Sonic Labs, the team behind the high-throughput Layer 1 blockchain formerly known as Fantom, announced plans to restructure how value accrues to its native S token by building and potentially acquiring core protocol applications. The initiative aims to increase token utility, liquidity, and onchain usage through deeper control of economic infrastructure.
In a statement published on X under the title Vertical Integration: The Missing Link in L1 Value Creation, the team explained that Sonic will continue operating as an open and permissionless network for developers. However, it will also seek to reduce “value leakage” by owning and monetizing key economic activities within the chain rather than relying solely on transaction fees.
According to the team, the previous value model relied on a direct relationship between user growth, transaction volume, gas consumption, and token deflation. Sonic now considers the so-called “Gas Fee Only” model insufficient in an environment where blockspace supply has expanded due to rollups, modular architectures, and competing Layer 1 networks. The company argues that increased scalability has compressed fees and reduced scarcity, allowing capital and users to move more freely across chains.
Separately, Andre Cronje, a key contributor to Sonic and founder of several DeFi applications, raised $25.5 million in a private token round for his new onchain exchange, Flying Tulip, which now carries a reported valuation of $1 billion.
Source: Sonic Labs, Chainspect, public statements
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