Fantom launches new chain Sonic swap + MEME, can it activate the ecosystem?

Author: Frank, PANews

As a dark horse of the last bull market, the public chain Fantom has been making continuous moves in this bull market. On May 23, Fantom provided a new update on the progress of its brand upgrade plan, Sonic. The Fantom Foundation announced that the community has voted to approve its first proposal regarding the upcoming Sonic chain. The proposal states that Sonic will launch a new token $S, which will be exchanged 1:1 with FTM at the time of release. In addition, Fantom will establish a new Sonic Foundation, which has completed $10 million in financing. Furthermore, perhaps to coincide with the launch of the Sonic chain, on May 21, Fantom announced a MEME competition with a prize pool of 10 million FTM for the MEME track. For Fantom, which has been active recently, will the dual approach of token exchange and MEME be able to activate the heavily promoted Sonic chain?

Public Chain Recovery, MEME Involvement

After witnessing Solana and Base trigger on-chain activity through MEME, Fantom has also launched a MEME season. On May 21, the Fantom Foundation introduced the Meme Season competition, with a prize pool reaching 10 million FTM. Based on an FTM price of approximately $0.8, the total prize pool will amount to $8 million.

According to the official introduction, this competition aims to focus on the top memecoins on Opera and the upcoming Sonic chain. It is also an important strategic measure to accompany the Sonic upgrade. The competition will be held in multiple rounds, with the first round taking place from June 1 to June 30, with a prize pool of 1 million sFTMx (FTM staked through Beethoven X).

The evaluation metrics for the competition will be determined by a combination of market capitalization, gas usage, and trading volume, with market capitalization accounting for 50%, gas fees for 35%, and trading volume for 15%. It is worth noting that trading volume from centralized exchanges or other networks outside of Opera will not be counted in this competition. The top 3 memecoins at the end of each round will be the winners.

In each round, 80% of the prize will be awarded to the holders of the top 3 winning memecoin projects, weighted by their holdings. The remaining 20% will be distributed to the teams behind these 3 memecoins. The prize distribution for the first round is as follows:

Winner 1 = 600k sFTMx (480k to holders, 120k to the team)

Winner 2 = 300k sFTMx (240k to holders, 60k to the team)

Winner 3 = 100k sFTMx (80k to holders, 20k to the team)

However, Fantom has not stipulated that the MEME projects participating in the competition must be newly issued tokens during the competition phase. Therefore, several existing MEME coins on Fantom may have a first-mover advantage. Additionally, since there are only 3 winning slots in each round, the slim chances for new projects may hinder their momentum.

MEME Popularity Still Not Activated

Perhaps to facilitate widespread user participation, the Fantom Foundation also recommended four one-click token issuance platforms on Twitter: Degen Express, Super Pump, fTails, and Bedrock Finance. According to PANews research, these platforms have similar functions to the recently popular one-click token issuance platform Pump.fun on Solana, but they differ vastly in activity levels. Degen Express has relatively high activity, but the highest market cap token is about $27,000. The other platforms are in a very quiet state. Super Pump has issued a total of 11 MEME tokens (as of May 26), all of which are in a no-trading state, with a market cap of 0.

As of May 26, this MEME competition does not seem to have started showing real effects, with only 20 new trading pairs launched on Fantom in the last 24 hours. In comparison, the data for the Solana chain on the same day was 1,252, and for the Base chain, it was 2,088. Additionally, the highest trading volume for newly launched pairs on Fantom was only 24 transactions. Perhaps with the official start of the MEME season on June 1, these data changes will be more indicative of the effects.

Token Exchange Possible, Community Unconvinced

In addition to launching the MEME competition to increase the heat around the Sonic chain, Fantom has also introduced a new token $S to fully complete the brand upgrade. The proposal regarding the Sonic Network details the governance plan for the new token $S. This proposal suggests that at the launch of the Sonic chain, the supply of $S will match the supply of $FTM to achieve a seamless 1:1 migration process. In terms of possible governance plans for the future $S token, proposals 2 and 3 suggest minting additional $S tokens for operations, airdrops, and incentivizing ecological projects.

As of now, the specific content of proposals 2 and 3 has not been officially released, but many community members have expressed doubts about these two proposals. User Paintball26 commented, "Are there any numbers for proposals 2 and 3? I strongly oppose a blank check with an unknown dilution factor, designating hundreds of millions of FTM for specific purposes and then asking for further dilution." Another user, STACHE, stated, "I don't think proposals 2 or 3 are necessary. I dare say that 5-10% of FTM will be unable to migrate due to loss, burning LP, etc. If the supply is the same from the start, then 5-10% should be enough to cover proposals 2 and 3, right? Many people's biggest concern is further dilution."

Overall, this Sonic upgrade is the most important narrative for Fantom. From the performance narrative surrounding Sonic's parallel EVM introduction and 2000 TPS processing speed in March, to the current MEME season and new token plan, it reveals Fantom's determination for revival. However, as of now, the market response to the FTM token does not seem to have fluctuated significantly due to these narratives (currently priced around $0.8, similar to the price before the Sonic launch in March). The new Sonic chain may further enhance Fantom's performance and brand influence, but a more effective attraction may still be the actual on-chain activity and a more reasonable token economic model, both of which are currently in a stage awaiting validation.