I. What is Sonic?

Sonic is a high-performance Layer 1 blockchain initially derived from Fantom. After undergoing technical upgrades and a rebranding, it officially launched in 2024. Its key technical features include:

• Ultra-high throughput: Officially claims to support 10,000 TPS (transactions per second), with some test data even suggesting figures as high as 370,000 TPS—far exceeding Ethereum (around 20 TPS) and Fantom Opera’s 200 TPS.

• Fast confirmation times: Transactions are confirmed within 720 milliseconds to 1 second—faster than Solana (which takes around 12.8 seconds for full confirmation)—becoming its highlight for being “the fastest EVM chain.”

• EVM compatibility: Fully compatible with the Ethereum Virtual Machine (EVM). Developers can directly migrate existing Solidity or Vyper projects, lowering the development barrier.

• Sonic Gateway: A decentralized cross-chain bridge that supports rapid asset transfers between networks like Ethereum, while balancing both security and efficiency.

Sonic’s positioning is to serve as a developer-friendly, efficient, and low-cost public chain, particularly targeting DeFi, GameFi, and enterprise-level applications.

You might ask, how is Sonic different from other layer1s?

Below is a comparison table of various Layer 1 blockchains:

Sonic combines EVM compatibility (similar to Ethereum) with high performance (close to Solana/Aptos), filling a gap between the two. Meanwhile, “Fee Monetization” (FeeM) is a unique mechanism; most other chains rely on foundation grants or do not offer direct revenue sharing. Sonic’s transaction fees and confirmation times are at the leading edge of the industry—only slightly behind Solana and Aptos/Sui—while offering better compatibility. At the consensus level, Sonic is based on Fantom’s Lachesis consensus mechanism with further optimizations. Lachesis uses a DAG for parallel transaction processing and provides aBFT security and finality, balancing both performance and decentralization. It offers deterministic finality: once a transaction is confirmed, it cannot be reversed. This feature is critical for DeFi and high-frequency trading, preventing double-spending or delayed confirmation.

With this technical background in mind, let’s look at how Sonic, since its launch at the end of 2024, has been attracting traffic.

II. Shadow Exchange — The Origin of a Wealth Effect

Project Overview:

@ShadowOnSonic is based on a CLMM (Concentrated Liquidity Market Maker) model. Its token $SHADOW rose 33x within 20 days after launch, reaching a circulating market cap of around $26 million. Its core mechanism uses an x(3,3) model, where users can stake $SHADOW to mint Shadow, obtaining governance voting rights and a share of trading fees. At its peak, APR reached 5500%. Where there’s yield, there’s participation: a “gold rush effect” + Sonic’s known airdrop hype drew a large crowd of veteran DeFi yield farmers.

Let’s focus on what x(3,3) is and try to understand this flywheel model.

Introduction to the x(3,3) Model

• Three-token model:

  • $SHADOW token: Provides immediate liquidity for “agile traders” looking for short-term market opportunities. No lock-up period, highly flexible.

  • xSHADOW token: Obtained by staking $SHADOW, suitable for long-term investors. It grants voting rights and 100% of protocol fees. If you exit early, there’s a 50% penalty (which is then rewarded to other xSHADOW holders). Users can also choose a vesting exit: after 15 days, they can redeem at a 1:0.5 ratio, or after 6 months, at 1:1, with a 14-day cancellation window.

  • x33 token: Converts xSHADOW into x33, letting users benefit from auto-compounding returns while maintaining liquidity. After each epoch, x33 yields automatically compound, and users can still trade x33 (e.g., in an x33/SHADOW or x33/USDC pair). This particularly appeals to those wanting to accumulate long-term yields without fully locking up their assets.

• Difference from the traditional ve(3,3) model
  Unlike Solidly’s ve(3,3) model which generally requires lengthy lock-ups (often up to a year), restricting liquidity and flexibility, Shadow’s x(3,3) model offers multiple liquidity options. Converting xSHADOW into $x33 retains the benefits of long-term staking and governance while keeping the token tradable, offering more flexibility if needed.

The Flywheel Model

Here’s a quote from a March 6 tweet by a KOL:

Fundamentals Cycle: The Positive Loop Between X33 and Fee Monetization

Holding X33 -> Earn double passive points + quadruple active points -> Exchange for S tokens (pool of 200M for airdrop)

S token appreciates -> X33 conversion ratio rises (currently 1:1.28) -> X33 price is protected + returns are magnified

At the same time, Fee Monetization (90% of fees returned to developers) -> More dApps get built -> Trading volume surges -> S token reserves grow (currently 900K tokens, ~$500K in value)

Market Sentiment Cycle: The Shadow Exchange Community Hype

Daily fees on Shadow Exchange are $220K -> Ranked #7 globally, possibly overtaking PancakeSwap -> Community confidence is high

Community frenzy -> More trading -> Shadow’s TVL up by 105% -> Positive feedback for the ecosystem

A side note: Sonic has a well-known airdrop planned for June 2025. Users can earn passive points by holding assets or actively participate in DeFi and gaming tasks to earn active points. The expectation of a known upcoming airdrop has drawn many users into Sonic, and Shadow has successfully harnessed this influx of traffic.

