Sonic: The Rise of a New Star in Layer 1 Ecosystems

Sonic, as a newcomer in the Layer 1 track, has attracted nearly $1 billion in total locked value ( TVL ) in just 4 months. This EVM-compatible blockchain not only offers high-performance transaction processing capabilities but also innovatively introduces a fee-sharing mechanism, bringing new opportunities for developers and users.

Currently, Sonic is conducting a large-scale token distribution plan while also offering stablecoin strategies with an annual yield of up to 150%, creating a "high yield + token acquisition" win-win situation for users. This article will delve into Sonic's technical advantages and how to participate in these high-yield strategies through simple operations.

1. Project Origin

The Sonic project was initially founded by Michael Kong in 2018 with the aim of addressing the scalability issues of the Ethereum network. After several adjustments and upgrades, with the assistance of Andre Cronje, Sonic ultimately evolved into the high-performance Layer-1 network it is today.

2. Technical Features

Sonic adopts a customized technical architecture, including a dedicated virtual machine, database, and consensus mechanism, while maintaining full compatibility with EVM. As one of the most performant EVM-compatible blockchains, Sonic is capable of supporting over 10,000 TPS processing capacity, with transaction confirmation times of less than 1 second, making it highly suitable for high-frequency trading scenarios such as DeFi and Web3 gaming.

The Fee Monetization (FeeM) mechanism introduced by Sonic is a major innovation. It allows developers to receive 90% of the network fees generated by their applications, effectively addressing the high costs and complex cross-chain operations faced by traditional "application chains."

In addition, Sonic also supports native account abstraction (AA), greatly enhancing the user experience. Through the fee subsidy mechanism, users can even interact with the network without holding native tokens, lowering the participation threshold. The dynamic fee feature allows applications to flexibly adjust user fees based on different scenarios.

3. Token Distribution Plan

Sonic has launched a long-term points program that will distribute 200 million tokens over a period of more than a year. The program aims to incentivize user participation and developer contributions, thereby driving the overall development of the ecosystem.

Users can earn passive points by holding or using specific assets (such as scUSD, USDC.e, scETH). At the same time, active points can be earned through on-chain interactions such as trading, staking, or providing liquidity. At the end of each quarter, these points can be exchanged for tokens.

For developers, Sonic has established a special competition mechanism that allows them to earn token shares through contributions, which can be distributed to the user base of their respective applications.

It is worth noting that among the tokens obtained through points, 25% will be unlocked immediately, and the remaining 75% will be released linearly in the form of NFTs over 270 days. The token distribution expected to take place in June may present some investment opportunities, especially for those investors looking to buy tokens at a low price.

During the process of earning points, users need to pay attention to some details, such as the fact that both tokens in the liquidity pool must be whitelisted assets to calculate passive points, while certain assets like WETH and USDT can only earn active points.

4. High Yield Participation Strategies

4.1 Provide Liquidity

Users can provide liquidity in two pools on a specific platform: bUSDC.e-20/wstkscUSD or aSonUSDC/wstkscUSD. These pools not only offer high APR returns (16.7% and 22.27% respectively) but also come with additional point rewards.

The steps are as follows:

1. Deposit USDC on the lending platform to obtain bUSDC.
2. Deposit USDC on the staking platform to obtain scUSDC, then stake to receive stkscUSD, and stake again to get wstkscUSD.
3. Finally, add liquidity to the trading platform.

Note: The redemption process for wstkscUSD may take up to 10 days, but small amounts can be directly exchanged for USDC in the secondary market, reducing the waiting time.

4.2 Participate in governance voting

Principle: Certain protocols allow users to obtain governance rights through staking, and they can earn additional rewards through voting.

Specific operations:

1. Stake USDC to get stkscUSD.
2. Lock stkscUSD to gain voting rights.
3. Participate in voting on specific platforms to choose the projects with the highest returns.
4. A vote is held once a week, and currently, due to the low number of participants, the annualized yield can reach 150%.

Users can choose to vote manually or use automated tools to simplify the process.

It is important to note that liquidity provision and governance voting strategies are usually an either-or choice. The liquidity strategy allows for withdrawal at any time, while the voting strategy may require a lock-up for a certain period. Currently, due to the limited number of users participating in governance voting, its capital efficiency may be higher.

Conclusion

The development of Sonic relies not only on its tokens but, more importantly, on the construction of its ecosystem and the expansion of its user base. With the addition of more innovative applications and users, Sonic is expected to occupy an important position in the Layer 1 track.