AC tells the financial history of Fantom: from $2 million to $1.5 billion

On November 28, Andre Cronje published a new article on his personal Medium "Fantom: The financial inside story of being a “crypto company”", the article details the financial situation of the Fantom Foundation in the past few years, from less than 2 million US dollars at the bottom to nearly 1.5 billion US dollars at the peak. AC personally described how the Fantom Foundation adjusted its strategy in the face of different situations, And finally out of the "financial crisis".

At the end of the article, AC also summarizes some of his personal experience and lessons from the changes in the financial situation of the Fantom Foundation, which may be worthy of reference for every decentralized project.

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Fantom Historical Financial Information

• On June 16, 2018, Fantom raised approximately $40 million in funding. Most of the funds are ETH, and the price during the fundraising period was about 450-700 US dollars.

• In December 2018, Fantom sold all these ETHs into US dollars at a price significantly lower than that at the time of fundraising, leaving less than US$5 million in the treasury account.

The main expenses during this period include exchange listing fees exceeding USD 3 million, KOL publicity commissions and sponsorship fees exceeding USD 500,000. So far, Fantom has decided not to spend money on exchanges and KOLs anymore. We started to be very frugal, completely suspended the marketing budget, hired only the necessary staff, all the C-level employees took a pay cut, and some even worked for free... We reduced the annual expenditure budget to under $500,000, so that Can last about 4 years.

• On May 7, 2019, the non-FTM assets in the Fantom treasury account were less than US$2 million, and the value of 100 million FTM was only about US$900,000.

We started selling FTMs on a regular basis to have more funds for unplanned expenses.

• On February 2, 2020, the non-FTM assets in the Fantom treasury account were about more than 3 million US dollars, and the 45 million FTMs were worth about 400,000 US dollars.

After that, Fantom began to actively participate in DeFi, using profits to buy back FTM.

• February 28, 2020 Our goal is to grow $8 million in treasury books by the end of the year, which will help us increase our budget to $1.5 million a year, and we need to scale.

• In March 2020, our annual payout was about $600,000, and at the same time, we were making about 20% of the $3 million a year, which means that we also made $600,000 a year. We were excited and started to seriously think about scaling up.

• In June 2020, COMP liquidity mining was launched. Currently we can mine $20,320 per week through sUSD, and $39,071 per week through COMP. The funds on the treasury account have grown from around $2 million to $6 million (including FTM).

• On July 12, 2020, we have repurchased 57933544 FTMs from the market. The funds on the account have reached 8 million US dollars, and the income mainly comes from the liquidity mining of COMP and SNX(Odaily: Mining to support the team, just ask if you are convinced)。

• On July 13, 2020, our FTM holdings reached 207,378,636 FTMs, which means we have repurchased over 150 million FTMs.

• On August 20, 2020, treasury funds had reached $18 million (including FTM), including $11 million in stablecoins and $7 million in FTM. At this time, an RPC service provider asked us for $8 million to integrate, and we declined.

• On October 30, 2020, we already had USD 27,114,975 in our account, and if we count the locked tokens, it has reached USD 39,687,104, basically returning to our initial fundraising situation.

• On January 1, 2021, treasury funds amounted to $51,684,378 (including FTMs) and annual income reached $2,009,849.

• On February 2, 2021, treasury funds reached $146,792,798, including about $20 million in stablecoins, about $50 million in FTM, and about $50 million in CRV.

• On February 15, 2021, we surpassed $1 million in weekly revenue.

• On February 23, 2021, we announced the sale of 81.5 million FTMs to Alameda at an average price of $0.428831, for a total of $34949726.5.

• On February 24, 2021, we sold an additional 10384165 FTMs to Blocktower for a total of $5 million.

• On May 3, 2021, our treasury, including FTM, has reached $147,847,1641 (you read that right, close to $1.5 billion), and we have $300 million in liquidity. We scaled up further and increased our budget.

• On September 30, 2021, excluding FTMs, we had $263 million on our books.

• On January 5, 2022, Alameda requested further cooperation, which we declined.

• On January 14, 2022, an exchange requested a listing fee of 300 million US dollars when listing the currency, and we rejected it.

• In May 2022, the treasury lost about $50 million in BOO, CRV, YFI, CVX and ETH holdings, but we still have $100 million in stablecoins.

• In October 2022, an NFT exchange asked for a $100 million deployment fee, which we also declined.

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treasury revenue composition

• Validator revenue - Fantom itself runs 9 validator nodes and invested a total of 60,708,615 FTMs, which means we earn 4,182,823 FTMs per year.

• Delegator revenue - Fantom delegates about 60 million FTMs to validators on the network, which brings us about 4.1 million FTMs in revenue per year.

• Network Revenue - The Fantom ecosystem earns 10% of all transaction fees. With an average transaction fee of 30000 FTM per day, we can make $1 million per year with an average fee per transaction of less than $0.005.

• DeFi income - Fantom can earn about $5.98 million per year through DeFi operations in itself and other ecosystems(Odaily: It accounts for more than half of the total income, let’s see what a DeFi master is...)。

Fantom currently generates more than $10 million in annual revenue, not including any investment income.

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some lessons learned

Never try to compete with competitors in terms of "integration", "listing", "cooperation" and other figures. Unlike most competitors, the Fantom Foundation owns relatively few FTMs, and some other Layer 1s may have 50% - 80% of the token supply, but Fantom's share at the beginning of the launch was less than 3%, while Now our position ratio has exceeded 14%. We prefer to buy our tokens, we will not sell our tokens for so-called "partnerships".

"Blockchain companies" don't make money, and it's not the Fantom Foundation's job to run validators, we're just doing it to support the network we believe in and earn a fee for doing so. However, this is not our core business, Fantom's core business has always been to build the most scalable and robust Layer 1.

Network income is a point that distinguishes Fantom from other projects, but it is not designed for the foundation. It is the platform income of all Dapps deployed on Fantom, and any Dapp deployed on Fantom can get this part of the income. Although the Fantom Foundation has successfully practiced decentralized treasury management, this is not our core business.

In fact, "blockchain companies" generally can only make money by selling tokens, and such a model is limited in development.

We spent a lot of time comparing finite and infinite models. We ask ourselves "what impact will a certain collaboration have over a 10-year cycle", we ask ourselves "how can we sustain this cooperation for 10 years", and we ask ourselves "what if we Cooperation pays the bill, will they be deployed to other chains soon”, we will make a decision based on the answers to these questions.

Apart from Ethereum, Fantom is the oldest non-forked Layer 1 with true TVL. We have been in operation for more than 4 years, and we plan to continue to operate for at least 30 years, and you can track our technical progress and delivery progress at any time.

If your entire revenue model is selling tokens, then you are doing yourself, your blockchain, and your backers a disservice.

If DeFi didn't exist, we might not be able to survive today. I believe this is true for many companies.

Crypto is dead, crypto lives forever.