The Fantom Foundation has recently disclosed its plans to establish the Sonic Foundation and Sonic Labs in preparation for the launch of its Sonic blockchain.
In an announcement on Thursday, the foundation expressed its commitment to leveraging its technology and revealed additional details about the upcoming developments.
Fantom Introduces Sonic Chain
According to the foundation’s blog post, with the completion of the upgrade for their Opera chain on the horizon, Fantom is directing its focus towards creating a new “high-throughput” chain called Sonic (S).
The introduction of the Sonic network will coincide with the establishment of the Sonic Foundation, which will assume responsibility for governance and treasury management functions. Additionally, Sonic Labs will spearhead the growth of decentralized applications (dApps), partnerships, and user engagement.
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Developed under the guidance of Professor Bernhard Scholz, a virtual machine developer, and led by decentralized finance (DeFi) expert Andre Cronje, the Sonic chain represents a new type of Layer-1 platform with a native Layer-2 bridge connected to the Ethereum (ETH) network.
The Sonic chain is reportedly designed to serve as a Layer 1 solution connected to Ethereum via a Layer 2 bridge. This integration is intended to allow Sonic to leverage Ethereum’s liquidity, user base, and protocols.
As a result, the network will combine the benefits of a Layer-1 platform, such as affordability, scalability, and speed, with the security of a Layer-2 bridge, providing access to native ETH and other assets on Ethereum.
$10 Million Raised In Strategic Funding Round
Regarding the “S” token, a recent governance vote has secured compatibility and migration between the decentralized platform’s native token FTM and S on a 1:1 basis.
Fantom also announced the successful completion of a $10 million strategic funding round led by Hashed, one of Korea’s cryptocurrency funds. This funding initiative for the foundation is expected to expand further in the coming months.
In addition to Hashed, UOB Ventures, Signum Capital, and Aave (AVE) Foundation, along with angel investors Stani Kulechov, Robert Leshner, Michael Egorov, Fernando Martinelli, Tarun Chitra, and Sam Kazemian, and individual partners from UOB, have all provided support during the funding round.
The capital raised in the latest round of funding will be used exclusively to support strategic growth initiatives and ecosystem development within the Fantom network, according to the foundation’s statement, which concluded by saying:
Our team is steadfast in exploring how the Sonic chain can impact and elevate several different DeFi and real-world use cases. Industries and applications such as real-world assets, perpetual DEXs, payments, trading, and high-transaction-based games, can be transformed by the speed and high throughput of Sonic.
FTM Faces Potential Downtrend Continuation
Despite these developments, the FTM token has exhibited a lackluster response to the successful funding round and the potential benefits of the Sonic chain.
As a result, the token has declined by over 4% within a 24-hour period, putting a significant level of support for the native token at risk.
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Currently trading at $0.8033, the FTM token’s immediate prospects hinge on the crucial $0.7994 support level. A breach of this support could lead to further price declines, with the next major support at $0.755.
On the other hand, if renewed bullish momentum and increased buying pressure emerge, the token may encounter resistance at the $0.844 and $0.8750 levels before potentially retesting the key $0.9 zone. Reclaiming the $1 milestone remains pivotal for the token’s overall outlook.
Featured image from Shutterstock, chart from TradingView.com