How Fantom and Optimism’s DeFi and DApp development directly affects FTM and OP price action

The price action of Optimism (OP) and Fantom (

The 30-day activity billboard from Nansen shows that top dApp activity on Fantom was limited to simple swaps, which is discouraging as other activities like derivatives trading, social media platforms and NFT trading are prospering on competing chains like Arbitrum, Polygon, and Optimism.

The most used dApps on Fantom between Jan. 20, 2023, and Feb. 20, 2023, is XEN Crypto, a free mint Ponzi scheme-like application. The application first appeared on Ethereum in October 2022 with a lot of excitement in the first few days of launch. However, the hype subsided after the mint became unprofitable as many users crowded the platform.

Optimism developers find success with new use cases

At the same time, Optimism has successfully attracted liquidity and activity to its ecosystem after launching the Optimism token and accompanying airdrop campaigns. In April 2022, the Optimism team stated there would be a “season of airdrops,” and launched an Optimism Quest campaign.

The layer-2 network saw increased usage from users for collecting its non-fungible tokens (NFTs), which would likely make them eligible for the airdrop. The Quests ended in January 2023, following which there was a steep decline in activity. However, the DeFi liquidity remained sticky.

Moreover, the list of most used decentralized applications on Optimism includes yield platform Pool Together, derivatives platforms Synthetix and Perpetual Protocol and leading lending platform Aave.

Optimism also hosts a decentralized blogging platform, Mirror, which allows content writers to issue their articles as NFTs. The platform has gained significant usage, with 2.7 million hits on its website.

Comparing the tokenomics of FTM and OP

One drawback of the Optimism token is that it is only a governance token and doesn’t entitle users to real yields in gas fees. The OP tokens’ supply will inflate at 2% per year, along with investor and team unlocks, starting April 2023.

However, the Optimism team has incentivized participation in governance, which improves the protocol’s governance and also aligns incentives with its intended use, i.e., higher voter participation.

Optimism’s governance has proved more efficient than competitors like Uniswap (UNI) and Compound (COMP) in promoting decentralization. The layer-2 network’s ecosystem is also expanding by supporting diverse applications. Optimism also stands to benefit from Arbitrum’s native token launch, which can likely add fuel to the layer-2 token narrative, pushing the OP token’s price higher.

For Fantom, despite implementing a burn feature in its protocol, the real yield of the platform is still negative, around -0.93%. The blockchain’s fees and liquidity must improve considerably to enhance the value of FTM. Otherwise, it risks becoming irrelevant alongside many other layer-1 protocols in the market.

Technically, FTM can see more upside while it holds support above $0.38 and target the $0.95 support and resistance area. A breakdown below $0.38 could see it dropping toward $0.19.

For OP, its price surged above its previous peak of $2.30, which will now act as a support for further upside as it experiences a price discovery. On the flipside, a breakdown below this level could see the token’s price drop toward $1.30.