In today’s newsletter:
🔎Can Fantom (Sonic) make a comeback?
📊On-chain alpha
😂Crypto meme of the week
🗞️The latest DeFi news
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🔎Can Fantom (Sonic) make a comeback?
In late 2021, Fantom (which has recently been rebranded to Sonic), was one of the most popular L1 blockchains and the go-to place for degens.
Despite this, the project has been hit pretty hard during the bear market.
The TVL of the Fantom L1, which once was almost $15b, has dropped to ~$153M.
However, in an attempt to revive the blockchain activity, its team has spent the past few years developing Sonic - the project’s biggest upgrade ever
This seems to be one of the biggest upcoming DeFi catalysts in Q4, so I thought it would be interesting to cover it in-depth in today’s issue.
Here’s all you need to know about the Sonic Upgrade:
1. The Network Upgrade
First of all, let’s talk about the changes that Sonic will bring in terms of tech:
higher scalability - Sonic L1 will allegedly enable the network to process 10,000 real transactions per second with a 1-second finality
90% lower storage requirements for validators
This will be made possible by introducing a novel storage system and a new EVM-compatible virtual machine which is called the Fantom Virtual Machine.
A native bridge connected to Ethereum
Sonic Gateway is a trustless bridge that will enable transfers from Ethereum to Sonic L1 in up to 10 minutes and up to 1 hour from Sonic to Ethereum.
What makes it interesting is that Gateway will be fully decentralized and controlled by the network validators, which isn’t the case for most crypto bridges.
2. The New $S Token Launch
$FTM, the current token of the project, will transition to the $S token following the launch of the Sonic mainnet upgrade.
Just like FTM, S will be used to participate in governance and pay gas fees.
But in addition to that, the $S token will also be used to validate its new native bridge and collect all the bridging fees generated by it.
3. New Incentive/Airdrop Programs
Sonic will distribute ~$130M to its community as part of a new airdrop campaign.
To qualify for these rewards, you have to use certain dApps on Sonic testnet and on mainnet once it launches. (Sonic mainnet launch is scheduled for December)
Right now the only way to participate is to:
go to airdrop.soniclabs.com
introduce a registration code (e.g. s8sjft)
click on “Sonic Arcade” and play one of the games available on Sonic testnet
Besides this, the project has also launched Sonic Boom - a grants program that will offer up to 30 winning projects a part of the Sonic airdrop.
4. Andre Cronje’s upcoming DeFi primitives
If you’ve been in crypto for a while, you probably heard at least once about Yearn Finance and Aerodrome, two of the most successful DeFi projects.
Both protocols are based on the smart contract code written by Andre Cronje - a key member of the Sonic team and a very well-known web3 developer
Andre Cronje said a while ago that he has 4 unreleased DeFi primitives.
He will probably release them exclusively on Sonic L1.
Given the huge success of his previous projects, their launch could attract a lot of attention to the Sonic ecosystem.
5. The Gas Monetization Program
Another interesting feature that will be part of the Sonic Upgrade is the Gas Monetization Program. (GasM program)
This program will reward developers using a web2-like revenue-sharing model:
A % of the gas fees paid by the users of the dApps who applied to join the GasM program will go to the app's developers instead of validators.
The more successful a certain dApp is, the higher this % can be.
Up to 90% of the gas fees will be shared with the developers of the top dApps on the network. In this way, the GasM program might encourage new builders to build their projects on top of Sonic.
This is all the key info you need to know about the upcoming Sonic upgrade.
All in all, I believe that this is a catalyst worth keeping an eye on.
Sonic (or Fantom) has a very strong community, so I expect to see a lot of discussions about this catalyst on Crypto Twitter over the next few months.
On-chain Alpha🔎
7 of the top 15 blockchains by TVL are Ethereum L2s
Ethereum’s plan to scale through L2s has been working very well so far.
But the next step in my opinion for Ethereum to be able to maintain its position as the most popular settlement layer is to solve the liquidity fragmentation issue.
The reality is that the current bridging process is a nightmare for most newbies.
To onboard the next 1 billion users on-chain, we need solutions that abstract away the complexities of sending funds from one L2 to another.
Crypto Meme😂
The latest developments in DeFi
Uniswap introduced Unichain - a new L2 designed for DeFi. Its goal is to enable seamless multi-chain swapping
Ethereum DAO is discussing a proposal to increase the network throughput by 50%
FTX's plan to distribute $16b in cash to creditors was approved. The repayments will start within the next 60 days
Babylon, a popular BTC staking solution, launched its points program
Optimism unveiled Airdrop #5 for its most active users. Users who interacted with at least 20 unique contracts on Optimism Superchain are eligible
Mortgagefi, an under-collateralised lending primitive, announced its upcoming mainnet launch on October 15
CARV, a popular modular data layer for Gaming & AI, launched its token $CARV
Jupiter launched Jupiter Mobile - an app that aims to offer the best mobile swap experience on Solana
UAE eliminated Value Added Tax (VAT) on all crypto transfers
Scroll L2 announced the launch of its token $SCR. 7% of its total token supply was allocated to the first airdrop
Sonic (formerly Fantom) announced the integration of LayerZero
Ethena’s Season 2 airdrop is now claimable
Visa announced its tokenized asset platform. The platform is designed to help banks bring fiat currencies on-chain
Infinex started using Wormhole as its primary interoperability solution
Peapods Finance introduced Leveraged Volatility Farming, which enables profiting from volatility
That’s all for this week!
Until next time,
The DeFi Investor
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