There are currently over 20,000 blockchain projects on the market, each competing with the others to gain market share and dominance. And Since the onset of the crypto bear market, the price of these tokens have tanked across the industry.
For now, Fantom is among the relatively better-known chains. Its FTM token (No. 67 by market cap) is down 93% since its all-time high of $3.46 on October 28, 2021, and currently trading at $0.22, according to CoinGecko.
But the down market and crowded field of competition have not deterred the CEO of Fantom Foundation’s hope for the future.
“Competition is good because it can get you a better result, better technology,” Fantom Foundation CEO Michael Kong told Decrypt at Chainlink SmartCon in New York this week, adding that because crypto users have gotten used to using more than one blockchain, multiple chains will survive into the future.
“I think in the future, you might not have 20 or 30 different chains… but I think you’ll have a few chains out there, and I think they will get a large market share,” Kong said. “People use multiple different blockchains, that’s the case today, and I think that will continue to be the case into the future.”
Launched in December 2019, Fantom is a layer-1 blockchain aiming to provide an alternative to the high costs and low speeds Ethereum users often complain about and hoped that the now-completed Ethereum merge would resolve. Layer-1 protocols like Bitcoin, Ethereum, and Solana utilize their own blockchain, allowing decentralized applications to be built atop their protocol.
On September 15, Ethereum completed its long-awaited transition from the energy-intensive proof-of-work consensus algorithm to the more environmentally friendly proof-of-stake consensus mechanism.
But ETH is down 320% since then, and Kong believes many in the Ethereum community didn’t quite understand what the merge would mean.
“I think a lot of people were expecting, wrongly, in the community, that the Ethereum merge would significantly increase network throughput or significantly make the technology a lot more scalable. But the Ethereum Foundation repeatedly came out and said no, the purpose of the merge is to basically remove the proof-of-work component of the chain.”
For Kong, the misconceptions surrounding the merge had more to do with the community’s excitement and less with any mistake by the Ethereum Foundation in managing expectations.
The merge was “not about increasing scalability, not about reducing gas fees dramatically,” Kong said, despite what Ethereum flag-wavers might have hoped. Any disappointment people have in the aftermath “wasn’t really the fault of anyone, in particular, or the Ethereum Foundation, who were just telling people the truth,” he added.
And as for how Fantom can compete with Ethereum and other chains? “We still have our competitive advantage, at least for the time being, when it comes to our ability to process transactions asynchronously,” Kong said.
What concerns him most moving forward is the alarming recent rhetoric from regulators. “I think the big negative at the moment is the regulatory uncertainty,” he said. “I think that’s what’s scaring a lot of people [in the industry].”
Kong pointed to the recent actions of the SEC, which claimed that all Ethereum transactions fall under U.S. jurisdiction, and the CFTC, which sued Ooki DAO and its founders last week.
“To me, the regulatory uncertainty about who’s supposed to regulate what, like the SEC and the CFTC publicly disputing with one another, is really what could damper innovation, and really cause people to think twice about blockchain technology and not want to get into any trouble,” he said. “And so it kind of has a bit of a chilling effect on the industry.”