Summary:

This governance proposal outlines the integration of Sonic, a high TPS Layer 1 blockchain, with Stargate, a cross-chain and interconnectivity protocol powered by Layer Zero. This proposal outlines a request for the DAO to approve a deployment of Stargate with a USDC and USDT pool on Sonic. This deployment should be incentivised by STG as/when needed according to SIP #23. It is also requested that the DAO migrates and provides liquidity of 1m USDC and USDT respectively from whichever chain makes sense.

Background:

Sonic is an EVM layer-1 platform that offers developers attractive incentives and powerful infrastructure. The chain provides over 10,000 TPS, sub-second confirmation times, and a secure gateway to Ethereum for enhanced liquidity and asset security. The launch of Sonic is scheduled for December 2024.

Motivation:

Shared Liquidity: Stargate will enable Sonic to gain access to Stargate’s vast ecosystem of 15+ blockchains.

Cross-Chain Transactions: Sonic users will be able to safely conduct cross- chain transactions with ease and at a low cost

Integration within DeFi: This integration will serve to open up opportunities for Sonics DeFi ecosystem by attracting LPs to provide liquidity and also DeFi protocols to build on top of Stargate.

Proposal

Sonic proposes for Stargate to deploy on the Sonic mainnet as a Day 1 partner for V2 EVM compatible mainnet launch. Layerzero endpoint will be available on Sonic mainnet on day 1.

To begin, we proposes for the following Stargate pools/pathways to be enabled upon successful deployment:

1. USDC

2. USDT

Both USDC and USDT on sonic on day 1 will be bridged via the Sonic gateway, which is our trustless bridge that facilitates ERC-20 token transfers between Ethereum and Sonic. By leveraging Sonic’s own validator network, with validators operating nodes on both chains, it establishes a secure, decentralized channel between the two platforms. Sonic is in active conversation with both Circle and Tether to get the respective native versions in 2025

Users have access to all funds transferred via the Sonic Gateway; there is no possibility for any centralized authority to override user control or access funds through a master key. The Sonic Gateway is also designed for efficiency. Transfers from Ethereum to Sonic only take up to 10 minutes, while transfers from Sonic to Ethereum take up to 1 hour.

Incentives:

Sonic Points Program:

Sonic is planning an incentive programme of 190,500,000 $S to incentivise users of both Opera and the new Sonic chain. The incentive programme encourages users to provide liquidity across a range of dAPPs and Stargate could benefit from the same.

All the $S earned via the points programme earned by Stargate on Sonic will be redirected towards incentivising the USDT and USDC pools on Sonic

Fee Monetisation Program (FeeM):

The Fee Monetisation (FeeM) program on Sonic, previously named Gas Monetization, offers developers up to 90% of the fees their apps generate, providing them with a sustainable income, retaining talented creators, and supporting network infrastructure.

Stargate has consumed ~$3.5m (adjusted) worth of gas on ethereum mainnet alone since June 2022. With the same volume on Sonic and across the same period, this would have earnt Stargate DAO $3.1m via FeeM on Sonic.

Execution:

If approved, Stargate will launch on Day 1 of Sonic mainnet. USDT and USDC pools/pathways are to be enabled upon the successful deployment of Stargate on Sonic.