Fantom Opera’s Gas Monetization Proposal — What Does It Mean?
Hello fellow Spirit enthusiasts, hopefully you’re all doing fantastic!
In this week’s episode of Soully Weekly, we will talk about the recently concluded proposal about the Gas Monetization on Fantom. In this article, We’ll answer questions such as “What does the proposal offer?”, and delve into Andre Cronje’s statement which claims that Fantom will become the “Youtube/Twitch of blockchain platforms”.
If you’re ready, let’s go!
Before we dive into the specifics of the program, it’s important to understand how the Fantom Opera ecosystem currently operates. Each transaction on the platform requires a gas fee paid in the native token $FTM. This fee is collected as revenue for the network, and until now, 20% of it was burned in order to reduce the supply of $FTM and decrease selling pressure. The burn rate was even higher at one point, standing at 30% before being lowered to 20% in August 2022, 5 months ago. The 10% reduction was sent to the Ecosystem Support Vault, which will eventually be used to reward projects built on Fantom.
Now, the recently passed Gas Monetization Program aims to further reduce the burn rate from 20% to 5% and use the remaining 15% to incentivize talented dApps and creators within the Fantom ecosystem. This program is similar in concept to the way in which content creators are rewarded on platforms like Youtube or Twitch, with the dApps and protocols on Fantom serving as the equivalent of these creators. The foundation believes that these dApps and protocols, which help shape and build the Fantom ecosystem, should be rewarded based on the activity they bring to the network.
By returning a portion of the gas fees to the protocols that generate them, the foundation hopes to encourage more protocols to increase their activity on the chain. This is a win for everyone on the chain, as a higher level of activity on Fantom can lead to greater success for the platform. In fact, this is similar to the “gas rebase” implemented by Canto Chain, which returns 25% of the gas fees to the protocols on their chain. While we were in the process of expanding to the Canto Chain, one of the appealing ideas to the DAO was being able to receive some revenue that we would bring to the chain in the gas fee rebases. This proposal that recently passed suggests something similar, which would reward the dApps based on the activity that they are creating.
However, in order to be eligible for the Gas Monetization Program, protocols must first meet certain requirements, such as completing 1,000,000 transactions and being active on the network for at least 3 months. Considering that we meet all the requirements and we are one of the first protocols on Fantom with heavy amounts of transactions each day, SpiritSwap would be taking its part under the program.
These requirements ensure that only high-quality dApps and protocols are rewarded, similar to the requirements check performed by platforms like Youtube. This helps to maintain the integrity and quality of the Fantom ecosystem, as only the most active and successful protocols will be eligible for the rewards.
While the reduction in the burn rate may result in a decrease in the burned amount of Fantom, therefore bringing more selling pressure, the Foundation believes that the potential benefits of the Gas Monetization Program far outweigh this potential drawback. By fairly and sustainably rewarding the dApps and protocols that contribute to the growth and success of the Fantom ecosystem, the foundation hopes to see the platform thrive and become the “Youtube/Twitch of blockchain platforms”, as stated by Andre Cronje.
The concept of rewarding protocols based on their activity and contribution to the network itself is not a new one, but it has the potential to drive innovation and growth within the blockchain industry. By creating a monetization program similar to those found on mainstream content creation platforms, the Fantom Foundation is seeking to foster a healthy and vibrant ecosystem that will attract top protocols and drive the adoption of Fantom’s highly advanced technology.
We would like to thank you for taking your time to read this week’s episode of Soully Weekly, and we look forward to bringing you more updates in the future. We have also talked about our plans for 2023 and put out a review for 2022, so make sure to read it if you have the time to do so.
Cheers everyone,
Spirit DAO
