Fantom Sonic: Can the Integration of Ethereum Boost the Price of FTM?

  • The news about Ethereum facilitating the token migration for Fantom was recently revealed.
  • Although FTM’s price has been on the rise, hitting $1 might pose a challenge in the short run.

Exciting developments are in the works for layer-1 blockchain Fantom [FTM] as it gears up for the final phases leading to the Sonic upgrade launch.

For those not in the loop, the Sonic upgrade represents the next stage for Fantom, promising to increase the Transactions Per Second (TPS) to an impressive 2000.

In addition to the performance enhancements, the recent upgrade highlighted Ethereum [ETH] playing a crucial role in the project’s advancement.

ETH’s Contribution to the Transition

According to the communication directed at FTM holders, the project plans to introduce a new layer-1 and layer-2 chain. Both chains will enable token holders to bridge assets to Ethereum.

The project explained,

“The Sonic chain will serve as a layer-1 platform connected to Ethereum through a custom layer-2 bridge, opening up access to a wide range of liquidity, users, and protocols. This strategic integration combines the cost-effectiveness, scalability, and speed of a layer-1 with the security of a layer-2 bridge for seamless interaction with native ETH and other assets on Ethereum.”

Prior to this, Fantom had announced the launch of a token for the upgrade under the ticker “S” for Sonic. Consequently, FTM holders can transition their tokens to S at a 1:1 ratio using Ethereum.

As of now, FTM’s price stands at $0.86—reflecting a 6.22% surge in the last 24 hours. The price uptick could be attributed to the growing optimism surrounding the upgrade and token introduction.

Moreover, AMBCrypto observed a spike in 24-hour active addresses on Fantom on May 17th, indicating a surge in successful transactions on the network.

Fantom network activity drops as the price increases

Source: Santiment

However, the metric has decreased at present, suggesting that the surge was short-lived. Similarly, on-chain data indicates a decline in one-day circulation.

Challenges in Network Activity Sustainment

As of now, FTM circulation stands at 2.97 million, indicating a decrease in tokens involved in transactions.

If this trend continues, it might be challenging for FTM’s price to reach the $1 mark.

Nevertheless, this doesn’t mean there won’t be an increase in value. On the flip side, a significant decline remains a possibility. Additionally, we examined the Total Value Locked (TVL).

As per DeFiLlama, Fantom’s TVL stood at $133.38 million, signifying a noteworthy increase in the last 30 days. This growth indicates an enhanced health of protocols operating within the chain.

Fantom's total value locked increasesFantom's total value locked increases

Source: DeFiLlama

Here’s an analysis of FTM’s market cap in ETH terms

However, this value still remains significantly lower compared to 2022 when it reached a staggering $7 billion. Achieving that level of locked assets again might pose a challenge for Fantom.

Nevertheless, with the launch of the Sonic upgrade, confidence could be restored in the chain, potentially leading to a substantial influx of deposited assets.

Next: Is ​​XRP set for a 40% rise? Key levels to watch this week

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