The price of Fantom (FTM), the token underpinning the eponymous blockchain network, surged by 12% over the past 24 hours, hitting a daily high of $0.502 in the early hours on Monday.
As data from CoinMarketCap shows, FTM is also up an impressive 45% over the last seven days, making it the top-performing cryptocurrency among the industry’s top-100 largest assets.
Fantom’s latest price action may have been driven by speculation that Andre Cronje, a prolific decentralized finance (DeFi) developer, was returning to the project.
Less than three months ago, Cronje announced that he, along with fellow developer Anton Nell, was leaving the crypto space for good.
The surprise move caused a sharp selloff in FTM and YFI, the native token of Yearn.Finance, another DeFi project associated with Cronje.
fUSD stablecoin de-pegging
Recently, Cronje was spotted on GitHub working on fMint protocol, Fantom’s platform for minting fUSD, the blockchain’s native stablecoin that suffered a significant de-pegging in the past few weeks.
The fUSD de-pegging may have happened due to the market’s pressure caused by the TerraUSD (UST) collapse. However, as the Fantom Foundation recently stressed on Twitter, unlike UST, “fUSD is an over-collateralized stablecoin (similar to DAI) backed by staked FTM.”
fUSD is not UST
• fUSD is an over-collateralized stablecoin (similar to DAI) backed by staked FTM. UST had nothing backing it.
• Users create fUSD by borrowing against their staked FTM.
— Fantom Foundation (@FantomFDN) May 18, 2022
“UST had nothing backing it. Users create fUSD by borrowing against their staked FTM. If the value of the FTM goes below the minimum collateral ratio, then the FTM is progressively auctioned off to users who bid using fUSD (to keep peg). UST had no auctioning process,” said the Fantom Foundation, adding that an in-depth explanation of how fUSD functions will be published “over the coming weeks.”
At the time of writing, fUSD was trading at $0.70, well below its supposed $1 peg, per CoinMarketCap.
As observed by Chinese crypto reporter Colin Wu, Cronje released the Fantom fUSD optimization proposal, while the Fantom address associated with the developer recently added nearly 100 million FTM, “which is considered to be returning to Fantom.”
Andre Cronje released the Fantom fUSD optimization proposal. AC address has recently added nearly 100 million FTM, which is considered to be returning to Fantom. FUSD suffered a severe de-pegging, and Fantom TVL also dropped sharply by about 69%. https://t.co/dpBe7y9AQ4
— Wu Blockchain (@WuBlockchain) May 22, 2022
More specifically, over the past two weeks, the given address has seen 11 tranches of 9,999,998.99 FTM each, with the latest transaction happening earlier on Monday.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
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Source: https://decrypt.co/101134/fantom-rallies-rumors-andre-cronje-returning-defi
