Sonic SVM, the first Solana Virtual Machine (SVM) chain extension on the Solana network, is overhauling its tokenomics to introduce a sustainable value accrual mechanism for its native token, $SONIC. The update replaces traditional token burns with a market-driven buy-and-lock strategy designed to enhance long-term token value, liquidity depth, and alignment with the Solana ecosystem.
Protocol-Owned Demand Replaces Token Burns
The core of Sonic SVM’s new tokenomics model centers around redirecting transaction fees to create sustained buying pressure. Rather than burning tokens, 50% of all fees collected on the network will now be used to purchase $SONIC from the open market. These tokens will then be locked in a dedicated vault and distributed through a 24-month linear vesting schedule.
"This redesigned mechanism represents a fundamental shift in how we think about long-term token value," said Chris Zhu, CEO at Sonic SVM. "Rather than simply burning tokens, we're implementing a strategic approach that creates strategic demand while building protocol-owned liquidity."
The buy-and-lock system is engineered to tighten the token’s supply while maintaining constant demand, thus fostering a more stable and value-driven market dynamic for $SONIC holders.
Unlocking Deeper Liquidity Through SOL Staking
Sonic SVM is also revamping its liquidity provisioning model by repurposing a portion of transaction fees. Specifically, 12.5% of total transaction fees—collected as SOL—will be staked on the Solana mainnet. The staking rewards, combined with vested $SONIC tokens, will be used to seed new liquidity pools on Sonic SVM’s mainnet.
These LPs will be incentivized further to boost engagement and market activity. According to Sonic, this dual-token LP approach not only ensures deeper liquidity but also strengthens the protocol’s integration with Solana’s core infrastructure.
Key Benefits for the Ecosystem
The redesigned value accrual mechanism is poised to deliver several ecosystem-wide advantages:
Reduced Circulating Supply: Continuous market buys and vault-based locking decrease token availability.
Enhanced Liquidity: Protocol-owned liquidity makes $SONIC more accessible and reduces reliance on external market makers.
Solana Ecosystem Integration: By staking SOL and utilizing rewards within $SONIC LPs, the mechanism directly ties $SONIC growth to Solana’s success.
Improved User Incentives: Additional rewards for LPs aim to drive greater participation in network activities.
"As we continue scaling our infrastructure to support millions of users across our gaming and social platforms, this value accrual mechanism ensures our token economy grows in tandem with network usage," said Alan Zhu, co-founder and CPO of Sonic.
Implementation Timeline
The new tokenomics model will roll out in the coming weeks. Full technical documentation will be made available via the official Sonic SVM website. This initiative marks a strategic step in Sonic SVM’s roadmap as it continues to evolve as a programmable attention settlement layer on the Solana blockchain.
