From the once-prominent Layer 1 blockchain Fantom to its current iteration as Sonic Labs, 2024 has been a year of sweeping changes: a foundation rebranding, mainnet upgrades, and token swaps. Fantom aims to achieve a “second startup” through these initiatives. However, with its TVL dropping below $100 million, ongoing controversies around token issuance, and lingering concerns over cross-chain security, Sonic still faces many doubts and challenges. Can the new chain’s high performance deliver on its promises? Can token swaps and airdrops revive the ecosystem?

Telling a Performance Story: Returning to the Market with a Sub-Second Blockchain

On December 18, 2024, the Fantom Foundation officially rebranded as Sonic Labs and announced the launch of the Sonic mainnet. Known as a new blockchain featuring sub-second transaction speeds, performance has naturally become the centerpiece of Fantom’s technical narrative. By December 21, just three days after its launch, official data revealed that the Sonic chain had already produced 1 million blocks. \
So, what’s the secret behind this speed? According to the official introduction, Sonic has deeply optimized both the consensus and storage layers, implementing technologies such as live pruning, accelerated node synchronization, and database slimming. These improvements enable nodes to confirm and record transactions with significantly less overhead. Compared to the previous Opera chain, node synchronization speed has increased tenfold, while the costs of large-scale RPC nodes have been reduced by 96%, laying the groundwork for a truly high-performance network. \
It’s worth noting that while “high TPS” is no longer novel in blockchain competition, it remains a core metric for attracting users and projects. Fast, seamless interaction experiences can lower the entry barriers for users while enabling application scenarios such as complex smart contracts, high-frequency trading, and metaverse gaming.

Beyond “high performance,” Sonic fully supports EVM and is compatible with mainstream smart contract languages such as Solidity and Vyper. On the surface, the debate between “developing a proprietary virtual machine vs. supporting EVM” has often been a defining choice for new blockchains. Sonic opted for the latter, a decision that lowers the migration barrier for developers. Smart contracts previously written for Ethereum or other EVM chains can be deployed directly on Sonic with minimal modification, saving significant adaptation costs. \
In the fiercely competitive public blockchain market, abandoning EVM often means rebuilding a developer and user ecosystem from scratch. Clearly, Sonic aims to inherit the Ethereum ecosystem “seamlessly” while leveraging its strong performance to enable projects to launch rapidly. According to official Q&A sessions, the Sonic team considered other approaches but concluded that EVM remains the industry’s most widely adopted standard. This choice helps Sonic quickly accumulate applications and a user base during its early stages. \
Moreover, Fantom’s previous struggles with cross-chain issues during the Multichain incident have heightened attention on Sonic’s cross-chain strategy. In its technical documentation, Sonic highlights its cross-chain solution, the Sonic Gateway, as a core feature, with particular emphasis on its security mechanisms. Sonic Gateway employs a validator network that runs clients on both Sonic and Ethereum, incorporating a decentralized, tamper-proof “Fail-Safe” mechanism. The Fail-Safe design is unique: if the bridge shows no activity (“heartbeat”) for 14 days, original assets can automatically be unlocked on Ethereum, ensuring user funds remain secure. By default, cross-chain transactions are batched every 10 minutes (ETH → Sonic) or 1 hour (Sonic → ETH), with an option for instant transfers via paid triggers. Sonic’s validator network operates the gateway by running clients on both Sonic and Ethereum, ensuring the same level of decentralization as the Sonic chain itself and mitigating risks of centralized manipulation. \
From its design, Sonic’s updates focus on attracting a new wave of developers and capital with features like tens of thousands of TPS, sub-second finality, and EVM compatibility. These “technical upgrades” aim to reintroduce this veteran blockchain to the market with a fresh image and enhanced performance.

