Sonic SVM, the leading chain-extension Virtual Machine (SVM) on the Solana network, today unveiled a major upgrade to its SONIC tokenomics. It is swapping its traditional burn model for a more efficient buy-and-lock mechanism. This new mechanism will bolster long-term value for users and deepen alignment with Solana’s ecosystem.
Under the new structure, half of all transaction fees will now be redirected to open-market purchases of $SONIC. These were previously sent directly to the burn address. Those tokens will be stashed in a dedicated vault under a 24-month linear vesting schedule. By creating steady buy pressure and gradually withdrawing tokens from circulation, Sonic SVM aims to generate lasting scarcity and build up protocol-owned liquidity.
Chris Zhu, CEO at Sonic SVM, said, “This redesigned mechanism represents a fundamental shift in how we think about long-term token value. Rather than simply burning tokens, we’re implementing a strategic approach that creates strategic demand while building protocol-owned liquidity. This supports our growing ecosystem of games and applications while rewarding our community of token holders.”
From Burn to Buy-and-Lock Strategy
Previously, 100% of transaction fees in SONIC were burned, a straightforward deflationary tactic. The new model splits fees 50/50: half continues to be burned, while the other half is allocated to market purchases. These purchases not only underpin the token’s price floor but, through the 24-month vesting, ensure the network benefits from a predictable and sustainable reduction in circulating supply.
Deepening Liquidity with Rewards
In addition to overhauling the burn mechanic, Sonic SVM has innovated around its SONIC fee stream. It will be 12.5% of total transaction fees, and it is achieved by introducing a novel staking-and-pairing model:
- SOL Staking: All SOL coins received as SONIC fees will be staked on the Solana mainnet, generating on-chain rewards.
- Token Pairing: Staking rewards in SOL will be paired with newly vested SONIC tokens every month. This will form new liquidity pools on Sonic SVM Mainnet.
- Incentivized Liquidity Provision: Liquidity providers will earn additional SONIC rewards for supporting these pools.
Over time, this layered design will make SONIC more accessible and tradable. It will not only reinforce token liquidity but also tie the protocol’s growth directly to Solana’s network health. This will result in symbiotic value for both SOL and SONIC holders.
Alan Zhu, co-founder and CPO of Sonic, said, “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. The more the network is used, the stronger the buy pressure and deeper the liquidity becomes.”
Community and Ecosystem Benefits
According to Sonic SVM, the upgraded tokenomics will deliver multiple advantages:
- Sustained Token Value: Regular market buys combined with locked-up tokens shrink the floating supply.
- Protocol-Owned Liquidity: By owning and managing its own liquidity pools, the protocol gets more resilience against sudden market shifts.
- Solana Alignment: SOL staking shows Sonic SVM’s commitment to the Solana ecosystem. It improves network security and decentralization.
- User Incentives: More incentives for liquidity providers will drive engagement and organic growth.
As per the Sonic team, the new mechanism will roll out in the coming weeks. The full technical documentation is accessible via the Sonic SVM website. Sonic SVM is the first chain-extension SVM built on the HSSN network. It offers a programmable attention-settlement layer designed to validate attention-based transactions at the consensus level.
It also grants granular on-chain access to user activity across decentralized applications. The Sonic SVM provides composable primitives that eliminate the need for individual projects to engineer bespoke attention infrastructure. By marrying advanced tokenomics with scalable performance, Sonic SVM aims to become the backbone for attention-driven Web3 games and social experiences.
