Layer-1 Blockchain Sonic, formerly known as Fantom, is making a strategic change of course and switching to a vertical integration model in order to increase the value of its native asset S coin. According to the official statement made on Wednesday, the Sonic Labs team aims to prevent “value leakage” by gathering economic activities on the Blockchain and establish a sustainable ecosystem with the revenues obtained. Abandoning the traditional model focused on gas fees decreasing as the supply of block space increases thanks to advanced scaling technologies, the network now aims to directly benefit coin holders by developing or purchasing its own core financial applications.
The End of the Gas Fee-Oriented Model and the New Economic Infrastructure
Transaction fees, which are considered a primary source of revenue in traditional Blockchain ecosystems, are described as a “proven failure” by Sonic Labs. The team argues that the developments in the last five years show that a growth model based solely on gas fees is insufficient. Layer-2 solutions, modular architectures and high-capacity designs eliminate block space scarcity, forcing networks to become more comprehensive value producers rather than just data carriers. In order to keep up with this structural change, Sonic plans to move beyond being just an infrastructure provider and become the owner of the most critical financial instruments working on it.
While the network management emphasizes that it will continue to offer an open and permissionless structure to developers, it will take control in the areas with the highest economic traffic. In particular, “flagship” products such as trading, credit, payment and risk markets will either be built by the Sonic team or will be integrated into the network by purchasing quality application teams in the industry. With this strategy, the network is expected to create a closed and profitable cycle within itself in today’s market, where users and capital move freely between different ecosystems.
This vision of the network is modeled on successful models such as Hyperliquid, where the application and the infrastructure are inseparable. The $25.5 million fund raised by Andre Cronje, one of the founders of Sonic, for the new onchain exchange Flying Tulip and the company reaching a valuation of $1 billion is seen as one of the first concrete steps of this vertical structuring process. By building a mechanism where every transaction, every liquidation and every fee on the network directly strengthens the S coin, it is aimed for the coin to gain an intrinsic value independent of market dynamics.
Redemption Mechanism and Sustainable Value for S Coin
One of the most concrete outcomes of vertical integration is how the revenue generated on the network will return to S coin owners. Sonic Labs will use the revenue streams from the core financial products it will control to buy back S coins from the market. While this approach is similar to the Ethereum Layer-2 solution Optimism directing half of its revenues towards purchasing OP coins, Sonic promises deeper integration by extending this to the application layer. The previously announced FeeM system, which leaves 90% of the fees to application developers, will remain as a side element that supports this new model, rather than contradicting it.
The high transaction speed and low latency of the network form the technical basis of this new economic model. With a capacity of hundreds of thousands of transactions per second, Sonic aims to create a huge volume by becoming the center of high-frequency financial transactions. Acquisitions and internal product development moves will ensure that the platform is not just a “road” but also the owner of the most profitable businesses on that road. Thus, profit margins in the Blockchain economy will be injected directly into the underlying asset of the network, rather than escaping to third-party applications.
With this strategy, Sonic Labs plans to minimize what it defines as “value leakage” and turn the S coin into an investment asset rather than just a governance or gas unit. The team believes that real value can only be maintained in systems where the application and infrastructure are in a symbiotic relationship. This radical transformation sets an important precedent for how infrastructure providers in the Blockchain world can evolve into financial holdings in the future.
