Sonic: The Ultimate DeFi Comeback Story

Abstract

Sonic is a next-generation Layer-1 blockchain, rebranding from Fantom to address scalability, efficiency, and developer incentives. With high-speed finality, low fees, and EVM compatibility, it is gaining notable traction within DeFi, attracting major protocols like Aave V3 and Pendle.

By introducing gas fee monetization and an ecosystem designed to reward developers and liquidity providers, Sonic differentiates itself from traditional Layer-1s. However, sustaining long-term adoption beyond its incentive phase remains a key challenge. This report explores Sonic’s evolution, competitive positioning, and future outlook in the blockchain landscape.

---

Key Takeaways (TL;DR)

• From Fantom to Sonic – Sonic marks a notable transformation in the crypto space, reviving Fantom with a new vision, superior technology, and a stronger ecosystem.
• The Fastest Blockchain Yet – With 369,825 TPS, enhanced scalability, and low fees, Sonic sets a new standard for blockchain infrastructure.
• Surging Momentum – Since December 2024, TVL, transaction volume, and fee revenue surged, making Sonic one of the fastest-growing networks in 2025.
• Incentive-Driven Adoption – Airdrop programs and fee monetization models have fueled rapid user and developer adoption, strengthening network activity.
• Competitive Edge & Future Potential – With a rapidly expanding ecosystem and strong market positioning, Sonic is well-positioned to establish itself as a key player in the Layer-1 landscape.

---

1. Introduction

1.1 The Rise, Fall, and Rebirth of Fantom

Fantom emerged as one of the leading Layer-1 blockchain networks during the DeFi Summer of 2021. It was known for its high-speed transactions, low fees, and strong developer ecosystem. At its peak, Fantom reached over $8 billion in Total Value Locked (TVL), with a thriving DeFi ecosystem that attracted developers and liquidity providers alike. The chain was fueled by innovations such as its Asynchronous Byzantine Fault Tolerance (aBFT) consensus and a robust suite of DeFi applications.

Figure 1: Fantom TVL and $FTM Price Performance

However, as the crypto market faced a downturn, Fantom struggled to maintain its momentum. A combination of factors, including liquidity migration, decreased developer activity, and the Multichain bridge exploit, contributed to a significant decline in TVL and ecosystem activity. By late 2023, Fantom’s TVL had fallen drastically, and many questioned whether the chain could recover.

1.2 The Return of Andre Cronje & The Birth of Sonic

Back in 2022, Andre Cronje, one of the most influential figures in DeFi and a key architect behind Fantom, suddenly announced that he was leaving the crypto space. This sent shockwaves through the community, leading to speculation and uncertainty about Fantom’s future. However, as time went on, it became clear that while Cronje had stepped away from the public eye, he never really abandoned the project. He continued working behind the scenes, refining his vision for what a next-generation blockchain should look like.

Recognizing the challenges Fantom faced—outdated infrastructure, high competition, and an eroded developer base—Cronje and his team decided that a simple upgrade was insufficient. Instead, they initiated a full-scale rebranding, leading to the birth of Sonic in December 2024.

“Planning some really big stuff still to come. Time to reclaim the DeFi throne!” – Andre Cronje

Sonic is not just a rebranded Fantom; it is a complete overhaul designed to address the previous limitations of its predecessor while setting new benchmarks for speed, scalability, and developer incentives. With its real-time finality, enhanced security, and fee-sharing model, Sonic aims to reclaim its position as a dominant DeFi-focused blockchain.

1.3 What is Sonic?

Sonic is an EVM-compatible Layer-1 blockchain built as an evolution of Fantom, aiming to enhance speed, security, and efficiency. Unlike traditional Layer-1s that face trade-offs between scalability, decentralization, and security, Sonic introduces optimizations that improve network performance without compromising core blockchain principles.

