Sonic Blockchain Review: A Deep Dive into Its Ecosystem!

Sonic is an EVM-compatible Layer-1 blockchain rebranded and evolved from Fantom. It is focused on speed, incentives, and robust infrastructure. At Coin Bureau, we've previously reviewed Fantom, highlighting its innovative DAG-based design, which offers significant scalability advantages over traditional blockchains.

The transition from Fantom Opera to Sonic, announced on Aug. 1, 2024, represented more than a mere brand update. Sonic Labs introduced a new network architecture, a revamped tokenomics model, and developer incentives specifically designed for the future of Web3. Sonic's approach is notable because it challenges the prevailing preference for Layer-2 scaling solutions by offering a fast, secure, and interoperable Layer-1 solution.

This article thoroughly covers Sonic's technical features, tokenomics, developer incentives, and broader ecosystem implications. We’ll also assess the platform’s strengths, identify potential risks or challenges, and evaluate the overall effectiveness of the migration from Fantom to Sonic.

Background: Fantom to Sonic

In our earlier review of Fantom at Coin Bureau, we highlighted its distinct Directed Acyclic Graph (DAG)- based structure, which sets it apart from traditional blockchain designs. This architecture allowed Fantom considerable scalability as a layer-1 blockchain, enabling high throughput and rapid transaction finality, which were particularly appealing features in an increasingly competitive blockchain landscape.

However, on Aug. 1, 2024, Fantom Foundation made headlines by rebranding to Sonic Labs, marking a significant evolution in its blockchain vision. This rebranding coincided with preparations for the launch of an entirely new blockchain network, dubbed Sonic, and its native token, $S. Although this move might initially seem like a fresh coat of paint, it represents a more profound strategic pivot toward ushering in what Sonic Labs describes as the next generation of Layer-1 blockchain innovation.

The transition from Fantom Opera to an entirely new network was driven by substantial technical improvements that couldn't be incorporated through an upgrade. Launching an independent blockchain with a new native token allowed Sonic Labs to capitalize on advancements in technology and infrastructure fully. Sonic promises a substantially better developer and user experience. According to their blog, Sonic offers:

• 10x faster node synchronization, dramatically cutting the time required for new nodes to join and synchronize with the network.
• A 66% reduction in validator node costs significantly lowered entry barriers for validators and further decentralized the network.
• Enhanced data management with live-pruning capabilities, eliminating downtime previously required during maintenance.
• A substantially smaller database footprint considerably lowers infrastructure costs—up to a 96% cost reduction for running large-scale RPC nodes.
• Sub-second transaction finality, effectively eliminating the possibility of rollbacks or reorganizations, reinforcing network security.

Moreover, Sonic revamped its tokenomics model, introducing deflationary mechanisms that differ significantly from the Fantom token model. This strategy aims to steadily reduce the token supply, offering additional economic incentives to holders and fostering a healthier ecosystem.⁠⁠⁠⁠⁠⁠⁠ These tokenomics adjustments and significant backend upgrades, such as database management enhancements, were inherently incompatible with the existing Fantom Opera architecture, thus justifying the clean break into Sonic.

With Sonic, the team positions itself to leverage the best of Ethereum compatibility and its own innovative tech stack through EVM interoperability and the secure Sonic Gateway. This strategic pivot suggests Sonic Labs' commitment to becoming a vibrant hub for developers and users, offering substantial incentives and an improved foundation that can compete head-on with the most performant Layer-1 platforms available today.

Sonic Technical Overview

Sonic is an EVM-compatible Layer-1 blockchain engineered to deliver exceptional scalability and efficiency through a Proof-of-Stake (PoS) consensus mechanism. Sonic achieves rapid transaction processing with sub-second finality by leveraging a Directed Acyclic Graph (DAG) structure. Additionally, the network features its native $S token, which is essential for covering transaction fees, staking, and participating in governance activities.

