- Fantom is on the cusp of a major upgrade.
- The once-thriving blockchain has enjoyed its best week since the details of that upgrade were unveiled in March.
Investors are pouring money into the beleaguered Fantom blockchain ahead of Sonic, a major upgrade expected to bring improved performance as well as a series of airdrops.
Fantom’s token, FTM, is up 25% since validators — the distributed network of computers that run the blockchain — began upgrading their software on Tuesday.
Since Monday, the total value of crypto deposited in Fantom’s DeFi ecosystem is up 20%, to $147 million, according to DefiLlama data.
After the upgrade is complete, Fantom will process up to 2,000 transactions per second and offer higher security, simplified liquid staking, and, eventually, greater throughput using zero-knowledge technology, Fantom Foundation CEO Michael Kong previously told DL News.
Fantom currently processes a maximum of 200 transactions per second, according to the Fantom Foundation.
Additionally, some users will qualify for airdrops, according to Kong.
“The more that you interact with the network, the more value you accrue to the network, that’s going to lead to a higher airdrop,” he said.
Kong declined to share more information about the forthcoming airdrops to avoid attracting mercenary users seeking to “game” the blockchain.
Two-thirds of Fantom’s 60 validators have to upgrade in order for Sonic to take effect network-wide. As of Friday, 25 validators had upgraded their software.
The upgrade will test whether Fantom can mount a comeback after a devastating hack drained a related protocol in 2023.
Founded by infamous DeFi stalwart Andre Cronje, Fantom was once a top five blockchain with almost $8 billion locked in its DeFi ecosystem.
It was heralded as an “Ethereum killer,” along with other low-cost, high-speed networks like Avalanche, Solana, Terra, and Tron.
Like the rest of the crypto economy, it tanked after the collapse of Terra in 2022.
It was dealt another blow last July, when crypto “bridge” Multichain suffered an apparent hack.
Multichain said $125 million in cryptocurrencies was transferred to “unknown addresses abnormally.” The company also confirmed rumours its co-founder had been arrested by Chinese police that May.
So-called bridges like Multichain enable the transfer of tokens between otherwise incompatible blockchains.
The hack rocked Fantom users, many of whom had used Multichain to bring assets from other blockchains onto Fantom.
Users would send crypto tokens such as Ether or USDC to Multichain. The protocol would then mint a Fantom-compatible version of the deposited tokens for use on Fantom.
When cryptocurrencies deposited on Multichain were stolen, many assets on Fantom became effectively unbacked.
The total value of crypto locked in Fantom was roughly $260 million just before the hack. Until Kong unveiled Sonic in March, it had hovered below $100 million.
Aleks Gilbert is a New York-based reporter covering DeFi. Got a tip? Email him at aleks@dlnews.com.