Key Features of Sonic:

• High Throughput & Real-Time Finality → Sonic can handle up to 369,825 Transactions Per Second (TPS) with real-time, one-block finality, making it one of the fastest blockchains.
• Fee Monetization Model → up to 90% of gas fees are redistributed to developers, creating a sustainable incentive structure for building dApps.
• Advanced Tech Stack → Utilizing the Fantom Virtual Machine (FVM), Carmen Database, and aBFT consensus, Sonic enables superior efficiency and security.
• Seamless Ethereum Integration → Through Sonic Gateway, assets can be bridged between Ethereum and Sonic in just 10 minutes.
• No Massive VC Unlocks → Sonic launched with no major VC-backed token supply pressure, ensuring a fair and stable tokenomics model.

Sonic is designed with a clear mission: to be the best Layer-1 blockchain for DeFi, trading, and high-frequency applications while remaining accessible, scalable, and developer-centric.

1.4 The Team Behind Sonic

Sonic is spearheaded by a team of experienced blockchain developers and industry veterans, led by:

• Michael Kong – CEO blockchain strategist and former Fantom Foundation CEO, instrumental in scaling blockchain infrastructure and adoption).
• Andre Cronje – CTO (renowned DeFi pioneer and architect of Yearn Finance, bringing extensive expertise in protocol development and financial engineering).
• David Richardson – Executive Chairman (seasoned executive with experience in scaling technology-driven enterprises).

The team has received strategic backing from leading DeFi figures and venture capital firms, including AAVE, Curve, Balancer, Signum Capital, and UOB Ventures. With this strong leadership and backing, Sonic is well-equipped to establish a meaningful presence in the DeFi ecosystem.

2. The Core Technology Behind Sonic

While Fantom introduced a fast and low-cost chain, it faced limitations in scalability, interoperability, and developer incentives. Sonic addresses these pain points with a new technical architecture that prioritizes speed, efficiency, and decentralization.

2.1 The Architecture of Sonic

Sonic’s technical architecture aims to improve performance and developer experience. The core components include:

• Sonic Virtual Machine (SVM): Optimized Execution for Speed

Sonic replaces the traditional EVM with Sonic Virtual Machine (SVM), an optimized execution engine that translates EVM bytecode into a more efficient format using hyper-instructions. This optimizes transaction processing speeds while maintaining full EVM compatibility, allowing Ethereum developers to migrate their dApps seamlessly.

• aBFT Consensus: Enhanced Security and Finality

Sonic utilizes an Asynchronous Byzantine Fault Tolerance (aBFT) consensus, an improved version of Lachesis. This enables instant finality, eliminating block reorganizations (reorgs) and making transactions irreversible within sub-second finality. Unlike traditional PoS systems, aBFT ensures that nodes reach consensus without relying on fixed validators, increasing decentralization.

• Carmen Database Storage: Efficient Data Management

One of the key challenges in blockchain networks is blockchain bloat, which refers to the excessive accumulation of data that increases storage requirements and slows down network performance over time. To address this, Sonic employs Carmen Database Storage, a novel mechanism that optimizes data retrieval and reduces storage requirements. This enhances network efficiency, reducing hardware demands for validators while improving scalability without compromising decentralization.

2.2 Gas Fee Monetization: Aligning Developer Incentives

Sonic’s Gas Fee Monetization (GasM) program introduces a unique approach to fee distribution. On most blockchains, validators receive the majority of gas fees. In contrast, Sonic allocates up to 90% of transaction fees directly to dApp developers. This model rewards developers for driving network activity while still ensuring low fees for users.

This setup shifts value from validators to developers, making it easier for projects to sustain themselves without relying on inflationary token rewards. The goal is to keep the ecosystem thriving with innovation while ensuring developers get paid for the adoption and usage of their apps.

