Is it a new bottle for old wine, or a true innovation?
In the current cryptocurrency market, as the Meme craze fades, many investors find themselves confused.
Sonic—this new public chain led by Fantom founder Andre Cronje (AC)—is rising to become a new focus in the DeFi field.
With comprehensive performance upgrades, a 6% airdrop incentive, and AC's high involvement in ecosystem development, Sonic not only attracts a large number of entrepreneurs but also reignites the market's expectations and enthusiasm for DeFi.
However, reflecting on AC's sudden departure from Fantom, the market is filled with doubts about Sonic's future.
Is it a new bottle for old wine, or a true innovation? Let us follow the perspectives of well-known DeFi KOL Chen Mo (@cmdefi) and researcher Da Pang Dun (@DaPangDunCrypto) to delve into Sonic's potential and future. Can Sonic's rise become a breakthrough for DeFi and lead it to create another glorious cycle?
The following content is a整理稿 of our conversation, with the podcast audio version also launched simultaneously:
Xiaoyuzhou link:
https://www.xiaoyuzhoufm.com/episode/67cc4aad0766616acd85c5d9
Spotify link:
https://open.spotify.com/episode/2CBKjBOyNhkYKpImohvRSP?si=DeUjwfUORwexH2TQIRn1-g
Deep Tide TechFlow: First, please introduce yourselves.
Da Pang Dun:
Hello everyone, I am Da Pang Dun. I entered this industry in the last cycle and went all in on crypto from this cycle. I usually do some research, whether it's yield farming, Memes, or various ecosystems I like, I participate in them.
Chen Mo:
Hello everyone, I am Chen Mo. I have been doing research and investment related to DeFi since 2020. I participated in the Fantom ecosystem in the last cycle and have a certain affection for founder Andre Cronje (AC), so I am very happy to see Sonic's impressive performance after its launch.
Deep Tide TechFlow: Teacher Chen Mo was in the Fantom ecosystem in the last cycle. What do you think are the differences between Fantom back then and Sonic now?
Chen Mo:
Sonic's upgrade this time is mainly reflected in performance. The most intuitive feeling is that it is faster, has higher TPS, and has certain parallel execution capabilities. Of course, users may have a weaker perception of technical changes.
From the user's perspective, the most intuitive feeling is that AC's participation is higher than in the last cycle. Although the presence of AI and Memes has weakened the scale of the DeFi sector, and AC is not as "famous" as in the last cycle, he has stepped into the spotlight and become the one building the platform. The current AC has no idol burden; he is more willing to participate and promote projects within the ecosystem. This reminds me of the Solana Foundation, which also leads everyone to move forward together. This kind of traction is Sonic's advantage.
Therefore, I am looking forward to a project that can break the mold in this not-so-strong DeFi cycle, allowing everyone to understand and participate in DeFi.
Deep Tide TechFlow: Da Pang Dun only joined this cycle. I saw you posted a research piece on Sonic a couple of days ago, pointing out that it is still in a relatively early stage. Please share your views.
Da Pang Dun:
I had previously focused mainly on the BTC ecosystem and then on Memes on Solana. Why did I suddenly pay attention to Sonic? I believe there is currently a narrative gap. Many people suddenly feel lost after the AI wave—not that AI is not viable, but in this cycle, the AI narrative seems to have been debunked; meanwhile, Memes have been scared off after a series of events. Everyone has become very confused.
However, there must be narratives in the circle. At this time, I saw Sonic, which seems to open the door to a new world for newcomers like me in DeFi. It is different from the first and second tiers, with many things needing calculation. The opportunities in DeFi are not as "brutal" as Memes, but their lifecycle is also not as short as Memes. DeFi has mature models, and its stability is exactly what I need.
Secondly, it is because of Andre Cronje. Perhaps because I did not participate in the Fantom ecosystem, I do not have the concerns brought by "AC's departure." He feels to me like Solana's Toly, a marketer for the ecosystem. Regardless of whether the project is good or bad, as long as it has value, he will repost it. In the current narrative gap, the market lacks people like AC who can stir things up. Plus, Sonic Labs is also quite active, and Sonic Network has undergone significant upgrades, which makes me even less willing to miss out on this ecosystem.
