Sonic Labs, the innovative team behind the layer-1 Sonic blockchain, has received approval to issue $200 million worth of its S tokens. This strategic move aims to facilitate Sonic’s expansion into the US capital markets, including the development of a proposed exchange-traded product and a Nasdaq-listed investment vehicle.
Voting concluded on Sunday with overwhelming support, as 99.99% of Sonic (S) tokens from 105 wallets voted in favor of the proposal. Impressively, the proposal met the required quorum, with 700 million S tokens participating in the decision-making process.
Sonic’s Strategic Allocation for Market Expansion
The company has outlined plans to allocate $100 million in S tokens to establish a strategic reserve for a Nasdaq PIPE (Private Investment in Public Equity) vehicle. Furthermore, $50 million will be allocated to an S token-tracking ETP to be issued by a “regulated, top-tier ETF provider” boasting over $10 billion in assets. Sonic has announced that BitGo will act as the custodian for this fund.
Additionally, Sonic will establish Sonic USA LLC, appoint a US-based CEO, and build a team located in New York to spearhead its TradFi initiatives and foster engagement in Washington, DC. To support these efforts, 150 million S tokens, valued at $47.7 million, will be used to bootstrap Sonic USA.
Source: Sonic Labs
This strategic maneuver by Sonic marks a novel approach in leveraging traditional financial instruments to enhance its competitiveness within the crypto space. While many publicly listed companies have turned to crypto solutions to bolster their balance sheets, Sonic’s plan flips the script by integrating traditional finance with crypto advancements.
Sonic’s Approach to “2025 Tokenomics”
The Sonic chain, which launched in December 2024 following a rebranding from the Fantom Opera network, conducted a 1:1 token swap from Fantom’s FTM tokens to Sonic’s S tokens as part of the migration process. However, the Fantom Foundation had retained less than 3% of the original FTM token supply, as it preferred to repurchase its own tokens rather than sell them for partnerships.
Sonic has identified this inherited tokenomics structure as a limitation, hindering its ability to capitalize on significant opportunities such as partnerships or investments with GameStop, Robinhood, and Polymarket, as well as early token listings on key crypto exchanges. The company stated, “The tokens weren’t available when needed.”
In contrast to other blockchain projects, which typically retain 50% of the initial token supply for strategic initiatives, Sonic’s sub-3% allocation has forced it to purchase S tokens in the open market. “We have 2018 tokenomics. We need 2025 tokenomics,” Sonic emphasized.
Creating a Deflationary Model for the S Token
To counter new S token issuance, Sonic is planning to revise its gas fee mechanism and allocate a larger share of transaction fees for burning. This initiative is expected to decrease net inflation and create long-term deflationary pressure on the token supply.
Through these measures, Sonic aims to “play with the big TradFi boys (ETF/PIPE) without sacrificing holders,” as stated by the blockchain company. Despite these efforts, the S token has not performed well since its launch in January, with a nearly 69% decline according to CoinGecko.
Sonic’s Role in the US Commerce Department’s Blockchain Program
In parallel, Sonic has been identified as a participant in the US Department of Commerce’s program to publish economic data onchain, utilizing Chainlink’s and Pyth’s blockchain oracle services. This development allows developers to access US macroeconomic statistics directly on Sonic, bypassing the need to visit the Department of Commerce’s website.
Sonic believes this move could unlock new innovations on its platform, such as the development of trading models based on gross domestic product and inflation data or the application of macro signals for onchain lenders.
Source: Sonic Labs
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