Fantom Cratered ‘Cos of Cronje; Now He’s Caused it to Surge

Fantom Cratered ‘Cos of Cronje; Now He’s Caused it to Surge
24 May 2022

After just under two months of being in the doldrums, Fantom has made a resurgence as its founder Andre Cronje has resurfaced.

Over the past three days, Fantom has risen over 45%, following a proposal from Cronje regarding helping fUSD return to its US$1 peg. fUSD’s de-peg is thought to be a result of the UST fallout.

Cronje proposed designing the smart contract so that positions that are not overcollatarized will be liquidated to ensure the fUSD peg is maintained.

It is also believed that a Fantom address belonging to Cronje added over 100 million FTM over the past two weeks.

Read more: Andre Cronje Has Exited Fantom – This is Why it Matters

In March, Fantom fell 25% in one day after Cronje’s colleague and former Fantom Foundation senior solutions architect Anton Nell tweeted that the pair would be exiting the DeFi/crypto space completely.

Now that Cronje is seemingly returning to the world of DeFi, Fantom’s price has popped. However, the Fantom Foundation recently tweeted that “fUSD is not UST,” stating that fUSD is “over-collateralized” and backed by staked FTM.

“Users create fUSD by borrowing against their staked FTM. If the value of the FTM goes below the minimum collateral ratio, then the FTM is progressively auctioned off to users who bid using fUSD (to keep peg),” the post read.

The message comes a few weeks after TerraUSD de-pegged, causing LUNA to crash to almost zero.

Read more: [UPDATED] “Terra is more than $UST”: Do Kwon Plans to Revive Blockchain From LUNA’s Ashes

It’s also worth noting that whether Cronje’s proposal can actually help fUSD regain its US$1 peg is yet to be seen.

Blockhead Team
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