**Deep Tide TechFlow: Let me summarize, the reasons you are optimistic about Sonic are: there is currently a narrative gap; *DeFi* is a long-termism matter; and AC is willing to step forward to build the ecosystem. I want to extend the question: there is no shortage of public chains with DeFi ecosystems now, why do you pay more attention to Sonic?**
Da Pang Dun:
First of all, Sonic is a new public chain with a large profit space. Secondly, to develop more quickly, Sonic has promised about a 6% airdrop—this is an opportunity that is hard to find in many mature DeFi ecosystems. In addition, Sonic's institutional participation is very low, giving it a more grassroots and entrepreneurial feel.
**Deep Tide TechFlow: Berachain just launched PoL recently, which is very important for them; and several recent *VC* coins have been quite strong—whether it's $KAITO, $IP or $BERA. Berachain's characteristic is also DeFi, so I would like to ask you to talk about how you view Berachain and Sonic from a DeFi perspective?**
Chen Mo:
I have participated in both ecosystems. In comparison, I think Sonic has more opportunities. Sonic is bottom-up, while Berachain has huge financing and institutional support, with many projects collaborating with the official. Their styles are different. Sonic is more friendly to small and medium-sized entrepreneurs, and AC is very willing to help projects that eliminate RUG risks.
Moreover, Berachain obtains points through staking, while Sonic uses liquidity mining—which provides a greater sense of participation for retail investors. The increase in TVL will bring higher fees and rewards, and the coin price will rise accordingly, which in turn will drive up TVL—this kind of positive spiral can give people a sense of growing together with the project. Just like the currently popular Shadow, its TVL has also been gradually increasing. Projects driven by points need to deposit money first and then get a return at TGE. Many people will keep an eye on TGE, calculating how much the coin price needs to reach to profit, which diminishes the sense of achievement of growing together with the project. This is a contrasting relationship. Points projects are more suitable for those with a certain amount of capital to pursue more stable returns; while Sonic, relatively speaking, has greater alpha opportunities. I prefer a format like Sonic. You could say it’s retro, but I think that’s exactly what is lacking now. Everyone is very restless, only seeing profits, but ignoring the process of growing together with the project.
Additionally, liquidity mining is often criticized for being unsustainable, which is a problem that all current mechanisms cannot solve. But the experience Sonic provides to users is different.
Deep Tide TechFlow: You mentioned earlier that Sonic is undergoing a technical upgrade. I would like to ask you to elaborate on the (3,3) mechanism and how Sonic's (3,3) in this round differs from the previous Fantom's (3,3)?
Chen Mo:
The original (3,3) comes from OHM (OlympusDAO), and the earliest mechanism was very simple: if both people hold, it is a balanced state (1,1); if both stake, it is a positive energy state (3,3); and if both sell, it is a downward state (-3,-3)—this is game theory.
AC combined the veToken model with the (3,3) model to create ve(3,3). ve(3,3) allows users to use voting rights to decide how liquidity incentives are distributed to which pool, while voters can also earn real returns such as fees from the supported pools.
Shadow's x(3,3) can be considered an optimized version of ve(3,3). The original veToken was difficult to circulate; once locked, you had to be friends with the project for a long time. x(3,3) allows users to exit midway but requires giving up 50% of the profits to those who do not exit. This is a significant change, providing an exit method for those who want to exit urgently while doubling the rewards for those still in the ecosystem.
Deep Tide TechFlow: These changes seem to explain more why Shadow is outstanding, but now the entire Sonic ecosystem is performing brilliantly. Is it because Shadow has sparked everyone's enthusiasm, or is it due to the inherent value of $S itself? Are there other innovative projects in the Sonic ecosystem?
Chen Mo:
The Sonic ecosystem has more micro-innovations like Shadow. From the TVL, we can see that a lot of funds have flowed into the Sonic ecosystem. Many projects that have not succeeded in other ecosystems have joined Sonic due to subsidies, bringing liquidity. In fact, this way of buying users with real money is similar to early DeFi, because DeFi is too inactive in this cycle, so many mechanisms feel somewhat unfamiliar.
Overall, when there are many token incentives and subsidies on Sonic, its TVL will definitely rise. If we talk about innovation, I think Shadow is relatively the best.