GasM vs. Non-GasM dApps

Sonic’s gas fee system splits dApps into two groups: GasM dApps and Non-GasM dApps. Here’s the difference:

• GasM dApps are applications that opt into the GasM program. They receive 90% of the gas fees their users generate, allowing developers to reinvest in their projects, improve features, or expand adoption.
• Non-GasM dApps do not participate in the GasM system. Instead, 50% of their gas fees are burned, 45% goes to validators, and 5% is allocated to the ecosystem vault.

This two-tier system gives developers flexibility. They can choose to earn from gas fees or let their dApps operate with a standard fee structure.

Figure 2: Sonic – The Gas Monetization (GasM)

2.3 Sonic Gateway: Seamless Cross-Chain Connectivity

Interoperability is a key aspect of Sonic’s growth strategy. The Sonic Gateway is a cross-chain bridge that enables seamless transfers between Ethereum and Sonic, designed with a 14-day fail-safe mechanism to enhance security. This ensures that assets moved onto Sonic retain their integrity, addressing concerns about unreliable bridging solutions seen in past DeFi exploits.

Key features of Sonic Gateway:

• Secure Ethereum ↔ Sonic bridging within 10 min Ethereum to Sonic, 1 hour Sonic to Ethereum.
• Fast-lane transactions to reduce wait times for high-priority transfers.
• Fail-safe mechanism to mitigate bridge-related risks.

Figure 3: Sonic Time to Finality

2.4 High-Throughput Scalability: From TPS to Streaming Transactions

Sonic moves beyond the traditional metric of TPS (Transactions Per Second) and introduces the concept of streaming throughput. Unlike conventional blockchains that batch transactions into blocks, Sonic’s architecture enables continuous transaction processing, reaching theoretical speeds of 369,825 TPS under optimal conditions.

This “streaming” approach allows Sonic to handle real-time DeFi applications, high-frequency trading (HFT), and scalable Web3 gaming without network congestion.

2.5 Smart Contract Infrastructure: Solidity-Compatible with Advanced Features

Sonic is fully compatible with Solidity, making it easy for Ethereum developers to bring their projects over. It also comes with a few key enhancements:

• Live Pruning Database: Optimizes storage by separating current state from historical data, reducing space, and improving efficiency.
• Optimized Gas Model: Developers can create dynamic fee structures within their applications.
• Zero-Day Withdrawal Delays: Unlike Layer 2 solutions, Sonic enables instant finality without withdrawal delays.

3.  The Expanding Sonic Ecosystem

Sonic has been expanding its ecosystem, attracting an increasing number of DeFi protocols, infrastructure projects, and incentive programs. Sonic is positioning itself as a major hub for decentralized finance.

3.1 Sonic’s Ecosystem: A Rapidly Growing Network

Since its rebrand, Sonic has experienced significant ecosystem expansion, marked by an influx of new projects and liquidity from other chains.  This expansion is fueled by a combination of Sonic’s technological advantages and well-structured incentives aimed at attracting both developers and users.

One of the most striking aspects of Sonic’s ecosystem growth is the level of engagement from both existing and new DeFi projects. The integration of major protocols like Pendle and Aave v3 reflects increasing confidence in Sonic’s infrastructure, attracting both liquidity and established DeFi protocols to the network. This trend highlights Sonic’s growing role as an alternative for developers and liquidity providers seeking faster transactions and lower fees.

Figure 4: Sonic Ecosystem Map

3.2 Key Protocols Driving Sonic’s Growth

Sonic’s DeFi ecosystem consists of a mix of established and emerging protocols that contribute to its liquidity and utility. While numerous projects are currently building on Sonic, a few key protocols stand out as foundational pillars of the network:

• Shadow Exchange: The leading decentralized exchange (DEX) on Sonic, designed to facilitate deep liquidity and introduce innovative token incentive mechanisms. Shadow Exchange serves as a primary trading hub, enabling seamless asset swaps and yield-generating opportunities for liquidity providers.
• Beets: A DeFi platform offering advanced yield optimization strategies and portfolio management tools for users seeking passive income.
• Silo Finance: A permissionless lending protocol that has seen significant adoption, enabling users to borrow and lend assets with optimized capital efficiency.
• Rings Protocol: A cross-chain synthetic asset protocol, allowing users to gain exposure to various assets while maintaining deep liquidity within Sonic’s ecosystem.
• SwapX: Another prominent DEX on Sonic, offering innovative trading mechanisms and liquidity pools to complement the network’s growing DeFi landscape.

