NEW YORK — May 19, 2024 — Sonic SVM, the first SVM chain extension on Solana, today announced a significant enhancement to its tokenomics with an innovative SONIC token value accrual mechanism. The new design replaces the previous burning model with a strategic buy-and-lock system designed to create long-term value for token holders while strengthening alignment with the broader Solana ecosystem.
Purchasing of $SONIC Powered by Fees
Under the new mechanism, 50% of all transaction fees—previously burned—will now be used to purchase $SONIC tokens from the open market. These purchased tokens will be locked in a dedicated vault with a 24-month linear vesting schedule, strategically executed to implement buy pressure and reduce circulating supply.
“This redesigned mechanism represents a fundamental shift in how we think about long-term token value,” said Chris Zhu, CEO at Sonic SVM. “Rather than simply burning tokens, we’re implementing a strategic approach that creates strategic demand while building protocol-owned liquidity. This supports our growing ecosystem of games and applications while rewarding our community of token holders.”
Deepening Liquidity and Ecosystem Alignment
The updated mechanism also introduces a novel approach to $SONIC fees, which represent 12.5% of total transaction fees:
- SOL collected as $SONIC fees will be staked on Solana mainnet
- Staking rewards will be paired with monthly vested $SONIC tokens
- These pairs will form liquidity pools on Sonic SVM Mainnet
- LP providers on Sonic SVM Mainnet will receive additional incentives
This structure creates deeper $SONIC liquidity over time while aligning the token’s growth with Solana’s network health, benefiting both $SONIC and SOL holders.
Community and Ecosystem Benefits
The redesigned mechanism delivers multiple advantages to the Sonic SVM ecosystem:
- Sustained Token Value: Continuous market buys and locked tokens reduce circulating supply
- Deeper Liquidity: Protocol-owned liquidity makes $SONIC more accessible and tradable
- Solana Alignment: SOL staking reinforces Sonic SVM’s commitment to the Solana ecosystem
- User Incentives: Enhanced rewards for liquidity providers drive engagement
“As we continue scaling our infrastructure to support millions of users across our gaming and social platforms, this value accrual mechanism ensures our token economy grows in tandem with network usage,” added Alan Zhu, co-founder and CPO of Sonic. “The more the network is used, the stronger the buy pressure and deeper the liquidity becomes.”
The new mechanism will be implemented in the coming weeks, with detailed documentation available on the Sonic SVM website.
About Sonic SVM
Sonic SVM is the first chain extension SVM to launch on Solana – developing a groundbreaking blockchain protocol that serves as a programmable attention settlement layer. Built on the HSSN network, it offers consensus-level validation of attention-related transactions, granular on-chain access to user activity across dApps, and composable primitives that eliminate the need for each project to build bespoke attention infrastructure.
Media Contact: kinsa@sonic.game
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