Da Pang Dun:
Currently, Shadow is unique. For many in the Sonic ecosystem, the goal is the 6% airdrop. This airdrop targets both ordinary users and project teams. However, many project teams have distributed these airdrops to users, allowing users to effectively receive two airdrops, which has also motivated everyone.
The second point is, as Chen Mo mentioned, many people have not previously engaged with DeFi. In the current narrative gap, DeFi has reignited many people's enthusiasm for research.
The third point I am considering is, what kind of blueprint does AC want to build? All DeFi projects face a question: what happens in the end? Are there other solutions besides the above? For traditional finance, the yield of DeFi is very high. We can see that Sonic is developing products like abstract wallets and games, and AC has also expressed a willingness to operate under U.S. regulations. So I wonder if AC's goal is to transition DeFi to web2—in web3, users are more willing to try GameFi rather than just games, with profit generation being the primary concern.
**Deep Tide TechFlow: This leads us to the next topic. Everyone playing Sonic must feel there is still profit potential. I want to know how you view metrics like market cap/TVL, or at what stage of *ve*(3,3) should we be cautious? What should we pay attention to during **TGE?
Chen Mo:
In Sonic, I focus more on DeFi—this is Sonic's biggest advantage. Just as Solana's advantage lies in Memes, as long as Memes are done well, Solana will not perform poorly. Sonic's current style is somewhat reminiscent of early Solana, with the airdrop serving as a hook. As for Sonic's upper limit, I believe it still depends on the subsequent momentum of DeFi.
ve(3,3) is different from (3,3); unless the entire Sonic ecosystem's trading volume rapidly shrinks, theoretically, it has no risk of collapse—this is not an easy task under incentivized conditions. As for the points model, I personally feel it is difficult to break out because it has already overdrawn everyone's enthusiasm at TGE. In contrast, Sonic has continued the slow growth approach of Fantom, and I believe that under this model, it is very likely to produce one or two projects like OlympusDAO or Luna.
In short, there must be something that breaks out—when you think of Memes, you think of Solana; when you think of DeFi, you first look for opportunities in Sonic. If it can be like this, it will be very successful. Moreover, AC's strongest field is DeFi, and many of the mechanism designs and the ve(3,3) model were proposed by him first. I am looking forward to AC finding what the current era needs; if so, Sonic's upper limit will be very high.
Deep Tide TechFlow: Speaking of breakout projects, there is a recent project called Super.exchange that many people consider to be a breakout project. Have you two participated in this project?
Da Pang Dun:
I played with Super.exchange quite early on, and my biggest takeaway is that understanding the logic behind this type of project is very important. The model of Super.exchange relies on repurchasing and burning tokens through DEX trading fees, a mechanism similar to "trading mining." The funds for repurchase and destruction mainly come from external trading volume, so external trading volume must remain high; otherwise, the repurchase amount will decrease, making it difficult for the token price to rise. However, there are two key issues with external trading:
Although nearly 60% of the total token supply has been burned, the external market still calculates FDV based on the initial total of 1 billion, leading ordinary retail investors to mistakenly believe that FDV is too high and be unwilling to take over.
The liquidity pool in the external market is created by users themselves, and the project team cannot prevent this.
Additionally, early investors may achieve high returns, but due to market sentiment fluctuations and declining external trading volume, actual returns may fall far below expectations. The current key is whether external trading volume can continue to grow; otherwise, the repurchase and destruction mechanism will struggle to drive up the token price, making it difficult for the project to maintain long-term development. Many people do not understand this mechanism and may end up losing money.
Regarding the DeFi risk signals mentioned earlier, I would also like to ask Teacher Chen Mo: every DeFi project has a flywheel; for example, sometimes trading volume is a key factor for the flywheel. How should I look for these key factors? When these data show problems, should I be alerted?
Chen Mo:
My personal understanding is that such absolute points do not exist. For some projects with flywheel mechanisms, there is definitely a point to start the flywheel; if the incremental growth slows down or declines at this point, it is relatively dangerous. In the past, during the OHM era, a stopped flywheel could potentially restart. However, in the current cycle, people's attention is too scattered; after the flywheel stops, there are many other things to play with. Secondly, there is a lack of real demand to start the flywheel. In a DeFi bull market, a large demand for liquidity is the ignition point for the flywheel, but now very few project teams will create a large pool on-chain, and the presence of DEX has become very low.