Proof-of-Stake (PoS)

Sonic employs a robust Proof-of-Stake (PoS) mechanism. This mechanism requires validators to lock up the network's native $S token to participate in the consensus process. Validators play a crucial role by validating transactions and creating new blocks, ensuring the integrity and security of the network. Sonic also supports delegated staking for $S holders looking to avoid active node management.

The minimum requirement to run a validator node on Sonic is 500,000 $S tokens. This stake ensures that validators are deeply invested in the platform’s success and security, aligning their interests directly with the network’s overall health and stability. Furthermore, validator rewards are structured around staking, incentivizing active participation, and reliable node management.

Sonic Design

Sonic uses a DAG-based (Directed Acyclic Graph) distributed ledger architecture. While initially sounding complex, DAGs represent a flexible alternative to traditional blockchain designs. Unlike a conventional blockchain, which arranges blocks in a linear chain, DAG networks structure blocks more dynamically. Each block connects to multiple previous blocks, creating a web-like network.

In simple terms, while traditional blockchains resemble a single chain, DAGs look more like a branching tree or graph, allowing transactions to be validated more flexibly. The Coin Bureau's recent article on Blockchain vs. BlockDAG explores DAG as a viable scaling solution for blockchains, noting its potential to significantly increase transaction speeds and network efficiency.

Key characteristics of Sonic's DAG structure include:

• Multiple Block Connections: Each new block (or event) can connect to several previous blocks, forming a complex network rather than a singular linear chain.
• Concurrent Validation: Different validators (nodes) can simultaneously validate different blocks, significantly improving overall throughput.
• Scalability and Speed: The DAG approach enables Sonic to process thousands of transactions per second, as blocks are not restricted to sequential formation.
• No Cyclical Dependencies: Blocks never reconnect or loop back, ensuring transactions move in one direction, from unconfirmed to confirmed, maintaining network integrity.
• Reduced Latency: With DAG, transactions don't wait to be grouped into sequential blocks, leading to quicker validation and reduced transaction confirmation time.

This innovative design underpins Sonic’s ability to achieve high performance and scalability, positioning it as a practical Layer-1 solution for decentralized applications.

DAG with Byzantine Fault Tolerance (ABFT)

Sonic employs an advanced consensus method, Asynchronous Byzantine Fault Tolerance (ABFT), layered on its DAG-based design. Byzantine Fault Tolerance refers to a blockchain’s ability to function correctly even if some nodes act maliciously or fail unexpectedly.

In Sonic’s ABFT implementation, nodes are not required to synchronize their operations strictly by time. Instead, validators independently confirm transactions in their blocks and relevant transactions propagated by other nodes. This asynchronous operation ensures the network continues smoothly, even if some validators are delayed or misbehave.

Here's how consensus via ABFT operates within Sonic:

• Independent Block Creation: Validators independently create and validate their event blocks before propagating them to peers.
• Root Block Formation: Once a majority of validators have acknowledged and validated a propagated event block, it becomes a "root event block."
• Immutable Main Chain: The root event blocks are then organized sequentially into the Sonic main chain, a blockchain that stores the network’s finalized consensus state.
• Efficient State Management: Validators continuously store and update a copy of this finalized main chain, allowing quick access to historical transaction data and enabling efficient processing of new blocks.

By pairing DAG flexibility with ABFT robustness, Sonic ensures fast, secure, and reliable transaction finality. This hybrid approach significantly enhances scalability and performance compared to traditional Layer-1 consensus mechanisms.

EVM Compatibility

EVM compatibility is essential for any Layer-1 blockchain looking to integrate with Ethereum’s extensive ecosystem, and Sonic ticks this critical box. Being fully EVM-compatible, Sonic allows developers to deploy existing Ethereum-based decentralized applications easily without modifying their codebase. This compatibility means that apps previously built using Solidity—the primary coding language for Ethereum smart contracts—can migrate directly onto Sonic without friction or rewrites.

