- Fantom announced that Ethereum would enable the token migration.
- While FTM’s price rose, reaching $1 could be a challenge in the near term.
Layer-1 blockchain Fantom [FTM] has revealed a new set of key details as we approach the final stages before the launch of the Sonic upgrade.
For those unfamiliar, Sonic Upgrade is the next iteration of Fantom which the project claims would increase the number of Transactions Per Second (TPS) to 2000.
However, in addition to improved performance, the recent upgrade mentioned Ethereum [ETH] as an important player in development.
Ethereum to ease the transition
According to the memo Targeted at FTM holders, the project would launch a new layer-1 and layer-2 chain. For both chains, the project said holders of the token would be able to bridge assets to Ethereum.
It explained,
“The Sonic Chain will be a layer 1 platform that connects to Ethereum via a custom layer 2 bridge, allowing Sonic to tap vast amounts of liquidity, users and protocols. This allows the network to combine the low cost, scalability and speed of a layer 1 with the security of a layer 2 bridge to access native ETH and other assets on Ethereum.”
Previously, Fantom had said it planned to launch a token for the launch with the ticker “S” for Sonic. As such, FTM holders can migrate their tokens to S at a 1:1 ratio using Ethereum.
At the time of writing, FTM’s price was $0.86, up 6.22% in the last 24 hours. The price increase may be related to the increasing optimism focused on the upgrade and the introduction of tokens.
Additionally, AMBCrypto noted that the 24-hour active addresses on the Fantom jumped on May 17. The increase implied that the number of successful transactions on the network was increasing.
Source: Santiment
However, at the time of writing, the metric had fallen, implying that the increase was short-lived. Likewise, on-chain data showed that one-day circulation was down.
Network activity is struggling to sustain itself
At the time of writing, the FTM circulation stood at 2.97 million, confirming the idea that the tokens involved in transactions had decreased.
If these numbers continue to decline, it could be difficult for FTM’s share price to approach $1.
But that doesn’t mean the value wouldn’t increase. At the same time, a significant dive would not be possible. We also looked at the Total Value Locked (TVL).
According to DeFiLlama, Fantom’s TVL was $133.38 million. This was one significant increase in the past 30 days. The increase indicated an improvement in the health of protocols operating under the chain.
Source: DeFiLlama
Realistic or not, here is FTM’s market cap in ETH terms
However, this value remains low compared to 2022, when the value reached an incredible $7 billion. As it stands, it may be difficult for Fantom to experience that level of locked assets again.
But when it launches the Sonic upgrade, confidence in the chain could return and it could experience a notable influx of deposited assets.