Fantom, a Layer-1 blockchain, is aiming to promote the concept of “safer memecoins” by dedicating $6.5 million worth of its native FTM token to reward developers. The platform is seeking to tap into the nearly $50 billion memecoin sector while implementing measures to prevent scams and fraudulent projects.
Michael Kong, the CEO of Fantom Foundation, expressed his vision of creating an environment where “safer memecoins” can be launched. He emphasized the importance of both technical and non-technical measures to ensure that projects are not simply scams or rugs.
The recent memecoin trading frenzy has primarily been dominated by Solana and Coinbase’s Ethereum layer-2 Base, with Solana even surpassing Ethereum in terms of trading volumes during the peak of the rush in March. However, investigations conducted by Cointelegraph’s Magazine have revealed that as many as one in six memecoins on Base were scams, and numerous meme-based projects on Solana, which collectively raised $26.7 million, were quickly abandoned by their creators.
To attract memecoin traders to the Fantom platform, Kong announced during the MemeGlobal event in Sydney on April 30 that the Fantom Foundation would establish a 10-million-Fantom prize pool, equivalent to $6.5 million, for memecoin teams.
Kong explained that the popularity of memecoins presents an opportunity for Fantom to acquire a large number of customers, as it has proven successful on other blockchain networks. The primary goal for Fantom is to expand its user base, and memecoins are seen as a means to achieve this objective.
According to Kong, a successful memecoin launch involves the distribution of tokens to the community in a democratic manner, without heavy concentration among a few individuals or entities.
In April, Andre Cronje, the co-founder of Fantom Foundation, proposed a set of measures to ensure the safety of memecoins. These measures include having memecoin developers issue their tokens with the Fantom Foundation as a co-controller of the token’s startup liquidity.
Cronje also suggested a token supply split, with 5% allocated to the team and 10% reserved for marketing, locked in a multisig wallet requiring at least one foundation member as a co-signer. The remaining 85% would be placed in an FTM-paired liquidity pool (LP), with the foundation contributing 100,000 FTM, equivalent to around $65,000 at current prices.
Cronje further explained that if the FTM in the LP token reaches a minimum of 2,000,000 FTM, the initial 100,000 FTM (5%) provided by the foundation would be removed to cover the initial cost, and the rest of the LP would be burned.
Fantom currently ranks as the 38th largest blockchain network with a total value locked (TVL) of $108.3 million, according to DefiLlama. In comparison, Solana and Base hold the fourth and sixth positions, respectively, in terms of TVL.
Cointelegraph’s Magazine investigation revealed that out of the new meme coins on Base, one in six were scams, and 91% of them had vulnerabilities.