Figure 5: Top 10 Protocols on Sonic Chain

3.3 Sonic’s Incentive Program: Fueling Adoption

To accelerate ecosystem growth, Sonic has introduced a structured incentive program designed to reward both users and developers. The program includes:

• Sonic Points and Gems: Users earn Sonic Points by interacting with DeFi applications, staking tokens, and providing liquidity, while developers earn Sonic Gems based on user activity on their platforms. These points and gems can be converted into $S tokens, aligning long-term incentives with ecosystem growth.
• Fee Monetization: Sonic’s unique gas fee monetization model redistributes up to 90% of gas fees back to developers. This creates a sustainable incentive structure that prioritizes real application usage over speculative farming.
• Innovator Fund: Sonic has allocated 200 million $S tokens from its total supply to fund infrastructure development, dApp innovation, and strategic partnerships. This initiative provides direct support to teams looking to build on Sonic and helps accelerate adoption.

These incentive mechanisms create a strong foundation for Sonic’s ecosystem to flourish while ensuring long-term engagement from both developers and users.

3.4 How to Get Started in the Sonic Ecosystem

For those looking to explore the Sonic ecosystem, here are a few steps to get started:

1. Get a Sonic-compatible wallet: Popular options include Backpack Wallet and Rabby Wallet, which provide seamless access to Sonic’s DeFi applications.
2. Bridge assets to Sonic: Users can transfer assets from Ethereum or other blockchains using the Sonic Gateway, ensuring a smooth onboarding process.
3. Explore key DeFi applications: Engage with Sonic-native protocols such as Shadow Exchange for trading, Silo Finance for lending, and Beets for yield optimization.
4. Participate in incentive programs: Users can earn Sonic Points by staking, lending, or providing liquidity on supported applications.

4.  Understanding Sonic’s Tokenomics

The transition from Fantom to Sonic came with a fundamental shift in tokenomics. Sonic introduced adjustments in token distribution, inflation management, and staking incentives to ensure long-term sustainability and ecosystem growth.

4.1 Token Distribution & Supply

At launch, Sonic introduced a total supply of 3.175 billion $S tokens. The initial circulating supply was approximately 2.88 billion tokens, with the remaining tokens allocated for future initiatives and ecosystem development.

Figure 6: $S Token Allocation

Sonic’s token distribution is structured to ensure a balanced allocation between initial circulating supply, block rewards, ongoing funding, and ecosystem incentives. 

• Initial Circulating Supply (69.9%): A total of 2.88 billion $S tokens were allocated as the initial circulating supply, forming the majority of the token distribution. This supply includes allocations for early participants and ensures sufficient liquidity for the network’s launch phase.
• Block Rewards (18.6%): A combined 765.41 million $S tokens are reserved for validator rewards and network security incentives.
• Ongoing Funding (6.9%): 285.75 million $S tokens are allocated to support protocol development, ecosystem expansion, marketing, and operational costs. Any unused portion of this allocation may be burned to manage supply inflation.
• Airdrop Program (4.6%): 190.50 million $S tokens are designated for airdrops, aimed at rewarding early adopters and fostering user engagement across both Fantom Opera and Sonic users. This mechanism also incorporates a burn model to control inflation and encourage active participation.

