Understanding the rise and fall of Tomb Finance.

To make a fair and honest comparison, we will compare $FTM, $TOMB, and $TSHARE Coin Gecko charts from August 28th 2021 to present November 26th 2022.

$FTM chart

In the three months between August 2021 to the end of October 2021, $FTM went from $0.50 to $3.46. What sent $FTM to all-time highs so quickly?

Bull market aside, Fantom Blockchain was a highly competitive layer-1 blockchain that heavily aligned with a primary investment thesis for 2021. At the time and to this day, Ethereum despite all its well-known shortcomings leads the layer-1 blockchain narrative.

Fantom, among other L1 competitors, offered a low-cost and high-speed solution to resolve the many pain points of Ethereum.

However, history shows that Fantom was not a panacea with crippling network delays and high variance in cost per transaction. If the chart is anything to go by – the market had lost its appetite for Fantom. Without a marketable differentiator compared to L1 competitors the primary investment thesis for Fantom was the involvement of a highly regarded innovator Andre Cronje. Since he had left Fantom… returned to Fantom… left … again… and has since returned, it appears that Fantom has largely lost credibility due to a perceived lack of innovation and internal dramas.

As it stands, Fantom has by and large lost any competitive edge with innovative L1s such as Near, Avalanche, BNB Chain, and Cosmos.

$TOMB Chart

$TOMB, in fact, had reached a higher all-time price in $US dollar terms than $FTM, at $3.86 due to the $TOMB peg being approximately 1.11 at the time. The all-time high recorded around its launch is flawed in the sense that a lower supply led to a greater price impact, or in more relatable terms, a “pump and dump”.

While $TOMB spent a significant amount of time below peg, there was a slight latency in $TOMB: $FTM parity being restored, but sure enough it captured enough interest and capital inflows from those pursuing high yields of a derivative asset of $FTM.

$TOMB can only do as well as the asset it is pegged to. If faith is lost in the collateral asset, that contagion will diminish the $US dollar value by the algo-peg design.

$TSHARE chart

In dollar terms, $TSHARE was a lagging indicator for $FTM’s meteoric rise and is the most interesting aspect of the rise and fall in total value locked on Tomb Finance.

$TSHARE began to make its moves due to a supply squeeze at the end of October at $1300 to march toward a staggering all-time high of $24,382.13 on January 4th.

Those that were bullish on $FTM at the time, invested into $TOMB to gain exposure to its success. As the peg exceeded parity, much of the profits realized were used to buy the $TSHARE token. By doing so, they were able to stake $TSHARE to receive a greater share of $TOMB emissions above peg.

Given it is a low-supply token and is staked in The Masonry to be competitive in emissions discharged during inflationary epochs. As new money entered, and $TOMB profits entered $TSHARE the price impact was mind-boggling.

As we can see on the charts, Tomb Finance’s time has come and gone. Can it restore its dominance?

For the reasons we will explore in the next section, it may not be likely unless $FTM becomes competitive in the L1 narrative again unless they achieve a level of utility that gives them an edge. Such speculation is beyond the purview of these documents.