Fantom (CRYPTO: FTM) was down more than 20% over a 24-hour period on Sunday night, as the price dropped from $1.70 on Saturday evening to $1.35 on Sunday evening, shedding over $600 million of market cap in the process. Zooming out, Fantom is now down 38% over the past month and 48% year-to-date. What's behind the move?
Star developer departs
The top-40 cryptocurrency by market cap tanked when a senior solutions architect at Fantom, Anton Nell, abruptly announced that he and star developer Andre Cronje were leaving the project and crypto as a whole. Preceding the announcement, Cronje had already raised some concern when he deleted his Twitter account and other social media, which spooked investors. While Cronje was not the founder of Fantom, he is a prolific builder and high-profile name in the decentralized finance (DeFi) space, and his presence and involvement is what attracted many new investors to the Fantom blockchain in the first place.
Cronje was the founder of Yearn Finance (CRYPTO: YFI), which was also down on the news, as well as an array of other projects and apps in the space. These include the recently launched and highly anticipated Solidly, a decentralized exchange on Fantom that many Fantom investors were looking forward to and had attracted over $2 billion in total value locked (TVL) in just three days. Solidly's SOLID token fell over 50% based on the departure although it has since started to recover. Additionally, other projects associated with Fantom like Beefy, SpookySwap, and Beethoven X were all down double-digits in sympathy with Fantom.
Image source: Getty Images.
Is Fantom still a good investment?
The Fantom Foundation was quick to take to Twitter and point out that it is grateful to Cronje for what he contributed to Fantom but that it is not a one-man show. There are 40 other people working at Fantom, not to mention hundreds of other developers building on it.
Investors who believe in Fantom can continue to hold and feel good about the network's long-term prospects, and the discounted price can even be viewed as a buying opportunity. Fantom still has over $7.5 billion in total value locked in the protocol, compared to a market cap of just $3.6 billion. There are over 100,000 unique addresses interacting with Fantom on a daily basis. That being said, short-term investors who were in it for a quick flip will likely find that prospect more difficult.
The price decline of Fantom and some of the projects that Cronje was building on Fantom, like Solidly, raises the conversation of how "decentralized" many parts of the DeFi space really are when one person has so much influence on a project and its price, whether real or perceived.
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Michael Byrne owns Fantom. The Motley Fool owns and recommends Twitter and Yearn.finance. The Motley Fool has a disclosure policy.
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