Fantom Price Loses Over 7% After new Governance Proposal

The value of the Fantom (FTM) token has dropped by over 7% in the past 24 hours to around $1.91. This comes amidst the announcement of a new governance proposal for the platform. 

Fantom Makes new Governance Proposal

The next-gen layer-1 smart contract network seeks to reduce the number of self-staked token amounts needed to run a validator node.

The Fantom community put up a new governance proposal to lower the self-staked amount required to run a validator node.

These are the proposed options:
– 50k FTM
– 100k FTM
– 250k FTM

Head over to https://t.co/CiAIeaJy05 to vote! pic.twitter.com/ioRepXVJ8b

— Fantom Foundation (@FantomFDN) February 2, 2022

There are three proposed options in place, which are 50k FTM, 100k FTM, and 250k FTM. So far, most people have voted for 100k FTM, but the percentage of the vote is still far below what it’ll take to reach a quorum. 

Most networks require only half or even less than half of token holders to have a quorum. But Fantom requires 90% of token holders to vote. So far, only 13.27% have voted.

Fantom describes itself as an open-source, high-performance, scalable smart contract platform. It overcomes the limitations of older blockchains while remaining permissionless and open source. It’s also faster and more cost-efficient than older networks because of its aBFT consensus mechanism Lachesis.

The platform is compatible with Ethereum but solves the problem of scalability that users face when using the network of the second-largest crypto asset by market cap.

Unlike Ethereum, where every decentralized application is built on the network, Fantom gives applications its blockchain network. 

The proof of stake network has grown significantly since its mainnet launch in 2019.

With this new proposal, the network seeks to become more decentralized by giving more people the opportunity to become validators.

FTM Quorum Demands “Unrealistic”

Presently, the minimum amount to become a validator on the network is 1 million FTM. That’s almost $2 million going by the current value of the token. Therefore, a reduction will see more nodes and greater decentralization. 

However, whether or not this will happen depends on whether a quorum is reached. Given the 90% requirements for a quorum, the chances are pretty slim. 

According to some of the token holders on Twitter, a 90% quorum is unrealistic. One, in particular, pointed out that they had a similar proposal some weeks ago, which failed because the quorum couldn’t be reached.

As for the FTM token, it’s unlikely that the governance proposal affected its price action. The price performance has been negative for the past 30 days, with over a 32% decrease. The drop in the last 24 hours only continues the trend.