Tokenomics: Balancing Issuance and Burn

Currently, the most discussed topic in the community is Sonic’s new tokenomics. On one hand, the 1:1 exchange model with FTM appears to be a straightforward migration. On the other hand, the airdrop plan, which will issue an additional 6% of tokens (around 190 million) six months after launch, is seen by some as a dilution of token value. \
At launch, Sonic adopted the same initial supply (and total cap) of 3.175 billion tokens as FTM, ensuring existing holders could claim S tokens on a 1:1 basis. However, a closer look reveals that issuance is only one part of Sonic’s strategy, which also incorporates mechanisms for balancing the total supply. \
According to official documents, starting six months after the mainnet launch, Sonic will issue 1.5% of its total supply annually (approximately 47.625 million S) for purposes such as network operations, marketing, and DeFi promotion, for a duration of six years. Any unused portion of these tokens at the end of a given year will be 100% burned, ensuring that newly issued tokens are actively used for ecosystem growth rather than being hoarded by the foundation. \
During the first four years, Sonic’s annual validator rewards of 3.5% will primarily come from FTM block rewards that were unused on Opera. This approach avoids excessive early issuance of S tokens and mitigates inflationary pressure during the network’s initial phase. After four years, new token issuance will resume at a rate of 1.75% annually to fund block rewards.

To counteract the inflationary pressure from these token issuances, Sonic has implemented three burn mechanisms:

Fee Monetization Burn: If a DApp does not participate in FeeM, 50% of the gas fees generated by users in that application will be directly burned. This acts as a “deflationary tax” on non-participating DApps, encouraging them to join the FeeM program.

Airdrop Burn: Seventy-five percent of the airdrop allocation requires a 270-day vesting period for full access. If users choose to unlock early, they forfeit a portion of their airdrop, and these forfeited tokens are directly burned, reducing the circulating supply of S in the market.

Ongoing Funding Burn: The 1.5% annual issuance allocated for network development will be 100% burned if unused within the year. This prevents token hoarding by the foundation and limits the long-term accumulation of tokens by certain parties.

Overall, Sonic aims to balance “controlled issuance” to fund ecosystem growth with extensive burn mechanisms to curb inflation. The most noteworthy is the FeeM burn, as it directly ties to the participation and transaction volume of DApps. The more applications that opt out of FeeM, the greater the on-chain deflationary pressure. Conversely, if more DApps join FeeM, the “deflationary tax” decreases, but developers earn a larger share of fees, creating a dynamic balance between revenue sharing and deflation.

TVL at Just 1% of Its Peak: Can Incentives and Airdrops Revive DeFi Momentum?

The Fantom team once thrived during the bull market of 2021–2022, but its on-chain performance over the past year has been disappointing. Currently, Fantom’s TVL stands at approximately $90 million, ranking 49th among DeFi blockchains, a far cry from its peak TVL of around $7 billion. This figure represents only about 1% of its former glory.

Perhaps to revitalize its DeFi ecosystem, Sonic introduced the Fee Monetization (FeeM) mechanism, claiming it can return up to 90% of network gas fees to project developers. This allows them to gain sustainable revenue based on on-chain usage without overly relying on external funding. This model draws inspiration from Web2 platforms’ “revenue sharing by traffic” approach, aiming to attract and retain more DeFi, NFT, and GameFi developers on Sonic.

Additionally, the team has set up a 200 million S token airdrop pool with two participation modes: Sonic Points, encouraging regular users to actively interact, hold tokens on Sonic, or accumulate historical activity on Opera; and Sonic Gems, an incentive for developers to launch appealing DApps with genuine usage on Sonic. The airdrop tokens also incorporate mechanisms like “linear vesting + NFT locking + early unlock burning” to strike a balance between immediate rewards and long-term engagement.

The mainnet launch, the milestone of 1 million blocks, and the announcement of the cross-chain Bridge have indeed increased Sonic’s visibility in the short term. However, the reality is that the current ecosystem’s prosperity is far from its peak. Today’s market is highly competitive, with Layer 2s, Solana, Aptos, Sui, and other blockchains flourishing, marking an era of multichain diversity. High TPS is no longer the sole selling point. Without one or two “flagship projects” emerging within its ecosystem, Sonic may struggle to compete with other popular blockchains.

That said, Sonic’s launch has received support from some industry-leading projects. In December, the AAVE community proposed deploying Aave v3 on Sonic, and Uniswap announced its deployment on Sonic as well. Furthermore, Sonic inherits 333 staking protocols from Fantom as part of its ecosystem foundation, providing an advantage over entirely new blockchains.

Can performance and high incentives bring back funds and developers? The answer likely depends on whether Sonic can deliver convincing results in 2025 in areas such as application adoption, governance transparency, and cross-chain security. If all goes well, Sonic may regain the glory Fantom once enjoyed. However, if it remains limited to conceptual hype or fails to address internal conflicts and security concerns, this “second venture” may fade into obscurity amid the multichain competition.

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