- Multiple blockchains will succeed, but not 20 or 30: Fantom Foundation CEO.
- Fantom is a layer-1 blockchain that came out in December 2019.
- Fantom is trying to compete with chains like Ethereum.
Fantom Foundation CEO Michael Kong talks to Decrypt’s Dan Roberts about how the Layer-1 blockchain competes with Ethereum and other chains, how it’s a multi-chain future, and how people misunderstood what the original blockchain was.
There are more than 20,000 blockchain projects on the market right now, and each one is trying to get a bigger share of the market and be the best. And since the crypto bear market started, the prices of these tokens have plummeted everywhere.
Fantom is one of the chains that are pretty well-known right now. According to CoinGecko, since its all-time high of $3.46 on October 28, 2021, its FTM token (number 67 by market cap) has dropped 93% and is now worth $0.22.
But the CEO of Fantom Foundation still has hope for the future, even though the market is down and there is a lot of competition.
“Competition is good because it can lead to better results and better technology,” Fantom Foundation CEO Michael Kong told Decrypt at Chainlink SmartCon in New York this week. He also said that since crypto users are used to using more than one blockchain, multiple chains will continue to exist in 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 more than one blockchain now, and I think that will continue to be the case in the future.”
Fantom is a layer-1 blockchain that came out in December 2019. Its goal is to offer an alternative to the high costs and slow speeds that Ethereum users often complain about and hope would be fixed by the now-completed Ethereum merge. Layer-1 protocols like Bitcoin, Ethereum, and Solana use their blockchains, which makes it possible to build decentralized apps on top of them.
On September 15, Ethereum made the long-awaited switch from the proof-of-work consensus algorithm, which uses a lot of energy, to the proof-of-stake consensus algorithm, which is better for the environment.
But since then, the price of ETH has dropped by 320%, and Kong thinks that many people in the Ethereum community didn’t fully understand what the merger 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 said no over and over again, saying that the point of the merge is to get rid of the proof-of-work part of the chain.”
For Kong, people’s wrong ideas about the merger had more to do with how excited people were about it than with any mistake the Ethereum Foundation made in setting expectations.
Kong said that the merge wasn’t about making Ethereum more scalable or cutting gas fees by a lot, despite what some Ethereum supporters might have thought. He also said that any disappointment people feel now “wasn’t anyone’s fault, especially not the Ethereum Foundation, which was just telling people the truth.”
And how can Fantom compete with chains like Ethereum? “We still have a competitive advantage, at least for now, in that we can handle transactions at different times,” Kong said.
What worries him most about what will happen next is the alarming language that regulators have been using. “I think the biggest problem right now is that we don’t know what the rules are,” he said. “I think that’s what makes [people in the industry] nervous.”
Kong pointed to what the SEC and CFTC have done recently. The SEC said that all Ethereum transactions are governed by U.S. law, and the CFTC 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 cause people to think twice about blockchain technology and not want to get into any trouble,” he said. “So it kind of sends a chill through the business world.”