Fantom to launch its largest upgrade with a new high-throughput L1 blockchain and a native L2 bridge to Ethereum.
- Fantom has laid out the Sonic upgrade and governance proposals. Sonic upgrade to boost Fantom in the long run, as indicators say.
Fantom [FTM], rebranded as Sonic Labs, has geared up for its largest upgrade with the launch of Sonic testnet. This upgrade introduces a new high-throughput layer-1 blockchain with a native layer-2 bridge to Ethereum [ETH].
Sonic aims to combine the low cost, scalability, and speed of L2 with the security of L1, targeting 10,000 TPS and already reaching 2,000 TPS on the testnet. The full launch is expected in late Q4 2024.
Messari Q2 2024 report highlighted the key developments within Sonic Labs, including four crucial governance proposals.
Source: X
Alongside the approval of a 190.5M S token airdrop to reward users, Sonic Labs has also sanctioned 1:1 compatibility between the FTM and S tokens and a revamped reward system for validators and builders, as detailed in a thread on X,
The thread read,
“This proposal approved minting 190,500,000 $S for airdrops that will reward users of Opera and #Sonic.”
These proposals aim to build a community-approved Sonic network and foster innovation through the Sonic bounty program.
This offers rewards for developing apps across various sectors like lending, NFTs, payments, and AI.
FTM falling wedge pattern breakout
Fantom [FTM] has been in a downtrend but broke out of a falling wedge pattern on the daily time frame. Then reached the $0.50 price level before pulling back to around $0.40, a crucial support zone.
The $0.4-area has previously pushed the price 37.48% higher, presenting a potential opportunity for traders to enter the market and target $0.50 again.
With the Sonic upgrade on the horizon, FTM price could see a rally, either immediately or after more fundamentals come into play.
Source: TradingView
Will the Sonic upgrade reverse FTM’s weekly losses?
Fantom’s [FTM] market cap was approximately $1.14B, with a trading volume of $62M, yielding a 5.53% volume-to-market ratio. This indicated that FTM’s market stability was due to just enough liquidity.
According to CoinMarketCap, FTM price fluctuated by 17.83% in the last seven days as at press time, but the upcoming Sonic upgrade could trigger a reversal of these losses as the circulating supply is 2.8B out of a total 3.2B.
Source: CoinMarketCap
Market sentiment and potential upside
Additionally, FTM’s Open Interest decreased by 3.57% to $112.87M. However, the combination of Open Interest and Funding Rates, resulting in an OI-Weighted Funding Rate of 0.0065%, indicated a slight bullish sentiment.
The FTM chart has consistently demonstrated strength in the OI-Weighted Funding Rate over time, providing another significant confluence to the anticipated bullish breakout bias for FTM.
Source: Coinglass
Lastly, combining the OI-Wighted Funding Rate with the recent Social Dominance and volume increases related to the Sonic upgrade, suggested that FTM could be poised for an upward move.
Source: Santiment
These development activities and Weighted Sentiment further support the potential for FTM price increase. And then, timing will greatly depend on how quickly the Sonic upgrade influences market fundamentals.
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