AC's Firsthand Account of Fantom's Financial History: From Surviving on $2 Million to Building a $1.5 Billion Ecosystem
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AC's Firsthand Account of Fantom's Financial History: From Surviving on $2 Million to Building a $1.5 Billion Ecosystem
Fantom currently generates over $10 million in revenue per year, excluding any capital gains.
Navigating Web3 tides with focused insights
Written by: Andre Cronje
Translated by: TechFlow
June 16, 2018 — Fantom raised $40 million (mostly in ETH: $450–700).
December 2018 — Fantom sold its ETH at prices far below the average raise price. Less than $5 million remained.
Major expenses included over $3 million in exchange listing fees and over $500,000 in “sponsorship fees” to incentivize “influencers.”
Later, we decided to stop paying for exchange listings or influencers.
Fantom became frugal—no marketing, only essential staff. C-Level executives (CEO, CTO, etc.) took pay cuts; some stopped taking salaries altogether. Our annual expenditure was under $500,000, allowing us to last roughly four years.
May 7, 2019 — Non-FTM balance fell below $2 million. 100 million FTM were worth approximately $900,000.
We decided to periodically sell FTM to help fund unplanned expenses.
February 2, 2020 — Only just over $3 million remained in non-FTM assets. 45 million FTM were valued at around $400,000.
Fantom began actively participating in decentralized finance, using profits to buy back FTM.
February 28, 2020 — Our goal was to grow to $8 million by year-end 2020. We needed to scale up, increasing our annual spending to $1.5 million.
March 2020 — Annual expenditure reduced to $600,000. We generated a 20% annual yield on $3 million, earning ~$600,000/year. We were pleased and began considering expansion.
June 2020 — COMP launched. We earned $20,320 weekly from sUSD and $39,071 weekly from COMP. Treasury grew from $2 million to $6 million (including FTM).
July 12, 2020 — 57,933,544 FTM exited circulation. Treasury reached $8 million, primarily from liquidity staking on COMP and SNX.
July 13, 2020 — Total treasury FTM holdings reached 207,378,636, an increase of over 150 million FTM.
August 20, 2020 — $11 million allocated to stablecoins, $7 million to FTM. An RPC service provider requested $8 million for integration—we declined.
October 30, 2020 — Treasury stood at $27,114,975. Including locked tokens: $39,687,104. We nearly reached Fantom’s original $40 million raise.
January 1, 2021 — Treasury: $51,684,378 (including FTM), annual income: $2,009,849.
February 2, 2021 — Treasury reached $146,792,798: ~$20 million in stablecoins, $50 million in FTM, $50 million in CRV.
February 15, 2021 — Weekly income exceeded $1 million.
February 23, 2021 — Announced sale of 81.5 million FTM to Alameda at an average price of 0.428831, totaling $34,949,726.50.
February 24, 2021 — Sold 10,384,165 FTM to Blocktower for $5 million.
May 3, 2021 — Treasury reached $1,478,471,641 (including FTM). Liquid funds were "only" $300 million. We scaled up operations, increased salaries, and held over 400 million FTM.
September 30, 2021 — Treasury stood at $263,000,000 (excluding FTM).
January 5, 2022 — Alameda requested further collaboration; we approved.
January 14, 2022 — An exchange requested a $300 million listing fee; we approved.
May 2022 — Lost $50 million in funds across BOO, CRV, YFI, CVX, and ETH. Still held >$100 million in stablecoins.
October 2022 — An NFT exchange requested a $100 million deployment; we agreed.
November 2022 — We hold over 450 million FTM, over $100 million in stablecoins, over $100 million in crypto assets, and over $50 million in non-crypto assets. Salary burn rate: $7 million/year. We can now sustain operations for 30 years (without touching FTM).
Revenue / Earnings
Validators — Fantom operates 9 validators with a total stake of 60,708,615 FTM. This enables us to earn approximately 4,182,823.5735 FTM annually.
Delegators — Fantom delegates approximately 60 million FTM to its own validator nodes, earning about 4.1 million FTM per year.
Network Revenue — Fantom earns 10% of all transaction fees within the ecosystem.
Average daily transaction fees are 30,000 FTM, yielding over 1 million FTM annually. Average cost per transaction is under $0.005.
DeFi Revenue — Fantom earned approximately $5.98 million from various DeFi strategies across both the Fantom and Ethereum ecosystems.
Fantom currently generates over $10 million in annual revenue, excluding any capital gains.
We have strong positive cash flow.
We continue to scale.
Lessons Learned
Do not compete with rivals over “integrations,” “listings,” or “partnerships.” Unlike most competitors, the foundation holds relatively few FTM. At launch, the Fantom Foundation held less than 3%; today we hold over 14%. We prefer to buy back our tokens rather than “sell” them for “collaborations.”
Blockchain companies do not generate revenue. Being a validator is not part of the foundation’s role—we do it to support a network we believe in and earn fees in return. However, this is not core business. Core business is building the most scalable and robust L1. Network revenue is unique to Fantom, but again, these fees are not planned for the foundation—they will go to dApp platforms launched on Fantom. This too isn't core business, as any application deployed on Fantom will earn this revenue, not us. While DeFi and treasury management have historically been highly successful for Fantom, they are not our core business.
In reality, blockchain companies can only make money by selling tokens—these are finite models.
We spend significant time comparing finite vs. infinite models. We ask ourselves: “What impact will this partnership have in 10 years?” “How can we sustain this action over 10 years?” “If we pay for this launch, how soon will this partner simply deploy on another chain?” We base decisions on these answers.
Aside from ETH, Fantom is the oldest non-forked L1 with real TVL. We’ve operated for over four years and plan to run for at least another 30. We have a proven track record of technological advancement and delivery.
If your entire revenue model depends on selling your token, you’re harming yourself, your blockchain, and your supporters.
Without DeFi, we likely wouldn’t be operational. I believe the same applies to many companies out there.
Crypto is dead. Long live crypto.
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@AndreCronjeTech