Moreover, Sonic extends its compatibility to support Solidity and Vyper. Vyper is popular due to its clarity and added security for smart contracts, providing developers with more flexibility and options when coding decentralized applications. For builders already familiar with Ethereum or other EVM chains, deploying apps to Sonic requires minimal adjustments

This compatibility dramatically lowers the barrier to entry for developers, enabling Sonic to rapidly onboard and expand its DeFi ecosystem by tapping into Ethereum’s already extensive developer community.

Sonic Database Storage System

A blockchain’s ability to scale is closely tied to how efficiently it handles data storage. Sonic implements a specialized database storage system to efficiently manage and store the blockchain’s world state, including account balances and VM bytecode to smart contract data.

Sonic's storage system's standout feature is its live pruning mechanism. Unlike traditional approaches, live pruning continuously and automatically trims historical blockchain data without requiring validators to go offline, avoiding downtime. Validators no longer need to interrupt their operations for manual database maintenance, significantly enhancing uptime and network stability.

Here's a quick breakdown of Sonic's database storage advantages:

• Efficient Data Management: Automated removal of historical data keeps storage needs manageable and prevents database bloating over time.
• Reduced Validator Cost: By continuously trimming obsolete data, validators save on storage infrastructure and related operational expenses.
• Increased Uptime: Continuous pruning means validators experience minimal downtime, reducing risks associated with validator suspension and reward loss.
• Optimized Data Access: By efficiently storing recent states, nodes provide faster query response times for users and applications on the network.

The live pruning feature represents a crucial upgrade over Fantom Opera, contributing significantly to Sonic's enhanced efficiency, cost-effectiveness, and overall network sustainability.

Sonic Nodes

Nodes are central to any blockchain’s infrastructure, and Sonic operates two primary types of nodes: Validator Nodes and Archive Nodes. Each type serves a distinct role in supporting the Sonic ecosystem.

Archive Nodes store the full history of the Sonic blockchain from its very inception—the genesis block. These nodes preserve historical data, including transaction records, past states, and block details. Archive nodes are particularly valuable for applications or chain explorers that rely on historical blockchain data to operate effectively. However, they don’t participate in validating current transactions or block creation. Think of archive nodes as detailed historical records of the network.

In contrast, Validator Nodes actively participate in the Sonic network’s day-to-day operations. They validate transactions, produce new blocks, and secure the blockchain by maintaining real-time consensus. Validator nodes do not store extensive historical data; instead, they focus primarily on real-time transaction validation, network security, and maintaining the blockchain’s current state. Validator nodes form the backbone of Sonic’s Proof-of-Stake consensus, securing the chain by staking S tokens.

To participate in staking and operate validator nodes on Sonic, users must follow specific requirements:

• Staking: Users can stake their S tokens through the MySonic interface. However, there is a 14-day waiting period before withdrawing staked S.
• Minimum Stake: To ensure network security, a validator node must be launched and operated with a minimum stake of 500,000 S tokens.
• Validator Setup: Validators must create a validator wallet and a unique validator signing key. The public key from this signing key is essential for validator registration.
• As of March 2025, the Sonic network boasts 41 active validators.

When setting up a validator node, meeting specific hardware criteria is essential to maintaining network efficiency and security:

• Server Instance: It is recommended that a dedicated server instance be created, either on bare-metal hardware or through cloud providers like Google Cloud Platform (GCP) or Amazon Web Services (AWS).
• CPU & RAM: Recommended specs include at least 4 virtual CPUs and 32 GB of RAM.
• Storage: A minimum of 1 TB local SSD/NVMe storage is necessary. Remote storage like AWS Elastic Block Store (EBS) typically doesn't provide the required performance.

This robust setup ensures Sonic validators can keep pace with the network’s high throughput and performance, helping deliver the fast and secure experience Sonic aims to offer its users.