Interestingly, the argument in that tweet, viewed on March 11, now seems contradictory. The price of $S has fallen by 2.8% today, while $SHADOW is up 17.3%, and $x33 is up 25.9%.

(For comparison: ETH is down 7.17%, BEAR down 3.48%, HYPE down 5.56%.)

We can interpret this in two ways:

1. The community’s recognition of the project is high, so during a market downturn, they choose “safe haven assets” within the same ecosystem.

2. Investors are selling S to buy SHADOW/x33, effectively taking a leveraged position on the Sonic ecosystem to bet on both the airdrop upside and potential token appreciation—“killing two birds with one stone.”

Recommended Strategy

• Conservative approach: Deposit into the S/stS LP pool -> Earn 118% APY + hedge with a 1x short on Hyperliquid -> Lock in a 10–13% yield & qualify for Sonic airdrop points

• Why I do not currently recommend buying SHADOW & x33:

  1. They are negatively correlated with the S token price at present, which goes against the flywheel theory. If S depreciates, that reduces the perceived value of the airdrop, discouraging new entrants. Theoretically, if S falls, SHADOW and x33 should follow suit.

  2. SHADOW has dropped 2x from its peak, and the volatility is significant—too high a risk for now.

III. Overview of Ecosystem Projects

Spot DEX

Lending & Yield

GameFi

Meme Coins

NFTs

Marketplace: PaintSwap Sonic

Airdrop Expectations

1. Amount: 190,500,000 $S, about 6% of the current total supply.

2. Date: June 2025.

3. Scope: The airdrop will reward various participants, including:

   • Historical participants: historical activities on Opera, participants in Sonic Arcade, and those who minted the exclusive Shard NFTs.

   • Users and project teams on the Sonic chain.

4. Participation Methods:

   • Sonic Points

     • Passive Points (PP) by holding whitelisted assets

     • Active Points (AP) by engaging with whitelisted apps

   • Sonic GEM

     • Can be directly converted into liquid $S; used by SONIC to reward ecosystem applications

     • Retail users can earn them through ecosystem projects, which distribute Gems to their users

IV. Current Situation and Reflections

Since launching in late 2024, Sonic has seen significant TVL growth (now at $665M) and close to 860K active addresses. Daily DEX trading volume exceeds $314M. These numbers illustrate the surge of attention flowing into Sonic.

But let’s step back: what underpins these “prosperous” figures?

In the author’s opinion:

• Developer Incentives: FeeM and the Innovator Fund offer direct economic benefits, attracting developers to build active dApps—a phenomenon reminiscent of the 2020 DeFi Summer yield farming craze.

• Capital Inflows: TVL has risen from $27M to several hundred million, indicating capital confidence in Sonic, much like in 2020 when funds poured into Compound and Aave.

• Community-Driven: Meme frenzy and airdrop activities have rekindled that retail enthusiasm from DeFi Summer. Projects like $SHADOW and $EGGS evoke memories of early-stage breakouts like YFI and SUSHI.

• Leadership: The return of Andre Cronje—legendary in DeFi—brings a “god-tier project” aura to Sonic, just like the hype around DeFi in 2020.

• Technical Strength: With 10,000 TPS, <1s confirmation times, and gas fees under $0.01, Sonic matches Solana’s performance, beating Ethereum (~20 TPS) and BSC (~100–200 TPS). This suits high-frequency DeFi and GameFi use cases. A built-in native cross-chain bridge also reduces reliance on third parties, lowering cross-chain costs and security risks.

What are Sonic’s current limitations or potential challenges?

• Market Environment: The overall crypto market in 2025 is in a slump; BTC and ETH volatility may suppress the performance of altcoins like $S. The original DeFi Summer was fueled by a bull market.

• Ecosystem Maturity: Despite rapid growth, Sonic’s ecosystem (around 65 dApps) is still smaller compared to Ethereum (thousands) or Solana (hundreds). It lacks a standout “killer app.”

• Speculative Risk: High-yield opportunities and meme mania can lead to bubbles, similar to TON’s “short-lived boom and subsequent pullback.”

• Competition: Solana, Base, Aptos, and other high-performance chains already hold market share. Sonic must quickly differentiate and claim user mindshare.

• Token Economics: A 1.5% annual inflation rate and a total circulation of 2.88 billion tokens by year-end could create sell pressure and erode long-term confidence.

Currently, most plays seem like upgraded versions of old DeFi narratives. Whether Sonic can truly spark another “DeFi Summer” will hinge on whether it can incubate projects on par with Uniswap or Aave, maintain technical stability, and foster user loyalty. Additionally, June 2025 is a key time—after the official airdrop, how much of the hype will fade, and how many users will stick around? The May–June period also sees the launch of AC’s own project, flyingtulip, which might be a make-or-break moment, potentially creating the next DeFi legend. Let’s wait and see.