Fantom, the emerging narrative of the public blockchain: Sonic emerges to reignite the performance race

Over the past month, Fantom’s governance token FTM has demonstrated exceptional market performance compared to numerous public chains. Starting at US$0.42 on February 24, it surged to a peak of US$1.23 on March 21, marking a nearly threefold increase. Amidst a sea of Meme trends, achieving such remarkable market performance can be deemed as remarkable.

Editor’s note:

The public blockchain serves as the foundation for the advancement of blockchain technology. Throughout the evolution and progress of blockchain technology, the innovation and development of public chain technology have played a significant role. From the introduction of Bitcoin to Ethereum, which introduced smart contracts to the crypto realm, to the emergence of new public chains like Solana, expanding the possibilities for Web3 as a large-scale application. During each bull market, new public chain leaders emerge as the guiding light of the market and the forefront of technological innovation. To gain a deeper insight into the crypto landscape, PANews is launching a series of articles titled “New Narratives of Public Chains” to delve into the latest advancements, technological shifts, market potential, and more of each public chain’s unique narrative and potential.

Over the last month, Fantom’s governance token FTM has shown remarkable market performance compared to numerous public chains. Starting at US$0.42 on February 24, it surged to as high as US$1.23 on March 21, marking an almost threefold increase. Amid various market trends, achieving such exceptional market performance can be characterized as outstanding.

“I am even more confident in Fantom today than I was in 2019. The team is 100 times stronger than before. The financial position is 250 times stronger than before. Our technology stack is 160 times faster and more optimized. If you thought Fantom was going to zero or disappear in a sea of irrelevant blockchain projects, I am willing to accept this contrarian bet.” Andre Cronje, known as the godfather of DeFi, reiterated his confidence in Fantom on Twitter. Despite some setbacks, AC stands by Fantom. AC’s confidence may stem from Fantom’s new technology, Sonic, released on March 25. According to Fantom officials, “The Fantom team has been diligently working over the past two years to develop our new technology, Sonic, which is the most scalable and secure blockchain technology to date. Sonic, capable of processing 2,000 TPS at sub-second speeds, marks a significant improvement compared to Opera’s 200 TPS.” Sonic technology is poised to become one of Fantom’s key narratives in the coming years.

With the backing of AC, Fantom is rising above the challenges of the multichain incident. In the current bullish market, PANews conducted an analysis of Fantom’s recent developments and identified that the upcoming Sonic upgrade, the establishment of the Meme currency ecosystem, and the return of AC could serve as pivotal factors in Fantom’s resurgence during this bullish market phase.

Sonic upgrades to become the highlight of Fantom

The Sonic upgrades are undeniably the current focal point of Fantom’s narrative content. On March 25, Fantom founder Michael Kong unveiled the initial phase of Sonic through a blog post. This post introduces the performance enhancements and management solutions associated with Fantom Sonic. The introduction of Fantom Sonic highlights its capability to achieve a TPS increase of over 10 times. Historically, the success stories of public chains have been closely tied to performance, as seen in the achievements of prominent public chains like Solana and Avalanche.

For Fantom, the technical aspect is evidently the primary narrative content at present. Both the Fantom Foundation and AC have been actively promoting the performance advantages of Sonic. In essence, Sonic’s key performance enhancement lies in efficiency improvement. By combining Directed Acyclic Graph (DAG) and Byzantine Fault Tolerance (BFT), Fantom has implemented a consensus mechanism that eliminates the need for a centralized leader, aligning with the existing Opera chain. Sonic’s performance has seen significant enhancements compared to its predecessor.

Andre Cronje made a notable comparison between EVM and FVM on Twitter:

The base Ethereum Virtual Machine (EVM) is capped at around 200 TPS, and by adding optimistic parallelism (best-case scenario with foreseeability), this can be improved by up to 40 TPS, for a total maximum of 240 TPS.

The base Fantom Virtual Machine (FVM) is capped at around 30,000 TPS, and by adding brute force parallelism (bad), this can be improved by up to 4,500 TPS, for a total maximum of 34,500 TPS.

So how to understand the changes brought about by this technology? We can explain it with a simple analogy:

Imagine that you are running a fast food restaurant (Ethereum main chain) and customers (transactions) are queuing up to order and pick up their food. In order to improve service efficiency, you come up with two solutions:

Parallel EVM: Just like adding multiple ordering windows and kitchens in a fast food restaurant, allowing multiple employees to serve customers at the same time. Each ordering window and kitchen can work independently, but they are still in the same fast food restaurant and follow the same rules and procedures. By processing customers’ orders in parallel, fast food restaurants’ service speed and customer satisfaction are improved.

Sonic: Sonic works like the introduction of a highly optimized central kitchen that can produce large quantities of standardized food in a short period of time and then quickly distribute it to various branches (Layer 1 and Layer 2). This central kitchen (Sonic) uses advanced equipment and processes to produce food at an extremely high speed and efficiency, far exceeding the production capacity of a single fast food restaurant or branch.

If the technology can be realized as scheduled, it will likely bring more new projects and users to the Fantom ecosystem. To this end, the Fantom Foundation has also proposed plans to expand and accelerate the Sonic Labs funding program (Sonic Labs is a startup accelerator program launched by Fantom in February this year to promote innovation within its new Sonic technology stack. The program will select up to five projects, each project will receive 1 million FTM (approximately US$294,000) in funding, technical support, joint marketing and mentor guidance). It also said that it will also launch a series of reward activities for users. It is expected that the new chain will be launched this summer. Launched in late autumn or early autumn.

