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Celo, Fantom Tokens Jump on Fresh DeFi Incentive Programs

New day, new incentives for layer 1 blockchains looking to compete with Ethereum.

Aug 30, 2021 at 5:53 p.m. UTC
Updated Aug 30, 2021 at 7:24 p.m. UTC

Upstart base layers seem to have a new (and remunerative) playbook for courting decentralized finance (DeFi) projects.

The prices of CELO and FTM, the tokens of layer 1 blockchain projects Celo and Fantom, surged Monday after both projects announced plans for big-budget incentive programs, becoming the latest tokens benefiting from such news announcements.

The price of CELO was up by more than 75% in the past 24 hours, according to Messari, trading at $7.65 as of press time. Meanwhile, FTM token’s price was up by 72% in the past 24 hours, trading at $0.88.

CoinDesk reported earlier Monday that the phone-focused blockchain Celo is rolling out a $100 million “DeFi for the People” fund, which will allow the layer 1 blockchain to work with several Ethereum-native decentralized finance (DeFi) protocols in an effort to attract more users.

“Shortly after the announcement, CELO daily sentiment spiked more than 20 points in less than two hours, signalling almost instantaneous trader interest in the asset,” Nick Mancini, research analyst at trading sentiment data provider Trade the Chain, said. “Twitter volume has risen more than 650% in that short amount of time, and trading volume is up more than 1,700%.”

CELO's daily sentiment spiked on Trade the Chain's tracker, which calculates a token's sentiment scores by crawling data sources around the internet with the help of machine learning and AI. (Source: Trade the Chain) (Trade the Chain)

Added Mancini:

“As long as sentiment and trading volumes continue to flourish, so will price action.”

Also covered by CoinDesk Monday, Fantom has launched an incentive program that offers 370 million FTM tokens to protocols building on the network.

DeFi land grab

Celo and Fantom become the latest layer 1 blockchain projects to cash in on a growing trend.

Prices of tokens from other blockchains including Solana and Avalanche have also surged recently after the platforms announced incentives to attract both protocols and users.

Data from DeFi Llama shows that the total value locked (TVL) in Celo reached an all-time high of approximately $74 million on Aug. 28. TVL is a measure of how many crypto assets are committed to a given DeFi protocol. The leading DeFi project on Celo is lending protocol Moola Market.

That said, both CELO and FTM are still well off their all-time highs, according to Messari.

After the sugar high

While upstarts surge, the lagging performance of former DeFi darling Binance Smart Chain raises questions about retaining users in the long run after initially coaxing traders to jump to a new network.

According to Simone Pomposi, head of marketing at Fantom, Fantom’s incentive program is different from other similar announcements as it is targeting the builders of protocols on Fantom, not users.

“Other chains or platforms reward users … and users leave when a new or better incentive program appears,” Pomposi said via a representative. “With this incentive program, we unleash the creativity of builders.”

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Muyao is a reporter on the markets team. She is based in Brooklyn, New York. She holds less than one BTC.

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