It seems that DeFi users are waking up to the diversity of Layer 1 solutions that the crypto industry has to offer. The growth of these chains has been explosive in 2021 and Fantom was no exception.
Liquidity was coming in slowly throughout the year until abruptly surging in October and hitting an ATH of almost $6 Billion.
High liquidity incentivized the creation of many new protocols and farming opportunities and, if you follow this guide closely you will be able to utilize these protocols and opportunities in 20 minutes or less!
Metamask Setup #
The setup process is the same for any other chain. Open your Metamask wallet and from the dropdown menu click on “Custom RPC” or “Add Network”.
To complete the setup enter the following info:
Network Name: Fantom Opera
RPC Url: rpc.ftm.tools – an improved Fantom gateway
Block Explorer URL: Fantom (FTM) Blockchain Explorer
Click “save” and you are all set up for farming!
Funding Your Wallet #
In order to be able to execute transactions on the Fantom network you will need FTM tokens and they can be obtained in a couple of ways.
The Fantom Foundation has aggregated a list of exchanges that offer FTM. Check out if you can use any of them and if they offer direct withdrawals to the FTM network. After that simply convert some fiat or crypto into Fantom and withdraw it to your Metamask wallet.
As an alternative you can look for fiat onramps. Transac Finance allows users to purchase many different coins and deposit them directly to their corresponding network. Payments are settled via a bank transfer or card payment.
Those that can’t use any of the options mentioned above will need to bridge assets from other chains. It is important to keep in mind that your Fantom wallet will be empty when you create it and if you have no FTM in it you will not be able to transact with your funds even if you manage to bridge them.
If you do find yourself in this situation simply get some FTM tokens from a faucet and simply swap some of your bridged assets for more.
As always, Vfat tools will allow you to explore almost every single farming opportunity available on Fantom. There is even a DeFi protocol created by the Fantom Foundation so those with trust issues can stake and delegate their FTM tokens in a protocol created by the Foundation itself.
Those that venture outside of the default Fantom DeFi protocol will encounter protocols like Spooky Finance which is one of the largest market makers on Fantom.
To start farming on any of these you will need to identify your preferred farming pair first.
After the decision is made the liquidity pool will require equal amounts of the two underlying assets. For example, if you are depositing FTM and Link you will need the same USD value of both because they are deposited at a 50/50 rate.
Deposits are created through the liquidity option on the protocol, so look for “add liquidity” buttons or something similar. After the deposit is made you will receive LP tokens that represent your liquidity position on the protocol. These tokens are then deposited in the corresponding farm and as soon as they are staked, they will start generating yield in accordance to the APY or APR percentages.
Fantom has been growing in popularity lately mostly thanks to the low fees. Those that want to join the trend should always conduct proper research before getting into farming. Impermanent loss is just one of many risks that liquidity providers take when depositing funds in new or lesser-known protocols.
While farming can be a great way to generate additional passive income it is also important to be informed about the risks. Understanding the risk to reward ratio will always help new farmers understand how much of their portfolio they are willing to risk for extra income.