FTM, the native token on the Fantom smart contracts blockchain, slumped 30% this week after senior developers Andre Cronje and Anton Nell announced their exit from the project. The token was further undermined by a hack in a Fantom-based protocol, Fantasm, that stole $2.6 million.
FTM was last trading at $1.22, its lowest level in nearly six months. It was also among the worst-performing cryptocurrencies this week, according to data from coimarketcap.com.
Cronje departure a major blow to Fantom
Cronje’s departure was a major blow to the token, given his popularity in the crypto community as the “godfather of DeFi.” While the Fantom Foundation attempted to clear the air over his departure, stating that the firm will carry on developing all of its major projects, the price reaction in FTM showed sentiment was largely negative.
FTM had slumped 16% in the first few hours following Cronje’s announcement. Later in the week, it had also failed to capitalize on a brief market rally following a crypto-positive executive order signed by U.S. President Joe Biden.
Data from DeFi aggregator DeFi Llama shows Fantom’s total value locked has nearly halved since the beginning of the month, currently standing at $6.7 billion.
Fantasm hack, broader crypto market weakness weighs
Fantasm, a fractional-algorithmic protocol based on the Fantom blockchain, said an exploit had resulted in $2.6 million worth of Ethereum being funneled out of the project’s reserves. While the scope of the project is limited, its exposure to the FTM blockchain had further rattled traders, with FTM sinking 17% after the hack was revealed.
General weakness in the crypto market also did little to support FTM. Fears of the Russia-Ukraine conflict, surging U.S. inflation and anticipation of a Federal Reserve interest rate hike next week kept markets subdued, despite a slight boost from Biden’s executive order.
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