4.2 Inflation Schedule & Emission Model

Sonic’s approach to inflation is structured to ensure sustainability:

• Initial Phase (First Four Years): Sonic does not introduce additional inflation during this period. Instead, validator rewards are sourced from the pre-allocated 295 million $S tokens (7.2%), ensuring a 3.5% APR for validators without increasing the circulating supply.
• Subsequent Phase (After Four Years): To sustain validator incentives, Sonic will begin minting additional tokens at a controlled rate of 1.75% per year after the initial four-year period. This emission will be sourced from the 470.41 million $S tokens allocated for block rewards beyond the first four years.
• Ongoing Funding (6.9% Allocation): An additional 6.9% of the total supply (285.75 million $S tokens) is set aside for ecosystem funding over multiple years. These tokens may be burned if not fully utilized to counteract inflationary pressures.
• Burn Mechanisms: Sonic employs multiple burn strategies to balance long-term supply expansion, reducing overall token supply through transaction fee burns and unused fund burns.

Figure 7: $S Token Inflation Schedule

4.3 Staking Dynamics and Incentives

Sonic utilizes a Proof-of-Stake (PoS) consensus mechanism, ensuring network security while offering a sustainable staking model for participants. Unlike traditional mining-based systems, PoS relies on validators who stake $S tokens to validate transactions and secure the blockchain. This model reduces energy consumption while maintaining decentralization and efficiency.

How Staking Works on Sonic

According to Sonic, users can stake their $S tokens with validators, contributing to network security while earning staking rewards. Sonic’s staking mechanism incorporates the following:

• Dynamic APY – Staking rewards adjust based on total staked supply and network activity, preventing excessive dilution.
• Block Reward Distribution – A portion of newly emitted tokens is allocated to stakers, following a declining emissions model to mitigate long-term inflation.
• Long-Term Staking Incentives – Users who stake for extended periods receive higher rewards, encouraging retention and reducing sell pressure.
• Flexible Unstaking – While unstaking is available, longer lock-up periods often result in higher yields, rewarding dedicated network participants.

5.  Competitive Analysis: How Sonic Stands Out

To understand Sonic’s position in the market, it is essential to compare its performance metrics with other leading blockchains. Below is a comparative analysis based on transaction speed, finality time, transaction cost, and consensus mechanism.

Figure 8: Comparative Analysis: Sonic Chain vs Leading Layer 1 Blockchains

This comparison underscores Sonic’s efficiency in transaction speed and cost-effectiveness while maintaining Ethereum Virtual Machine (EVM) compatibility. The ability to process transactions at a fraction of the cost of Ethereum and with significantly lower finality times gives Sonic a strategic advantage, particularly for DeFi and gaming applications that require instant settlements. While Solana provides comparable speeds, Sonic’s alignment with the Ethereum ecosystem ensures ease of migration for developers, reducing adoption friction and broadening its potential user base.

However, beyond just raw performance metrics, Sonic differentiates itself through a combination of scalability, cost efficiency, and ecosystem incentives, which position it as a competitive alternative to other Layer-1 blockchains. Several key factors contribute to Sonic’s appeal:

• Superior Transaction Speed & Finality: Sonic’s sub-second finality significantly reduces transaction waiting times, making it an attractive choice for applications requiring high-speed interactions, such as decentralized exchanges and gaming platforms.
• Cost Efficiency: Sonic’s transaction fees are among the lowest in the market, at <$0.0001 per transaction. This makes it a strong alternative to chains like Ethereum, where gas fees can fluctuate significantly.
• Ethereum Compatibility: Unlike Solana, which use unique environments, Sonic maintains full EVM compatibility, ensuring that Ethereum developers can migrate applications with minimal changes.
• Developer & User Incentives: Sonic’s fee monetization program redistributes up to 90% of gas fees to developers, creating a robust incentive structure for long-term growth. This is a major differentiator compared to other blockchains that rely on short-term grant programs.
• Scalability Without Layer 2 Dependencies: While Ethereum and some other L1s require rollups and additional solutions for scaling, Sonic achieves high throughput natively, avoiding liquidity fragmentation across multiple layers.
• Robust Security Model: The improved Lachesis consensus enhances network security and reliability, ensuring that transactions are confirmed without reorgs, unlike some competitor chains that occasionally experience instability.
• Dynamic Throughput Scaling: Sonic’s high theoretical TPS allows it to scale efficiently as demand grows, ensuring that the network remains efficient even during peak congestion periods.

