In a strategic pivot to revitalize its ecosystem and address a significant token price drop, the Sonic network community has overwhelmingly approved an ambitious plan for expansion into the United States, coupled with a fundamental shift in its tokenomics. This move aims to forge deeper connections with traditional finance, enhance market access, and introduce a deflationary supply model to boost long-term value for token holders.
Forging a US Presence and Traditional Finance Ties
The core of Sonic's new strategy involves establishing a dedicated entity, Sonic USA LLC, to spearhead policy engagement, market access, and investor outreach within the US. This new subsidiary is authorized to issue 150 million tokens and manage a $100 million Private Investment in Public Equity (PIPE) tied to Nasdaq markets, channeling funds towards balance sheet growth and liquidity for S token purchases. Furthermore, $50 million has been allocated for an exchange-traded fund (ETF) linked to the S token, with plans to collaborate with a regulated ETF provider and secure institutional-grade custody from BitGo. A critical component of this strategy is the three-year lock-up for tokens allocated to these initiatives, designed to align incentives with long-term investment horizons.
Introducing a Deflationary Token Model
Alongside its US expansion, Sonic is implementing a revised fee distribution mechanism intended to curb inflationary pressures and foster a deflationary supply. Under the new framework, 90% of revenue from FeeM transactions will now go to builders, 5% to validators, and the remaining 5% will be permanently burned from circulation. For non-FeeM activities, half of the revenue will be distributed to validators, while the other half will also be burned. By combining revenue redistribution with significantly higher token burn rates, Sonic aims to create a sustainable, deflationary model that rewards active participants and preserves the digital asset's value, hoping to reverse the over 60% decline experienced by its token in the past year.
