The "Flywheel Effect" Miracle in the Cryptocurrency Field: Sonic - How to Achieve a Comeback through 190 Million Airdrops and the FeeM Model

Author: @arndxt_xo

Among numerous blockchain projects, "Sonic" is the most underrated contender. While Sei, Berachain, and Monad are still in the testnet phase, Sonic has already launched, boasting over 80 years of operational funding reserves, rapidly accumulating TVL (Total Value Locked), and rewarding developers in ways never attempted by other chains.

Sonic features "10,000+ TPS" (transactions per second), "sub-second finality," and a unique "FeeM model" (returning 90% of gas fees to developers), building a DeFi flywheel effect. Additionally, Sonic has launched a "$190 million" airdrop plan, attracting a large number of DeFi developers and yield farmers.

This article will delve into Sonic's background, technical advantages, tokenomics, and how to achieve up to "145,000% APY (Annual Percentage Yield)" through participation in the ecosystem.

1. Background and Origin

By the end of 2024, Fantom officially rebranded to "@SonicLabs," returning to the Layer-1 (L1) battlefield, focusing on speed, ecosystem incentives, and cross-chain interoperability. Within just a few months, Sonic's TVL rapidly grew, with numerous new protocols choosing to launch on its chain. Even more notably, Sonic is about to launch a "190 million $S token airdrop," a catalyst that has attracted many DeFi developers and yield farmers.

What Makes Sonic Unique

• Already live and operational: Sonic has processed real transactions, has real liquidity and users, while Sei, Berachain, and Monad are still in the testnet phase.
• Developer-friendly: Through the FeeM model, Sonic returns 90% of gas fees to dApp developers, incentivizing them to build high-usage applications.
• Massive airdrop: 190 million $S tokens will be airdropped to users, rewarding activities such as staking, providing liquidity (LP), and participating in ecosystem events.
• Improvements on DeFi best practices: Sonic adopts and enhances the ve(3,3) model while integrating cutting-edge EVM scaling technologies.

2. DeFi Flywheel Effect

The core of the DeFi flywheel effect lies in the time mismatch between capital deployment and value realization:

1. Liquidity enters → Price rises → More users flock in.
2. Early participants receive rewards → More users join → Ecosystem growth kicks off.
3. New participants hold, stake, or reinvest → The flywheel keeps spinning.

In 2022, heavyweight figure Andre Cronje (founder of Yearn Finance) introduced the "ve(3,3) model" through the Solidly exchange on Fantom. This model combines Curve Finance's veToken mechanism and Olympus DAO's (3,3) game theory, aiming to reduce sell pressure and reward liquidity providers through long-term token locking.

However, the flywheel effect is not perpetual. When liquidity growth slows and early participants begin to exit, the flywheel effect weakens. Sonic's emergence is precisely to address this issue.

3. Sonic's Technical Advantages

1. Speed

• High throughput: 10,000+ TPS, suitable for large-scale DeFi and GameFi applications.
• Parallel execution: Through a leaderless sBFT consensus mechanism, Sonic can process transactions in parallel, enhancing speed while maintaining security.
• Dynamic gas model: Automatically adjusts gas fees based on demand, ensuring low fees in high-traffic scenarios.

2. Interoperability

• Sonic Gateway: A native cross-chain bridge that does not rely on third parties, reducing centralization risks.
• Fault recovery system: Users can still recover assets even if the network or bridge goes offline.
• 1:1 asset support: Cross-chain assets do not need to be wrapped, maintaining their native value directly.

3. Incentive Mechanism

• FeeM model: Developers receive 90% of transaction fees, incentivizing the creation of high-usage dApps.
• 200M $S airdrop: Distributed through the Sonic Innovator Fund, users earn airdrops by participating in ecosystem activities (such as providing liquidity, governance).

4. Smart Contracts

• Sonic Virtual Machine (SVM): Optimized for Ethereum smart contract execution, reducing gas fees.
• Custom gas tokens: dApps can use their own tokens to pay gas fees, enhancing user experience.

4. Tokenomics and Airdrop Mechanism

$S is the native token of the Sonic network, with the following functions:

• Transaction fees: Used to pay gas fees.
• Validator operations: Running validation nodes requires $S.
• Staking: Users can earn rewards by staking $S.
• Governance: Token holders can participate in protocol governance.

Inflation and Burn Mechanism

• Linear inflation model: An annual inflation rate of 1.5% for 6 years, aimed at ecosystem development.
• Burn mechanism: Unused inflation tokens will be burned, ensuring controllability of token supply.

190 million $S Airdrop (June 2025)

• Purpose: Attract new users, reward early participants, stimulate DeFi usage.
• Points system: Users earn points by holding assets and participating in dApp activities (such as providing liquidity, lending).
• Vesting period: 25% of the airdrop can be claimed immediately, with the remaining portion gradually released over 9 months.

5. Ecosystem and DeFi Protocols

A number of leading DeFi projects have emerged in the Sonic ecosystem:

Shadow on Sonic: A concentrated liquidity DEX using the x(3,3) model, with a TVL exceeding $100 million.

Stout: A lending protocol that collaborates with stable assets like scUSD.

Boom Sonic: A perpetual contract DEX focusing on advanced trading features.

Snake, EGGS, Vicuna Finance: Offering high APR liquidity mining and lending opportunities.

6. Yield Opportunities

Sonic provides rich yield opportunities for DeFi farmers:

• High APR DEX mining: For trading pairs like S/USDC.e or USDC.e/EGGS, APR can exceed 1000%.
• Lending and liquidity staking: Stake $S through MySonic or third-party LSD providers to earn 5-8% APR.
• Airdrop multipliers: Further enhance airdrop points through protocol-specific GEMS rewards.

7. Comparison with Other L1s

Sonic holds a significant first-mover advantage among the next-generation high-speed EVM L1s. While competitors are still in the testnet phase, Sonic has already attracted real liquidity and users. Its high throughput, sub-second finality, and developer incentive mechanisms position it well in the future of multi-chain DeFi.

8. Conclusion and Outlook

Sonic aims to replicate and surpass Fantom's success through high throughput, developer incentives, and secure cross-chain bridging. In the short term, Sonic has the upper hand in competition due to its real-time usage, fresh liquidity, and parallel EVM execution advantages. However, the sustainability post the June 2025 airdrop remains its biggest challenge. If user activity and developer confidence can be maintained, Sonic is poised to occupy a significant position in the multi-chain future of DeFi.