggered.

Cronje, known as the developer behind Yearn Finance, and for his motto “I test in prod”, seems to acknowledge the importance of integrating Keep3r with solutions that mitigate the high fee issue.

The main objective is to protect users, but also to encourage them to use Ethereum and prevented them from migrating to alternatives.

In the past weeks, Ethereum competitors and their ecosystem have been thriving on the back of the high costs to operate on its network. Recently, Solana and Cardano reached new highs with massive rallies that have gone, at some point, against the general trend in the market.

In the short term, Eden could gain more relevance as other projects will prioritize the preservation of their user base amidst the current congestion of the Ethereum network. The team behind Eden Network told NewsBTC the following on their collaboration:

This partnership demonstrates the value that blue chip DeFi projects are finding in Eden Network’s priority protocol. In the near term, we plan to continue to expand access and awareness of Eden Network to traders, who currently are being quietly exploited by malicious MEV bots on the order of several millions of dollars per week. Taking advantage of Eden Network is low-hanging fruit that offers a lot of advantages.

At the time of writing, ETH trades at $3,225 with sideways movement coming out of the weekend.

ETH moving sideways in the daily chart. Source: ETHUSD Tradingview