Sonic SVM Introduces SONIC Burn Program To Enhance Token Value Accrual Mechanism
In Brief
Sonic SVM introduced a revised SONIC tokenomics model, replacing the prior token-burning approach with a new buy-and-lock system aimed at promoting sustainable value accumulation.
Solana Virtual Machine (SVM) chain extension Sonic SVM introduced a revised tokenomics model for its SONIC token, replacing the prior token-burning approach with a new buy-and-lock system aimed at promoting sustainable value accumulation. Instead of permanently destroying 50% of transaction fees, the updated model reallocates these funds to repurchase SONIC tokens directly from the open market.
The acquired tokens are then secured in a dedicated vault, where they are gradually released over a 24-month linear vesting period. This mechanism is designed to apply consistent buying pressure, limit the token’s immediate availability, and align long-term incentives within the Solana ecosystem, offering a more strategic approach to value creation than the earlier deflationary model.
“This redesigned mechanism represents a fundamental shift in how we think about long-term token value,” said Chris Zhu, CEO at Sonic SVM, in a written statement. “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,” he added.
The updated mechanism also introduces a new approach to SONIC fees, which account for 12.5% of total transaction fees. SOL collected as SONIC fees will be staked on the Solana mainnet. Staking rewards will be paired with monthly vested SONIC tokens, and these pairs will be used to form liquidity pools on the Sonic SVM Mainnet. Liquidity providers on the Sonic SVM Mainnet will receive additional incentives. This structure is intended to build deeper SONIC liquidity over time while aligning the token’s development with the overall health of the Solana network, creating potential benefits for both SONIC and SOL holders.
Community And Ecosystem Benefits
The redesigned mechanism offers several advantages to the Sonic SVM ecosystem. Continuous market purchases and locked tokens support long-term token value by decreasing the circulating supply. Protocol-owned liquidity helps make SONIC more accessible and tradable. Staking SOL further demonstrates Sonic SVM’s alignment with the Solana ecosystem, and increased incentives for liquidity providers aim to drive greater user participation.
“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, in a written statement. “The more the network is used, the stronger the buy pressure and deeper the liquidity becomes,” he added.
The updated system is scheduled to launch in the near future, with comprehensive documentation to be published soon.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
