Sonic Labs, the team behind the layer-1 Sonic blockchain, has been given the nod to issue $200 million worth of its S tokens to expand into the US capital markets, including the creation of a proposed exchange-traded product and a Nasdaq-listed investment vehicle.
Voting ended on Sunday, with 99.99% of Sonic (S) tokens from 105 wallets used to approve the proposal. The proposal also met the required quorum of 700 million S tokens participating in the vote.
The company plans to allocate $100 million in S tokens to build a strategic reserve for a Nasdaq PIPE (Private Investment in Public Equity) vehicle and $50 million for an S token-tracking ETP issued by a “regulated, top-tier ETF provider” with over $10 billion in assets. The fund would be custodied by BitGo, Sonic said.
Sonic said it will also establish Sonic USA LLC, hire a US-based CEO and team in New York to facilitate its TradFi plans and lead engagement in Washington, DC, according to the proposal overview. 150 million S tokens (worth $47.7 million) would be used to bootstrap Sonic USA.
Many publicly listed companies have turned to crypto to strengthen their balance sheets, partly by building crypto treasuries and investing in spot exchange-traded funds. Sonic’s move, however, flips this script by leveraging traditional financial instruments to become more competitive in the crypto space.
Sonic needs “2025 tokenomics”
The Sonic chain launched in December 2024, after rebranding from the Fantom Opera network, with Fantom’s FTM tokens swapped for Sonic’s S tokens at a 1:1 ratio as part of the migration process.
However, the Fantom Foundation held less than 3% of the original FTM token supply as it preferred to buy its own token as opposed to selling it for partnerships.
Sonic said the tokenomics it inherited have prevented it from capitalizing on major opportunities, such as partnering or investing in GameStop, Robinhood and Polymarket, in addition to earlier token listings on key crypto exchanges. “[The] tokens weren’t available when needed,” it said.
It pointed out that most teams behind layer 1 and 2s blockchains retain 50% of the supply from the initial tokenomics for strategic initiatives, but Sonic’s sub-3% allocation has forced it to purchase S tokens in the open market.
“We have 2018 tokenomics. We need 2025 tokenomics.”
Sonic to make the S token more deflationary
Sonic also plans to offset new S token issuance by updating its gas fee mechanism and directing a larger share of transaction fees to be burned, which should reduce net inflation and create long-term deflationary pressure on the supply.
This way, “Sonic can play with the big TradFi boys (ETF/PIPE) without sacrificing holders,” the blockchain company said.
The S token hasn’t performed well since it launched in January, falling nearly 69% since then, according to CoinGecko.
Sonic part of the US Commerce Dept’s blockchain program
Meanwhile, Sonic was listed as a participant in the US Department of Commerce’s program to publish economic data onchain, leveraging Chainlink’s and Pyth’s blockchain oracle services.
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The move means that developers can now reference US macroeconomic statistics directly on Sonic without having to resort to the Department of Commerce’s website.
Sonic said the move would unlock new innovation on its platform — such as developing trading models from gross domestic product and inflation data and applying macro signals for onchain lenders.
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