Sonic Labs, the developer of the Layer 1 blockchain Sonic, announced on Tuesday that it is upgrading the token economics of the Sonic chain through four successful governance proposals on the Fantom chain, including an airdrop of approximately 200 million S tokens.
According to Sonic Labs on the community platform X, the initial total supply of S tokens during the token issuance phase is 3.175 billion, with a circulating supply of approximately 2.88 billion. Holders of the native token FTM on the Fantom chain can convert FTM to S at a 1:1 ratio. Sonic officially launched its mainnet on December 18th, and users can already perform token conversions on its MySonic website.
According to Sonic’s documentation, the token issuance will be primarily used for three purposes: airdrops, ongoing funding, and block rewards. Multiple burning mechanisms will also be implemented to control the token supply limit.
Sonic Labs stated that six months after the issuance of S tokens (expected to begin on June 18, 2025), the Sonic chain will mint 6% of S tokens (190.5 million) equivalent to the initial supply as part of the airdrop activity to reward users and developers. A linear burning mechanism lasting nine months will gradually reduce the total supply of S tokens while rewarding participation.
Furthermore, six months after issuance, Sonic will begin minting 1.5% of the initial total supply (47.625 million per year) to fund the network’s growth for a continuous period of six years. To prevent token inflation, the network will burn any unused newly minted tokens each year to ensure efficient use of funds.
To protect the token value and avoid creating new inflationary rewards during the early stages of Sonic’s launch, the blockchain will not mint new tokens for block rewards in the first four years. After four years from token issuance, S block rewards will resume and new tokens will be minted at a rate of 1.75% per year to reward validators. Sonic Labs stated that all unused ecosystem growth tokens will be recorded and burned annually.
Lastly, Sonic Labs stated that the maximum expansion cap for S tokens will be 15% (excluding block rewards) until 2031. Multiple burning mechanisms are expected to significantly reduce the expansion rate during this period.
On the other hand, Binance announced today that it will support the token swap and rebranding of Fantom (FTM) to Sonic (S). The exchange will halt trading and delist all existing FTM spot trading pairs on January 13, 2025, at 11:00 (UTC+8), and open spot trading for S tokens on January 16, 2025, at 16:00.
Related article: “Sonic Mainnet to be Publicly Released, Founder Andre Cronje: Plans to ICO all my DApps”
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