Can the Official Meme Coin Recreate the Solana-Style Legend with Active Goods Participation?

The Meme currency ecosystem has evolved into a battleground for public chains in the current bull market, where winning in the Meme space can lead to broader success. Recently, the Fantom Foundation introduced the $sGOAT Meme coin, which quickly gained over 1,000 holders on Fantom within a day of its launch. Alongside Fantom’s official upgrade announcements, highlighting performance enhancements and reduced gas fees, Fantom has laid the groundwork for Meme’s ecosystem growth. Drawing comparisons with Solana further enhances Fantom’s positioning. With active promotion of Meme-related information, Fantom’s interest in Meme has significantly increased.

Fantom Foundation retweeted meme coin $sGOAT

The surge in Meme coins often signifies a thriving ecosystem. Currently, there are 254 projects within the Fantom ecosystem. In February 2024, there was a sudden spike in new addresses, with a peak of 570,000 new addresses created in a single day. However, despite recent official initiatives, the daily addition of new addresses remains relatively low, with only a few thousand added each day. The daily issuance of new Meme coins hovers around 100, with an average of 20 to 30 coin holders. According to tokenterminal data, Fantom’s average daily active users over the past month stand at approximately 50,000. Overall, there remains a significant disparity in ecosystem activity compared to public chains like Ethereum and Solana.

Fortunately, Fantom may still possess a trump card capable of revitalizing activity in the Meme coin market: the return of Andre Cronje. AC has been a prominent figure in the crypto world, and his influence is considerable. In March 2022, AC’s departure from Fantom led to a 10% drop in YFI and a 20% drop in FTM. However, when AC announced his return to Fantom in November 2022, FTM surged by 44%. AC is now actively engaging on Twitter once again, generating momentum for Fantom akin to the impact of Solana’s founder advocating for Meme coins previously. Should AC, renowned as the godfather of DeFi, endorse Meme coins, the impact could be significant.

Teaming Up with Frax to Restore the DeFi Ecosystem

The primary challenge in the recovery process may lie in the lingering issues stemming from the Multichain incident. During the incident, Fantom’s ecosystem suffered losses amounting to approximately one-third of the total losses, around US$65 million. Recently, the Fantom Foundation filed for the liquidation of the Multichain Foundation in court to aid in the recovery and distribution of lost or frozen assets. Despite these efforts, the Twitter comments sections of AC and the Fantom Foundation are flooded with numerous complaints regarding user losses resulting from the Multichain incident. Following the incident, Fantom’s on-chain Total Value Locked (TVL) volume experienced a significant decline, plummeting from an average of $200 million to approximately $70 million, with a partial recovery reaching a maximum of $150 million thus far.

Out of the 254 ecological projects listed by Fantom, 118 are Defi projects, making up nearly half of the total. The restoration of the Defi ecosystem emerges as a key priority for Fantom.

On March 28, Fantom unveiled updates on a new round of funding for Sonic, with the first angel investor being the founder of FraxFinance. The collaboration with Frax could potentially pave the way for new avenues in Fantom’s DeFi recovery. However, the extent of cooperation between the two parties is yet to be closely monitored.

There is currently a rising need for high-performance, scalable blockchain infrastructure. Should Fantom Sonic succeed in achieving its objectives of high performance, scalability, and fostering a vibrant and diverse ecosystem, it is poised to emerge as a significant player in the blockchain infrastructure sector.

Looming Threats Await, Their Return Uncertain

In the Layer 1 arena where Fantom operates, formidable adversaries like Ethereum and Solana pose significant challenges.

Fantom has devised targeted marketing strategies tailored for these two ecosystem rivals. Firstly, leveraging its performance advantages over Ethereum’s parallel EVM. AC stated on Twitter: “Parallel technology isn’t even among the top three improvements in Fantom’s technology.”

Regarding Solana, a more formidable competitor, Fantom focuses on critiquing Solana’s performance stability. A report on Fantom for the first quarter of 2024 by Reflexivity Research, shared by the Fantom Foundation, highlighted Fantom’s 99.9% uptime since its inception, contrasting it with Solana’s noted instances of downtime.

However, uncertainties loom over Fantom. While AC’s return has injected activity into Fantom to some extent, his history of repeated departures and comebacks introduces an element of unpredictability. Any significant changes in team members or missteps in key decisions could potentially have a detrimental impact on the project’s development and community trust.

Furthermore, Fantom Sonic has yet to undergo performance verification, and its current performance advantages are based on testing environments. As the upgrade remains incomplete, its technical implementation must still prove its reliability through real-world applications and large-scale transactions. In April 2023, AC announced Fantom’s plans to launch its own crypto bank within the year, a matter that remains unresolved to date.

Intense competition in the blockchain infrastructure sector and shifts in the industry’s narrative landscape present significant challenges.

The primary market pressure facing Fantom in this bullish market stems from the fierce competition with other Layer 1 and high-performance blockchain projects. With industry dynamics evolving, it has become evident that garnering substantial recognition solely based on performance metrics as the primary narrative is a challenging feat. Perhaps, Fantom has always been rich in narrative content, and its vision of narrative realization may hold greater appeal to the market.

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