Sonic Labs has received community approval for the proposed issuance of $200 million in S Token to accelerate its entry into the U.S. Capital Market and ETF plans | Sonic Today's News

The blockchain project Sonic Labs (formerly Fantom) passed a governance proposal on Sunday with almost unanimous votes, approving the issuance of a native S token worth $200 million to accelerate its entry into the U.S. traditional capital markets. The plan includes investing $100 million to support NASDAQ-listed PIPE (Post-IPO Private Equity) instruments, $50 million to support exchange-traded products (ETP) tracking the S token, and establishing a U.S. entity, Sonic USA LLC, to promote Compliance and cooperation. At the same time, the project will reform the Gas fee mechanism and increase the token burning rate to offset the inflationary pressure caused by new issuances. This strategic transformation aims to break the limitations of the original 2018 token economic model and provide funding ammunition for competing in the traditional financial market.

Community vote passed with a high approval rate of 99.99%, Sonic authorized to issue 200 million S Tokens

The "U.S. Expansion and TradFi Adoption" governance proposal initiated by Sonic Labs on August 20 was approved last Sunday night, with 99.99% of participating wallets supporting the plan, and over 700 million S tokens participating in the vote, meeting the quorum requirement. According to the proposal, Sonic will issue S tokens worth $150 million (approximately $200 million at current prices) to promote its U.S. Capital Market strategy. Additionally, the project will issue an extra 150 million S tokens (worth approximately $47.7 million) specifically for the operation of the newly established U.S. entity Sonic USA LLC, meaning the total issuance will reach $200 million.

100 million USD layout for Nasdaq PIPE tools, 50 million USD support for S Token ETP

In terms of specific fund usage, $100 million in S tokens will be used to establish a strategic reserve to support a PIPE (Post-IPO Private Equity) tool planned for listing on NASDAQ. This reserve will operate by purchasing S tokens in the open market and over-the-counter trades, with the tokens locked for a minimum of three years. An additional $50 million will be used to support an exchange-traded product (ETP) that tracks the S tokens, which will be launched by a top-regulated ETF issuer managing over $10 billion in assets, with BitGo serving as the custodian. These actions provide an important liquidity foundation and credibility endorsement for S tokens to enter the TradFi sector.

Establishment of the US entity Sonic USA, recruiting a New York team to promote compliance and collaboration

To support its expansion in the United States, Sonic has registered the entity Sonic USA LLC in Delaware and plans to recruit a leadership team based in New York, focusing on regulatory compliance communication in Washington, D.C., and collaboration with traditional financial institutions. The project team stated that this initiative is to respond to the "growing institutional demand" for the S Token in the U.S. market. Previously, due to the original Fantom token economic model restrictions (the foundation controlled less than 3% of the tokens), Sonic missed collaboration opportunities with institutions such as GameStop, Robinhood, and Polymarket, which also delayed its early launch on major exchanges.

Reform the Gas fee mechanism to increase the token burning rate, offset inflation, and protect long-term holders

To balance the inflation impact brought by the new token issuance, Sonic will reform its Gas fee mechanism, increase the token burning rate, and impose deflationary pressure on the token supply. The project team claims that this will allow them to operate in the capital market without diluting the rights of long-term holders. Since its launch in January this year, the price of the S token has dropped nearly 69%, with a current price of $0.31 and a market cap of $892 million. The deflationary mechanism reform aims to restore market confidence and provide a more sustainable token economic model for the ecosystem.

Participate in the U.S. Department of Commerce's On-Chain Economic Data Program, Integrating Chainlink and Pyth Oracles

In addition to financial expansion, Sonic is also involved in an initiative by the U.S. Department of Commerce to put economic data on the blockchain using Chainlink and Pyth oracles, allowing developers to access real-time macroeconomic indicators directly on its blockchain. This collaboration is expected to enhance Sonic's practical value and technical credibility in institutional application scenarios. Additionally, the project successfully applied to the Singapore High Court for a winding-up order against Multichain Foundation Ltd regarding the 2023 Multichain security vulnerability incident (which resulted in losses exceeding $210 million for users) in May of this year, demonstrating its legal rights protection capabilities.

Conclusion

Sonic is trying to break the limitations of the original token economic model and counterintuitively enter the traditional financial field through this large-scale token issuance and strategic transformation. Its multi-layered strategy built through PIPE tools, ETP products, and American entities provides a new paradigm for integrating blockchain projects into the mainstream capital market. However, against the backdrop of continuous pressure on token prices and intensified market competition, whether it can balance expansion needs with the interests of holders and effectively respond to the challenges of the American regulatory environment will be key factors determining this ambition. The design effects of gas fee reform and deflationary mechanisms will also directly impact the long-term value capture capability of the S token.