Deep Tide TechFlow: Earlier, you mentioned that AC has taken some compliance actions in the U.S., and Daniele's Hey Anon also had a wave of popularity before. Besides DeFi, what other sectors or projects in the Sonic ecosystem do you think are promising?**
Da Pang Dun:
My capital size is not large, so I sometimes look for higher odds plays. My participation methods mainly include three:
Finding new projects to seek alpha opportunities, but I need to be cautious of RUG risks. When AC forwards projects, he also mentions that he does not know how the project will perform next.
I will look at NFTs. Many people now like equity NFTs, which have strong social promotion attributes; each NFT has its own design and suffix. You can imagine a X Space filled with Derps avatars; it would be a stunning scene. Moreover, images are easier to leave an impression and have a stronger cultural attribute. Project teams will also offer discounts for these NFTs; my initial $Shadow was actually airdropped to me by the Derps project team.
Stable returns. I do not choose stablecoin LPs that require large capital; instead, I look for opportunities by anchoring assets to $S.
Deep Tide TechFlow: I also received the $Shadow airdrop through Derps, and I feel that the NFTs on Sonic have a bit of DeFi gameplay—they initially had tokens, which could later be used to buy snacks to feed Derps, and then they could also be used to decorate rooms; similar projects include Berps, etc. They are not purely NFT projects.
Da Pang Dun:
Yes, the NFTs in the Sonic ecosystem all carry a bit of DeFi attributes. Just as Teacher Chen Mo said, if the first thing that comes to mind when talking about DeFi is Sonic, then it has succeeded. In the Sonic ecosystem, pure Memes are hard to do; everything will carry some DeFi characteristics; otherwise, it will be difficult to gain recognition in this circle.
Deep Tide TechFlow: I believe that after this baptism, people will no longer be interested in purely Meme projects; there must be something else to make them buy in. Teacher Chen Mo, do you think there are other promising sectors in the Sonic ecosystem besides DeFi?
Chen Mo: I am also paying attention to Daniele's ANON, and before Sonic's recent rise, there was actually a wave he initiated. I am mainly focused on things around DeFi, including DeFAI. Other than new projects, there may not be many significant advantages.
Deep Tide TechFlow: Currently, the only DeFAI project I know of on Sonic is Hey Anon. Another similar project is Allora on Polychain, which has not issued tokens and mainly provides infrastructure for AI.**
Chen Mo:
Yes, but Hey Anon has not yet reached a level that can break out. However, we can still look forward to more opportunities appearing later, as Daniele was quite capable of stirring things up in the last cycle.
Deep Tide TechFlow: Recently, Binance's "DeFi + AI" research has frequently mentioned Hey Anon, so it seems that more and more people are paying attention to it.
Earlier, both of you mentioned that DeFi is Sonic's calling card, but recently, people's attention towards Sonic seems to have shifted to performance. Does Sonic have a unique competitive advantage in terms of performance? Will the launch of emerging public chains like Monad impact Sonic?
Da Pang Dun:
Monad is very popular, having gained 4 million active users just a few days after its launch. However, I believe AC's point about final confirmation is valid; users do not care about a single metric but are more concerned about how long it takes to see results after initiating a transaction. Sonic provides a great user experience.
Public chains like Arbitrum and Monad are also very fast; everyone has been optimizing technology for a long time, and there is no clear distinction between which is better. Today's public chains are not like Ethereum, which can do everything; I believe public chains should become application chains, focusing on doing one function well, with the chain merely being a carrier. Sonic needs to find its own direction; today's DeFi is different from the past and cannot make people feel that Sonic's DeFi is outdated. Performance is just the foundation; what applications it leads to is the key to the future.
Chen Mo:
We are no longer in an era where TPS reigns supreme. In the ancient web3 era, there was little ecosystem, so everyone focused on TPS. However, after so many years of development, the market has already provided solutions for performance—either offloading performance like Ethereum L2 or doing parallel processing like Solana. There is no insurmountable gap in performance now; having a competitive ecosystem is the key to success.
Deep Tide TechFlow: Due to time constraints, we will conclude our discussion here today. Thank you both for your time, and I look forward to Sonic developing better, attracting more users to DeFi, and driving the entire ecosystem forward.
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