$S Tokenomics

The S token is the native token of the Sonic network, central to its ecosystem with roles ranging from transaction fee payments and staking to validator operations and decentralized governance. At Sonic’s launch, the network introduced a fixed initial supply of 3.175 billion S tokens, of which approximately 2.88 billion were circulating immediately. The difference in tokens is strategically allocated to support network operations, such as validator incentives and ecosystem funding.

Initial Supply and Inflation Schedule

The initial token supply of 3.175 billion S tokens was designed to provide a strong foundation for network activities while managing inflation carefully. Although Sonic initially avoided token inflation at launch, community-approved governance proposals outlined plans to introduce controlled token issuance post-launch. Specifically, starting six months after the mainnet launch, the Sonic network will mint an additional 1.5% (47,625,000 S) annually for six consecutive years. These tokens fund strategic ecosystem growth initiatives, including user incentive airdrops, ecosystem expansion efforts, and validator rewards.

Validator Rewards and Block Rewards

Sonic migrated the existing block rewards from the previous Fantom Opera network in a significant move designed to bootstrap validator participation without immediately inflating token supply. This innovative approach provided validators a stable reward rate of 3.5% APR (assuming 50% of the network is staked) without creating additional inflationary pressures for the first four years. After this four-year period, Sonic will resume minting tokens for validator rewards at a sustainable rate of 1.75% annually, ensuring long-term incentivization.

Deflationary Mechanisms

Sonic introduces multiple deflationary mechanisms aimed at curbing inflation and incentivizing beneficial behaviors within the ecosystem:

Sonic Airdrop Deflationary Mechanism (Early Claim Burn):

Sonic incorporates a unique deflationary vesting mechanism to distribute around 200 million S tokens to users. Users immediately receive 25% of their airdrop tokens upon claim. However, the remaining 75% is locked for nine months as ERC-1155 NFT tokens. If users opt for early withdrawal during this vesting period, they sacrifice a portion of these tokens to a burn mechanism, gradually decreasing over time. For instance, an early claim within the first month results in an 88.9–100% burn, while waiting until the ninth month eliminates burn penalties completely. This method incentivizes sustained user engagement and promotes long-term ecosystem activity.

Example: If a user named Alice earns 1,000 S tokens from the airdrop, she immediately receives 250 S. However, If she tries to claim the remaining tokens after just 90 days, she will only receive 249.75 S, burning approximately 500.25 S tokens. This burn mechanism thus encourages users to stay engaged longer, positively impacting overall network activity.

Deflation via Ongoing Network Funding

Sonic introduces another burn mechanism linked to its ongoing funding initiative to ensure responsible network funding and prevent unnecessary inflation. Annually minted tokens intended for ecosystem growth that remain unused within their designated year are permanently removed from circulation. For example, if the network uses only 5 million S from the allotted 47,625,000 S tokens minted in one year, the remaining 42,625,000 S will be burned.

Fee Monetization Burn

Sonic incentivizes application developers through its Fee Monetization (FeeM) program. Participating apps receive up to 90% of network fees from their platforms. However, Sonic imposes a penalty on apps that choose not to participate in FeeM: 50% of the transaction fees from such apps are burned. This mechanism encourages more developers to adopt Fee Monetization, rewarding participation while continuously reducing token supply, contributing to deflationary pressure.

Collectively, these mechanisms allow Sonic to carefully balance token inflation necessary for growth and development while embedding robust deflationary systems to maintain token value and encourage active participation in its ecosystem.

Sonic Ecosystem

The Sonic blockchain is a high-performance, EVM-compatible Layer-1 network capable of handling 10,000 transactions per second (TPS) with sub-second finality. Built specifically for DeFi applications, Sonic merges rapid transaction speeds, security, and extensive incentives to attract developers and users alike.

Chainlink for Cross-Chain Interoperability

Sonic leverages Chainlink's Cross-Chain Interoperability Protocol (CCIP), which provides developers with a secure, decentralized means of transferring assets and data across chains. Chainlink integration offers robust security through multiple validation layers and programmable token transfers, enhancing the functionality of cross-chain applications.

