The Fantom network is about to launch the sub-second trading system Sonic. What impact will it have on the current Layer 2 landscape?

Recently, the cryptocurrency market has seen the established project FTM once again attract investors' attention. In March alone, the price of FTM skyrocketed by 150%. Even in the past week, when Bitcoin and Ethereum pulled back due to interest rate hikes in Japan, leading to an overall market decline, FTM still rose against the trend by 30%. Such an astonishing performance not only excites investors but also deepens the market's focus on FTM's potential.

There are several reasons for the resurgence of FTM. Firstly, the strong promotion by Andre Cronje, a director of the Fantom Foundation, has injected new vitality and confidence into Fantom. Secondly, the market holds positive expectations for the upcoming launch of Fantom Sonic. Cronje stated that Sonic will surpass "parallel EVM", triggering a disruptive revolution, which further enhances investor confidence. This wave of FTM's price increase may just be the beginning.

The Established Public Chain Fantom Rises Again

Fantom was founded in January 2018 by computer scientist Ahn Byung and later taken over by smart contract developer Michael Kong. The project aims to overcome the limitations of the previous generation of blockchains and achieve a balance among the three key features of scalability, security, and decentralization.

In September 2018, Andre Cronje joined Fantom as a DeFi architect and later became a board member of the foundation. As a leading figure in the previous DeFi boom, Cronje created star projects such as Yearn Finance and Phantom, and also contributed to several important projects including Keep3r Network and Multichain.

Cronje's involvement has made significant contributions to the technological breakthroughs of Fantom, especially in promoting multichain operations. Fantom adopts the aBFT consensus mechanism Lachesis, which is based on an improved DAG, enabling transactions to be completed almost instantly and resisting up to one-third of malicious participants. This makes Fantom faster, cheaper, and more secure than previous technologies, addressing the long-standing blockchain trilemma faced by Layer 1.

In 2019, Fantom launched the first generation of EVM-compatible Opera mainnet, providing full smart contract support through Solidity and EVM, allowing Ethereum DApps to migrate seamlessly. With its modular architecture, Fantom can also provide custom blockchains for digital assets. After the launch of Opera, Fantom was once regarded as the "Ethereum killer."

In March 2022, rumors of Cronje leaving DeFi caused the price of FTM to plummet, dropping from a high of $3.0 to $0.19, and lingering below $0.6 for a long time. It wasn't until the beginning of this year that Cronje frequently released updates on the Fantom ecosystem, reigniting investment enthusiasm.

Since the beginning of the year, FTM has surged nearly 200%. Part of the growth comes from Cronje's active promotion, as he even used memes to promote Fantom, claiming that Sonic will be more efficient than parallel EVM. Despite skepticism, Fantom has attracted significant attention in the short term. Meanwhile, Fantom's technology has also made significant breakthroughs, with the foundation announcing the launch of the Sonic upgrade this year, which Cronje claims is expected to trigger a disruptive revolution.

Introduction to Fantom Sonic

Fantom Sonic is the latest technological upgrade of the Fantom network, aimed at enhancing network scalability and efficiency. In October 2023, the Fantom Foundation announced the launch of the Sonic program, an important milestone that the community and DeFi ecosystem have long awaited.

Sonic introduces multiple innovative technologies and optimization solutions:

1. Fantom Virtual Machine ( FVM ): Provides a more efficient smart contract execution environment than EVM, accelerating deployment and execution speeds.

2. Carmen Database: The new data storage solution reduces storage requirements by 90%, significantly lowering the amount of data at the nodes.

3. Lachesis consensus mechanism optimization: reduce information redundancy, improve decision-making efficiency, and accelerate transaction confirmation.

4. High throughput and low latency: The theoretical trading limit exceeds 2000 transactions per second, with an average finalization time of 1 second.

5. Smooth Upgrade: Fully compatible with existing smart contracts, services, and tools on Opera.

Sonic releases the logo, marking a new chapter for Fantom. After the upgrade, Fantom features no-fork upgrades, true parallel transactions, top-tier TPS, and finality, making it an advanced platform distinct from other Layer 1s.

It is worth paying attention to how Fantom will capture market share from other Layer 1 protocols in the future. Currently, its market capitalization is only 3 billion USD, but with the development of Sonic, Fantom has enormous potential.

The Fantom ecosystem's DeFi occupies a significant portion of the market, and Sonic is expected to help it reach new heights. Although the community hopes to achieve an ecological explosion through the Meme coin craze, promoting the Meme ecosystem is not the best choice. There are already over 250 projects in the Fantom ecosystem, but daily active users are only around 50,000, which still falls short compared to Ethereum, Solana, and others.

Compared to Solana, Fantom places more emphasis on security. Among the 254 ecological projects, 118 are DeFi projects, accounting for nearly half. Therefore, prioritizing the development of the DeFi ecosystem is more important. Collaborating with the founder of Frax may open new paths for the revival of DeFi.

The Fantom Foundation has high hopes for Sonic's development in the DeFi space. The plans include supporting liquid staking tokens, a new staking mechanism, and decentralized cross-chain solutions. Executive Director Kong stated that Sonic will create shared sequencers for L1 and L2 chains to handle over 180 million transactions daily, rebooting Fantom with a community-centric approach.

Overview of the Fantom Sonic Ecosystem Projects

To attract high-quality projects, the Fantom Foundation established the Sonic Labs incubator in December last year. The recently announced startup accelerator program showcased award-winning projects that highlighted the appeal of the Fantom ecosystem, covering areas such as perpetual DEX, social protocols, P2P lending, green technology, and RPG blockchain games.

1. Perpetual DEX project Lynx: Allows any protocol to list tokens as collateral assets, enabling users to invest with various tokens without the need to sell their assets.

2. Social Protocol Thunder Dome: A social finance service built on Fantom that enables community interaction through tradable tickets.

3. P2P Lending Platform Debita: A non-Oracle lending protocol on Fantom, providing decentralized lending solutions.

4. Green tech startup KiriCoin: Focused on tracking and rewarding individual sustainable behaviors to combat climate change.

5. RPG blockchain game Froqorion: Set against the backdrop of an ancient frog civilization, players form teams to complete quests and adventures.

Summary

After the Cancun upgrade, the market is focused on solving scalability issues through Layer2. The emergence of Sonic provides a new idea for enhancing scalability on Layer1 public chains, with its 2000 TPS and sub-second performance surpassing most Layer2 solutions.

In this bull market, Fantom may not be the most notable project, but it is undoubtedly the most anticipated. With Cronje's return, the Sonic upgrade, and the revival of the DeFi ecosystem, Fantom is expected to rise again.