HTX Research Latest Report 丨Sonic: A Model for the New DeFi Paradigm

Sonic’s Evolution: 2000+ TPS, 0.7s Confirmation, Near-Zero Fees

The Fantom Opera blockchain, initially recognized for its speed and throughput as a high-performance aDAG-based Layer 1 solution, encountered scalability limitations as its ecosystem expanded. Its traditional EVM architecture struggled with bloated state storage, slow node synchronization, and execution bottlenecks. To overcome these challenges without resorting to sharding or Layer 2 solutions, Fantom developed Sonic — a fundamental redesign engineered to deliver a significant performance leap.

Sonic Labs, a new team led by CEO Michael Kong, CTO Andre Cronje (founder of Yearn Finance), and Chief Research Officer Bernhard Scholz, dedicated  two and a half years to the redesign of  Fantom’s virtual machine, storage, and consensus. They built Sonic, a new, independent EVM-compatible chain capable of processing over 2,000 TPS, achieving 0.7-second finality, and executing transactions at a cost of $0.0001. It also improves storage efficiency by 90% and reduces node synchronization time from weeks to under two days.

Technical Innovations Driving Sonic’s Performance

Sonic’s enhanced performance is underpinned by three core technological advancements:

• SonicVM: A newly developed virtual machine fully compatible with the EVM, SonicVM optimizes computationally intensive operations like SHA3 hashing, pre-analyzes jump instructions, delivers significantly faster execution, and supports high throughput.

• SonicDB: Achieving nearly 90% data compression, SonicDB uses a layered storage strategy that splits the blockchain state into two databases: LiveDB for the current global state and ArchiveDB for historical blocks and states. This reduces node requirements and enhances network resilience through greater decentralization.

• Sonic Gateway: Functioning like an “L2-like” bridging solution to Ethereum, it uses a batch processing mechanism that strikes a balance between security and efficiency, enabling seamless two-way asset transfers and ecosystem access.

Sonic Tokenomics: Dual Incentives for Developers and Users

Sonic has launched its native token, $S, which is exchangeable with FTM  at a 1:1 ratio. The $S token powers the Sonic ecosystem through gas fee payments, staking, and governance voting.Key features include:

●  Gas Fee Monetization (FeeM) Mechanism: Developers can earn up to 90% of transaction fees, incentivizing ecosystem growth. Non-FeeM applications will burn 50% of fees to counter inflation.

●  Points-Based Reward Mechanism: Users earn points (Passive/Activity Points and Gems) by holding $S, participating in DeFi activities, or interacting with the ecosystem. These points are redeemable for a total of 200 million $S, promoting a sustainable “use-to-mine” loop.

Stablecoin Ecosystem: Nested Yield and Resilient Growth

Defying market trends in 2025, Sonic’s on-chain Total Value Locked (TVL) surged by over 500%, with the total stablecoin supply surpassing $260 million. This growth is driven by sophisticated high-leverage yield mechanisms.

●  Silo v2 Loop Lending: Use staked S tokens to borrow stablecoins, achieving up to 20x exposure to capture combined incentives alongside stable yield spreads.

●  Euler + Rings Protocol Combo: Deposit USDC to mint scUSD, then use leverage to potentially achieve up to 10x yield, along with Sonic points and protocol rewards.

●  Shadow DEX Liquidity Provision for Rewards: By facilitating trading activity, particularly with the S/stS pair on Shadow, users can earn up to 169% APY and a share of trading fees.

Looking ahead, the ecosystem will incorporate Real World Asset (RWA) yields and off-chain payment solutions to create a sustainable and widely used stablecoin ecosystem backed by compliant assets and real-world applications.

Sonic’s Innovations in DeFi Infrastructure: Adaptive AMM and Dynamic Risk Control

Sonic’s decentralized exchange (DEX), FlyingTulip, designed by Andre Cronje, integrates trading, lending, and leverage with two key innovations:

– Adaptive AMM Curve: By combining Curve V2’s liquidity aggregation with oracle-driven volatility monitoring, FlyingTulip’s AMM dynamically adjusts its shape. It offers low slippage in stable markets (similar to a constant sum curve) and prevents liquidity issues in volatile markets (similar to a constant product curve), resulting in a 42% reduction in impermanent loss and an 85% improvement in capital efficiency.

– Dynamic LTV Model: Inspired by Curve’s LLAMMA, FlyingTulip’s lending platform adjusts Loan-to-Value (LTV) ratios in real time based on market volatility. For example, ETH borrowing limits can decrease from 80% in stable conditions to 50% during periods of high volatility, enhancing system stability.

Conclusion: Sonic – Leading the Charge in DeFi 2.0

Sonic’s high performance, nested yields, and accessibility position it for rapid growth, with the potential to exceed $2B TVL and a multi-billion $S token market cap within a year. More importantly, Sonic is championing an “efficiency revolution” in blockchain design—prioritizing performance and capital efficiency to attract liquidity.

The report identifies technical challenges, including the adaptive AMM’s reliance on external oracles, which introduces potential vulnerabilities. . Furthermore, the inherent risks of high-leverage strategies in volatile markets necessitate the use of hedging instruments, such as short perpetual futures, to mitigate potential liquidations.

From a broader view, Sonic is well-positioned to lead the expected 2025 DeFi resurgence. Its thriving stablecoin ecosystem boosts the value of both the $S token and the network. Even in a bear market, Sonic demonstrates the potential for DeFi to establish resilient “yield havens” through innovation and performance.  With its nested yields, developer-focused incentives, and efficient infrastructure, Sonic provides a model for the industry. The integration of RWAs and payment tools could place Sonic as a critical bridge between on-chain yields and real-world utility, driving DeFi toward mass adoption

For full report, please visit: https://square.htx.com/wp-content/uploads/2025/04/HTX-Research-Latest-Report-.pdf

About HTX Research

HTX Research is the dedicated research arm of HTX Group, responsible for conducting in-depth analyses, producing comprehensive reports, and delivering expert evaluations across a broad spectrum of topics, including cryptocurrency, blockchain technology, and emerging market trends. Committed to providing data-driven insights and strategic foresight, HTX Research plays a pivotal role in shaping industry perspectives and supporting informed decision-making within the digital asset space. Through rigorous research methodologies and cutting-edge analytics, HTX Research remains at the forefront of innovation, driving thought leadership and fostering a deeper understanding of evolving market dynamics.

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