Sonic Points and Gems

To stimulate ecosystem growth, Sonic introduced a dual airdrop mechanism:

• Sonic Points: User-centric incentives rewarding engagement and activity.
• Sonic Gems: Developer-centric incentives, rewarding apps that generate user activity. Apps can redeem Gems for S tokens to further incentivize user activity.

USDC.e Integration

Sonic features USDC.e, an official bridged version of USDC from Ethereum, utilizing Circle’s Bridged USDC Standard. This stablecoin provides seamless DeFi interactions, supporting efficient trading, liquidity provision, and cost-effective payments across the ecosystem.

Solv Protocol Collaboration

Through its partnership with Solv Protocol, Sonic introduces yield-bearing Bitcoin assets (SolvBTC and SolvBTC.BBN) and a liquid staking token for Bitcoin, enhancing Bitcoin’s usability within DeFi. Users can mint these assets to earn yields and participate in broader financial strategies.

Rings Protocol

Leveraging Rings Protocol and Lombard Finance, Sonic offers advanced Bitcoin derivatives such as scBTC (yield-bearing Bitcoin asset) and LBTC (liquid staking Bitcoin token). These tokens facilitate Bitcoin's integration into Sonic’s DeFi landscape, providing options for yield generation, liquidity, and governance participation.

Additional Ecosystem Highlights:

• DeFAI Hackathon: Hosted with partners Hey Anon, DoraHacks, and Zerebro, Sonic’s DeFAI Hackathon offers $295,000 in prizes and encourages the development of AI agents with social and on-chain functionalities to advance DeFAI applications on Sonic.
• MemeCoin Promotion: Sonic introduced the MemeCoin competition, rewarding users holding top-performing memecoins with 1 million OS tokens, highlighting community engagement.
• Arkham Intelligence: This partnership integrates Arkham's real-time blockchain data analytics into Sonic, providing users with advanced tools for entity and address tracking, real-time alerts, dashboards, and visualization. Thus, it enhances transparency and security within Sonic's DeFi protocols. ​
• Symbiosis: The collaboration with Symbiosis facilitates seamless cross-chain token swaps, connecting Sonic with over 30 other networks. This integration enhances liquidity flow and offers users a streamlined experience for cross-chain transactions.
• High-Value DeFi Applications: Prominent applications include Silo Finance (leading lending market), Beets Finance (liquidity and staking), and Avalon Finance (specializing in liquid staking and LSDfi protocols).
• AAVE Integration: AAVE V3 is deployed on Sonic, further enriching the ecosystem by providing advanced decentralized lending solutions.

Additional Highlights:

• Pierre Gasly Partnership: Sonic has partnered with Formula One driver Pierre Gasly for the 2025 World Championship, emphasizing shared values of performance excellence and innovation.
• Developer Incentives: Sonic promotes extensive developer activity through its Innovator Fund, which supports project innovation, and Fee Monetization, which rewards developers with 90% of transaction fees generated by their apps.

Sonic positions itself as a compelling Layer-1 blockchain through advanced infrastructure, attractive incentives, secure bridging, and strategic integrations, shaping a vibrant ecosystem for users and developers alike.

Sonic Strengths and Risks

The following comprehensive overview highlights Sonic’s potential while clearly outlining key risks to consider for investors, users, and developers evaluating the platform.

