Several blockchains will succeed, “but not 20 or 30”: Fantom Foundation CEO

There are currently over 20,000 blockchain projects on the market, each competing with the others for market share and dominance. And since the beginning of the crypto bear market, the price of these tokens has skyrocketed across the industry.

Currently, Fantom is among the relatively more well-known chains. It is The FTM token (No. 67 by market cap) is down 93% since its all-time high of $3.46 on October 28, 2021, and is currently trading at $0.22, according to CoinGecko.

But the declining market and crowded competitive fields have not deterred the CEO of the Fantom Foundation’s hopes for the future.

“Competition is good because it can give you a better result, better technology,” said Fantom Foundation CEO Michael Kong Decrypt at Chainlink SmartCon in New York this week, adding that because crypto users have become accustomed 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’ll get a big market share,” Kong said. “People are using several different blockchains, that’s the case today and I think it will continue to be the case in the future.”

Launched in December 2019, Phantom is a layer-1 blockchain that aims to provide an alternative to the high costs and slow speeds Ethereum users often complain about and hoped the now-completed Ethereum merger would address. Layer-1 protocols such as Bitcoin, Ethereum, and Solana use their own blockchain, allowing decentralized applications to be built on top of 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 effort consensus mechanism.

But ETH is down 20% since then, and Kong believes many in the Ethereum community didn’t fully understand what the merger would mean.

“I think a lot of people had expected, wrongly, in the community, that the Ethereum merger would significantly increase network throughput or significantly make the technology much more scalable. But the Ethereum Foundation repeatedly came out and said no, the purpose of the merger is basically to remove proof- the on-work component of the chain.”

For Kong, the misconceptions surrounding the merger had more to do with the community’s excitement and less with any failure by the Ethereum Foundation to manage expectations.

The merger was “not about increasing scalability, not about dramatically reducing gas fees,” Kong said, despite what Ethereum flag fans might have hoped. Any disappointment people have afterwards”wasn’t really the fault of anyone, in particular, or the Ethereum Foundation, which was just telling people the truth,” he added.

And how Fantom can compete with Ethereum and other chains? “We still have our competitive advantage, at least for now, in terms of our ability to process transactions asynchronously,” Kong said.

What worries him most going 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 scares a lot of people [in the industry].”

Kong pointed to the recent actions of the SEC, which claimed that all Ethereum Transactions falls under US jurisdiction, and the CFTC, as a defendant Ok DAO and the founders last week.

“To me, the regulatory uncertainty about who’s going to regulate what, like the SEC and the CFTC publicly debating with each other, is really what can stifle innovation, and really make people think twice about blockchain technology and not want to enter in some trouble,” he said. “And so it has a bit of a chilling effect on the industry.”