Summary (TL;DR):
Sonic SVM instead of burning tokens introduces a mechanism of accumulating a lock of a value in the form of purchasing.
Transactions fees will now be dedicated to purchasing $SONIC on the open market 50 percent of all of them.
Tokens are bought and secured in a vault that has a 24-month linear vesting schedule.
Liquidity pools belonging to the protocol will be established and increase $SONIC and SOL liquidity.
SOL staking was proposed, which made Sonic SVM a lot closer to the Solana ecosystem.
Created to help the growing Sonic family of games and social networks.
A Tokenomics renaissance of Sonic SVM
First, Sonic SVM, which is the first Solana Virtual Machine (SVM) chain extension on Solana, has created a paradigm-shifting value accumulation system to its native $SONIC token.
What is more peculiar to this strategic upgrade is that the former model of burning tokens will be substituted by the dynamic model of buy-lock intended to provide a stable buy pressure, thereby enhancing existing liquidity and aligning with the Solana ecosystem evolution.
“And the new mechanism at its core will be a paradigm shift when it comes to how we do long-term token valuations,” said Chris Zhu (CEO of Sonic SVM).
“We are not just burning tokens, we are investing into a long-term strategic approach that generates (strategic) demand but also creates protocol-owned liquidity.”
Fueled by Fees, Constructed to the Future
On the new system:
- The parts of transaction fees paid and already burning will now be used to buy SONIC tokens in the open marketplace, comprising 50 percent of all transaction fees paid.
- These tokens are subsequently placed in a different vault and have a linear vesting schedule of 24 months, further restricting the circulation and raising the scarcity over the time.
Increasing Liquidity and Gyming with Solana
It also brings a new method of handling of $SONIC fee (12.5% of all the fees):
- SOL is staked on the mainnet Solana in exchange of $SONIC.
- Matched vested tokens of $SONIC will be paired to generate liquidity pools on the Sonic SVM mainnet and staking rewards.
- More rewards will be provided to Liquidity Providers (LPs) and this will provide it to be a good option among the community.
According to Alan Zhu, Co-founder and CPO of Sonic, the increase in use of the network leads to the greater pressure on the buy and more depth of the liquidity.
The implication to the community
This new tokenomics is developed to add value to the Sonic ecosystem in various ways:
- Long-lasting token utility due to restricted supply and ever-lasting demand.
- Greater liquidity, better tradability and stability.
- Better integration with Solana, as it will enable SOL staking.
- Higher user incentive so as to make the participation of the LPs active.
Sonic SVM is working on a programmable attention settlement layer on Solana through HSSN network, creating the power to precisely monitor user engagement with decentralized applications on-chain.
This revised tokenomics structure puts the Sonic SVM on a path to make the $SONIC a long-term store of value very much tied to the development of the Solana ecosystem.
Keep your eyes open the complete rollout will happen in few weeks.
Read more at the official Sonic SVM site.