Pros/Strengths:

• High Throughput and Fast Finality: Sonic’s DAG-based consensus mechanism delivers over 10,000 TPS with sub-second finality, providing immediate transaction confirmation suitable for applications that demand speed and scalability.
• Full EVM Compatibility: Developers familiar with Ethereum can deploy Solidity or Vyper smart contracts directly onto Sonic with minimal friction. This lowers barriers to entry and accelerates ecosystem growth.
• Unique Developer-Centric Features (Fee Monetization - FeeM): Sonic’s Fee Monetization program incentivizes developers by returning up to 90% of transaction fees generated by their DApps. This Web2-like monetization model can attract developers by providing a sustainable revenue stream that is absent on most blockchains.
• Robust Tokenomics and Deflationary Mechanisms: Sonic introduces innovative tokenomics, featuring ongoing token burns (airdrop burn, unused funding burn, FeeM burn) that maintain token value while funding ecosystem growth.
• Existing Market Recognition via Fantom Heritage: The Fantom network was already well-regarded in Web3 circles. Sonic inherits Fantom's brand equity, established community, and industry presence, potentially aiding in user and developer adoption.
• Strong Infrastructure and Tooling: Comprehensive developer tooling simplifies developer onboarding, including dedicated testnets (Blaze), easy contract deployment methods, and integrations with leading Web3 tools (Alchemy, The Graph, Band Protocol, etc.).

Risks/Cons/Challenges:

• Limited Migration Despite EVM Compatibility: Although fully compatible with Ethereum’s EVM, Sonic has seen limited migration of popular DApps from other EVM chains. Projects typically prefer to remain within Ethereum’s proven ecosystem or move toward Layer-2 scaling solutions.
• Layer-2 Dominance: Ethereum's expansion efforts are dominated by Layer-2 scaling solutions like Optimism, Arbitrum, zkSync, and Polygon zkEVM. As a standalone Layer-1 chain, Sonic faces significant competition from these L2 networks, which often offer seamless integration with Ethereum's liquidity and community.
• Relatively Low Number of Active Validators: At the time of writing, the network had only 41 active validators, which could pose potential risks related to centralization. The small validator set could also affect developers' and users' perceptions of network resilience, decentralization, and security.
• Diminishing Value of High Throughput as a Unique Selling Point: While high TPS and low latency once differentiated projects, numerous Layer-1 and Layer-2 networks now offer comparable or superior performance metrics. This reduces Sonic’s unique value proposition in a crowded marketplace.
• Limited DApp Migration and User Retention: Initial adoption has shown minimal migration of DApps from Fantom Opera despite full EVM compatibility, possibly indicating developer hesitancy, friction in migration processes, or insufficient incentives for existing projects.
• Decentralization Concerns (Low Active Validator Count): Sonic currently has only 41 active validators, which presents decentralization challenges. Limited node distribution increases potential centralization risks, potentially undermining security and user trust.
• Innovation Adoption and Community Momentum: Despite rebranding and new features, the initial community momentum built under Fantom must be re-established. If developer incentives or user interest fade post-migration, community engagement might decline.

Final Thoughts

Sonic offers substantial innovations and clear improvements over its Fantom predecessor. The decision to launch a completely new chain instead of merely upgrading Fantom Opera was justified by several critical technological enhancements: sub-second transaction finality, significantly faster node synchronization, drastically lower validator costs, and advanced database storage management with live pruning. Unique developer-centric features, especially the Fee Monetization model, provide meaningful incentives to attract dApp builders.

These strategic changes clearly distinguish Sonic from being merely a superficial rebranding. Instead, Sonic Labs successfully used the rebrand as an opportunity to introduce technical advancements and compelling incentive structures explicitly tailored for developers and active participants.

However, despite these positive developments, Sonic's ecosystem remains underdeveloped. The blockchain continues to face stiff competition from Layer-2 solutions preferred by Ethereum developers, and early migration of dApps from Ethereum and Fantom Opera has been slow. To gain meaningful adoption, Sonic must build a robust dApp ecosystem, expand node decentralization, and overcome Ethereum’s gravitational pull toward Layer-2 networks.

Ultimately, Sonic shows significant promise with strong technical capabilities, developer-focused innovations like Fee Monetization, and a thoughtful approach to tokenomics and incentives. Its success will largely depend on attracting a vibrant ecosystem of applications, builders, and users in a fiercely competitive landscape.