5.2 The Fastest Blockchain in the World

Sonic currently holds the highest theoretical transactions per second (TPS) among Layer 1 blockchains, surpassing competitors such as ICP, Aptos, and Solana. The chart below illustrates Sonic’s dominance in terms of raw transaction speed.

Figure 9: Ranking Blockchains by Maximum Theoretical TPS

5.3 Challenges and Competitive Threats

Beyond competing with established chains like Ethereum and Solana, Sonic also faces rising competition from new high-performance Layer 1 networks such as Monad, Berachain, and Sei v2. Potential challenges include: 

• Sustaining Liquidity and User Adoption: Attracting liquidity providers and ensuring capital retention remains a constant challenge. Many DeFi ecosystems rely on incentives to sustain liquidity, and Sonic must find a way to ensure long-term stickiness beyond initial rewards.
• Competing Incentive Structures: Other chains, particularly new L1s like Berachain and Monad, are offering aggressive incentives to attract developers and users. Sonic must continuously refine its fee-sharing model and gas monetization incentives to stay competitive.
• Emerging High-Performance Blockchains: New L1s such as Berachain, Sei v2, and Monad are launching with innovative parallel execution models and deep VC funding. These networks could challenge Sonic’s positioning if they provide similar or superior efficiency with stronger ecosystem backing.
• Market Cycles and Capital Rotation: Blockchain narratives shift rapidly, and chains that are trending today may struggle with user retention in the long term. Sonic must continue delivering strong technical execution and ecosystem growth to remain relevant in an increasingly crowded market.
• Security and Stability Risks: High-speed blockchains often face challenges related to network security and validator decentralization. While Sonic’s improved Lachesis consensus enhances reliability, it must prove its resilience under real-world stress conditions.

6.  Future Outlook and Closing Thoughts

Sonic has gained significant attention in the Layer-1 blockchain space, particularly for its approach to transaction efficiency and developer incentives. By focusing on scalability, low fees, and economic sustainability, Sonic has positioned itself as an alternative to more established networks. Its growing adoption within DeFi and continued efforts to onboard major protocols highlight its potential impact on the broader blockchain ecosystem.

6.1 The Future of Sonic: What Comes Next?

Looking ahead, Sonic has the potential to become one of the top Layer-1 blockchains if it continues to execute its expansion strategy effectively. Several factors will determine its trajectory:

• Sustained DeFi Expansion: The onboarding of major DeFi protocols must continue to establish Sonic as a core player in the on-chain financial ecosystem. 
• Institutional Adoption & Cross-Chain Growth: Bridging more liquidity from Ethereum and other ecosystems will be key to maintaining competitiveness.
• Scalability Enhancements & Network Optimization: While Sonic’s performance has demonstrated significant efficiency, ongoing improvements will be necessary to sustain low fees and ensure sub-second finality at scale.
• Market Positioning Amidst Emerging Competitors: As new blockchains emerge, Sonic must continue evolving its incentive structures, infrastructure, and governance model to remain relevant.

6.2 Final Thoughts

Sonic represents a major evolution from Fantom, not just in branding but in its fundamental approach to scalability, incentives, and ecosystem growth. However, long-term success will depend on maintaining developer interest, sustaining liquidity, and expanding beyond its current DeFi focus to support more diverse applications.

While challenges remain, Sonic is at a crucial turning point. If it can continue expanding its DeFi ecosystem, optimize its scalability solutions, and maintain its competitive edge in developer incentives, it could strengthen its position as a notable player in the Layer-1 landscape.