DeFi is making a comeback. One of the main players is a new chain, Sonic. Or is it? Well, Sonic rebranded from Fantom. So, you may know it, but under its old name of Fantom. Sonic relaunched earlier this year, 7th January. Ever since, it has constantly been in the DeFi spotlight. Andre Cronje is also back onboard. So, in other words, it’s redefining DeFi.
It has its own layer 1 chain, which is EVM compatible. Sonic is fast, scalable, and incentivized. The latter for both users and developers. So, let’s take a closer look at what Sonic is all about.
What Is Sonic ($S)
Sonic ($S) is a big player in DeFi. It has its roots in DeFi as well. You may know it as Fantom. However, to keep up with the ever-changing DeFi and crypto landscape, a rebranding was necessary. Andre Cronje, plays a big part in all this. He founded, among others, Yearn Finance. But he was also chair and technical advisor for Fantom. He played an important role in establishing Fantom.
Now he is doing the same for Sonic. He’s now the CTO (Chief Technology Officer). So, what did he and the team come up with? Well, their chain started from scratch, without history. There’s no Fantom on it whatsoever. But you need developers to get apps on your chain. So, they came up with a great idea. 90% of all generated transaction fees go back to the developers.
For this, it uses its Fee Monetization (FeeM) program. This allows developers to earn 90% of transaction fees from their apps. As a result, it takes away financial pressure. There’s less or no need for fundraising or other financial stimulus. Instead, they can focus on growing their projects and user base.
Another 200 million $S tokens are set aside for the Innovator Fund. This is to attract new devs, apps, and ventures to the chain. This comes from the Sonic Foundation treasury.
Last week, we announced our game-changing Sonic Labs Innovator Fund, with up to 200,000,000 $FTM
The fund complements our 100M+ $S airdrop and will attract an influx of innovative dApps to #Sonic.
So, I told you already that the new chain and its $S token went live on 7th January this year. However, the team announced this as early as 1st August 2024. It needed a complete makeover because an upgrade just wouldn’t cut it. There were too many technical upgrades involved.
This involved, among others,
A high throughput with 10,000 TPS and sub second finality.
Optimization of nodes in speed and cost reduction.
Advanced database storage management.
A new token and tokenomics.
$S Tokenomics
Sonic’s native token is $S. This replaced Fantom’s $FTM token. Now, if you hold $FTM on a CEX, there’s nothing that you need to do. The exchanges swapped your $FTM to $S at a 1:1 ratio. However, if you hold your $FTM in a noncustodial wallet, you need to use Sonic’s upgrade feature. Here you can swap your $FTM to $S, again, at a 1:1 ratio.
Upgrade your FTM to S using the portal below and start exploring the Sonic ecosystem.
Pay for transaction fees. This makes sure that there will always be demand for $S.
Staking. Secure the network and earn rewards in $S.
Governance. By staking your $S you can take part in its governance. You have a say in shaping Sonic’s future.
There’s a 3.175 billion total supply, all in circulation. This is the same as the $FTM token’s supply. However, there’s no max supply. In general, at Altcoin Buzz, we’re not big fans of such tokenomics. So, after six months, for the next six years, Sonic will mint 1.5% tokens per year. That equals 47,625 million tokens per year.
These new tokens will finance strategic ecosystem growth initiatives. For example,
Incentive airdrops.
Ecosystem expansion efforts.
Validator rewards.
Burn Mechanisms
Burn Mechanisms
Burn Mechanisms
However, to offset this inflation, there are also various burn mechanisms in place. So, in all fairness, that makes the tokenomics slightly better again. For instance,
Airdrops — For airdrops, there are 200 million $S tokens available. Users receive straight away 25%. The other 75% are locked as NFTs for nine months. The earlier you claim your airdrop, the more will be burned. You cash out in the first month, 88% to 100% is burned. You wait nine months, and it’s all yours.
Network funding — All tokens of the 47,625 million tokens not used in that year, the platform will burn.
Fee Monetization Burn — I already explained how devs can earn up to 90% of transaction fees on their apps. However, if an app doesn’t take part in FeeM, 50% of transaction fees from this app are burned.
The current $S price is 50 cents with a $1.5 billion market cap.
What Else Is Cooking at Sonic?
Sonic keeps delivering. One way is by continued airdrops. You can earn points and gems.
Points — These are part of the 200 million token airdrop. To clarify, there are three ways of earning points,
So, to wrap this up, Sonic made improvements and innovations compared to Fantom. It survived the first couple of months well. The rebranding seems to have worked out fine for them. They have a unique feature on how to attract and incentivize developers. The same goes for us, the users.
So, what do you think of Sonic? Let me know in the comments, and do take part in our discussions in Discord and X.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.
We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear 
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