Research Summary
The report presents an Ask Me Anything (AMA) session with the Fantom team, discussing the role of Layer 1 (L1) in the era of Layer 2 (L2), the unique features of Fantom’s Sonic upgrade, and strategies to rebuild Total Value Locked (TVL) and attract more users. The team also shares their perspective on monolithic vs modular designs for scaling blockchains.
Key Takeaways
Fantom’s Perspective on L1’s Role in the Era of L2
- Layer 2 Complexity and Security Concerns: Nick S.R., Head of Socials/Growth at Fantom, argues that Layer 2 solutions introduce complexity and weaken the security of the network. He cites an instance where an L2 sequencer failed to produce blocks for over an hour, leaving users unable to transact.
- Fantom’s Uptime: Despite recent chaos with inscriptions and onchain liquidation events, Fantom has maintained 99.95% uptime, providing a reliable platform for developers.
Fantom’s Sonic Upgrade
- High Throughput Blockchain: The Sonic upgrade aims to provide the highest throughput blockchain possible, with testnet transaction speeds reaching up to 2,000 transactions per second (TPS) using real-world smart contract interactions.
- Storage Reduction: The Sonic upgrade has led to a 90% reduction in storage requirements, while remaining 100% Ethereum Virtual Machine (EVM) compatible with no hard fork required.
Monolithic vs Modular Designs
- Monolithic Design Advantages: CEO Michael Kong explains that Fantom chose a monolithic design because it allows all aspects of the platform to be optimized and made scalable from the ground up. In contrast, Layer 2s are limited by the performance of the underlying distributed ledger.
Strategies to Rebuild TVL and Attract More Users
- Supporting Creators: Sam Harcourt, Head of BD, outlines Fantom’s plan to support creators with innovative programs such as Sonic Labs, a novel approach to accelerators. Winners will share a pool of 1,000,000 FTM and receive mentorship from industry titans.
- Native Stablecoin: Fantom is exploring pathways for introducing a native stablecoin on its platform to reduce third-party risk for those holding stablecoins.
Fantom’s Endgame Plan & Vision
- Scalable Blockchain: CEO Michael Kong shares that Fantom’s endgame plan is to be the most scalable blockchain that can handle hundreds of millions of transactions daily, serving many different users and applications.
Actionable Insights
- Consider the Implications of Monolithic vs Modular Designs: Blockchain developers and investors should consider the implications of monolithic and modular designs on scalability and security when choosing a platform for development or investment.
- Monitor the Progress of Fantom’s Sonic Upgrade: The Sonic upgrade’s potential to provide high throughput and significant storage reduction could make Fantom an attractive platform for developers and investors. Monitoring its progress could provide valuable insights.
- Assess the Impact of Native Stablecoin on Fantom: The introduction of a native stablecoin on Fantom could reduce third-party risk and attract more users. Stakeholders should assess the potential impact of this development on Fantom’s growth.
