TL;DR

Initial Objectives

• Support U.S. ETP/ETF, NASDAQ Private Investment in Public Equity (“PIPE”) vehicle, and additional institutional S buyers.

• Rollout of Sonic USA LLC; Addition of CEO of Sonic USA and full US-based team, establish NYC presence, performance-based packages for new personnel.

• Increase burn rate in gas fee mechanisms to strengthen long-term deflation.

Two potential options for our community to choose from to change the network parameters:

1) Approve Issuance of Tokens For

• $50M ETF Allocation
• $100M NASDAQ PIPE Development
• 150M S Tokens Sonic USA

Or

2) Reject All

Preface

We have 2018 tokenomics. We need 2025 tokenomics.

In 2018, under our previous name Fantom, our main objective was a layer-1 chain that was fully decentralized. The ultimate goal was that the Fantom Foundation should only be a minor stakeholder by 2020. The tokenomics were designed towards this goal. Today, that approach does not suit the current market and is therefore no longer our goal.

Just as Sonic Labs has superseded Fantom, we are not content to maintain the status quo; we want to pick up where Fantom left off and create a chain with unrivaled metrics: speed, cost, stability, security, and above all, the best overall user experience. In order to accomplish these objectives, we need to change our tokenomics.

As part of this evolution, the newly formed Sonic USA will lead the charge. Sonic USA will hire a new CEO as well as other key executive positions. The focus is to drive adoption and growth and lead engagement in Washington D.C. The process of finalizing these positions is underway. The Sonic Labs team has already structured a Delaware entity (Sonic USA LLC) which is ready to leverage and act as a home base for this new entity.

Sonic started by only holding 3% of its original token allocation due to the community takeover of Fantom, putting us at a disadvantage against peers who control 50–90%+ of their supply. This has limited our ability to act quickly on major opportunities, including GameStop, Robinhood, Polymarket, earlier listings on key exchanges, and multiple Web2/TradFi deals, because tokens weren’t available when needed.

Additionally, competing projects are actively using large reserves to boost their rankings on CMC and CoinGecko, increasing visibility, perceived value, and premium. Despite starting at a disadvantage, Sonic has proven unmatched performance. With modernized tokenomics, we will not just catch up, we will lead. This proposal seeks community feedback on the issuance of direct methods for achieving ETF/ETP and PIPE structures as well as Sonic USA bootstrapping.

1. Background & Rationale

Sonic Labs wants the community to decide the steps moving forward and how the network should position the chain’s motives for institutional/corporate, TradFi, and retail-based products/vehicles.

Sonic’s position in the blockchain landscape is unique:

Fantom Community Takeover Unlike most modern L1/L2 projects that retain 50%+ of supply from the initial tokenomics for strategic initiatives, Sonic is at a disadvantage and has nearly 0% of the original tokenomics allocation. Nearly all tokens currently held by Sonic Labs have been repurchased from the open market through strategic DeFi activity led by Andre Cronje. Sonic Labs has no “supply control”.

Competitive Disadvantage Competing blockchains have the advantage of large, liquid token treasuries that allow them to move quickly, secure high-profile partnerships, and capture market share in fast-moving institutional contexts. The Sonic Labs team has tokenomics from 2018 and is in need of modernized tokenomics where it can compete actively with our peers.

Timing With the continuous increase of institutional demand from the United States for S, the Sonic Labs team has outlined an initiative in this proposal to expand Sonic's reach into traditional financial markets with this reserve.

2. Usage Structure

Usage: Tokens will be deployed as directed by the Sonic Labs including for the strategic initiatives outlined below:

2.1 ETP/ETF Enablement

• Partner with a regulated, top-tier ETF provider (>$10B AUM) to launch an S-tracking ETP/ETF.
• Custody via BitGo (>$140B in custody) with institutional-grade security and insurance.
• Seed liquidity and support fund operations.

2.2 NASDAQ PIPE

• Build a strategic reserve to strengthen the balance sheet of a NASDAQ-listed vehicle.
• Leverage new capital to acquire S tokens on the open market and OTC for treasury inclusion.
• Tokens allocated to this vehicle will be locked for a minimum of three years, ensuring alignment with listed companies that share long-term conviction in Sonic’s vision.

2.3 Sonic Expands to the United States via Sonic USA LLC

• Establish Sonic USA CEO
• Hire Sonic USA CMO, Director of Capital Markets, BD team, NYC office/ecosystem workspace
• US economics and policy
• Highlight US regulatory alignment
• Emphasize USDC use case and dominance in Sonic DeFi
• Showcase US-based partnerships

All tokens minted will be tracked on-chain and initially controlled by Sonic Labs multisigs, with addresses being made public via documentation.

3. Network Fee Mechanism & Supply Update

This proposal introduces the following supply and fee changes:

Gas Fee Distribution Update

• FeeM Transactions: 90% to builders, 5% to validators, 5% burned.
• Non-FeeM Transactions: 50% burned, 50% to validators.

These changes will reduce net inflation and create a more deflationary environment for S over time.

4. Market Context

Many top blockchains and protocols maintain direct control over a majority of their token supply, allowing them to rapidly execute on strategic opportunities. Sonic currently controls almost none, and this proposal seeks to close that gap in a transparent manner. It also allows teams to rank up on CMC and CoinGecko, providing more access and premium to the project.

This strategic issuance will allow Sonic to stand out in the market, move fast with TradFi opportunities, and shine a light on the outstanding technical advancements the team has accomplished over years of research and successful mainnet deployment.

The unfortunate reality is that the market has shifted from Bitcoin's full-dilution vision to a “lowfloat high FDV” landscape where chains are now acting like companies rather than decentralized entities. Absent the proposed changes, Sonic Labs’s growth will remain susceptible to competitors employing modern tokenomics.

“Unlike most of our competitors, the foundation owns a relatively small amount of FTM. Most comparable L1s own between 50%–80% of their token supply. At launch, Fantom owned less than 3%. Today [November 28, 2022], we own more than 14%. We prefer buying our token, we don’t ‘sell’ our tokens for ‘partnerships’.”

“Other than ETH, Fantom is the oldest non-fork L1 with any meaningful TVL. We have been operating for over 4 years, and we plan to continue operating for at least another 30. We have a proven track history of technological advancements and delivery”.

— Andre Cronje

The current non-S treasury positions in stables/crypto assets/non-crypto assets are intact and securing the future decades of research, development, and advancement of Sonic adoption. But this isn’t enough to compete to acquire the major opportunities described above.

5. Potential Voting Options

• Option 1 – Approve Issuance of Spot Value $50M ETF + Up to $100M PIPE Allocation Including 150M S Tokens for Sonic USA.

Authorizes the issuance of S tokens equivalent to $150M USD for ETP/ETF enablement and NASDAQ PIPE. Issuance of 150M S tokens for Sonic USA bootstrap. Updated gas fee burn mechanism is implemented. No additional reserve is created. BD annual issuance is unchanged.

• Option 2 – Reject All

No new tokens are issued; current tokenomics and fee distribution remain unchanged.