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%.”
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.
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.”
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.