Hey Edge readers,

It’s been a tough stretch for crypto bag holders recently, and with sentiment currently in the dumps, now might be the time to step back from speculative moonshots and focus on promising yield strategies. That’s why this week we’re spotlighting the Sonic L1, the reincarnation of Fantom that’s promising blazing fast speed, compatibility with popular apps, and a major airdrop to attract fresh liquidity. In this issue, we’ll explore how Sonic plans to overcome Fantom’s pitfalls and why it’s suddenly a magnet for both seasoned farmers and newcomers.

Stay sharp. 🫡

-The Exponential team

What you need to know about Sonic

Sonic didn’t just materialize out of thin air. It’s essentially Fantom 2.0, rebuilt by key figures like Andre Cronje and supported by a community that never fully disappeared. After Fantom’s TVL fell off a cliff—largely due to security issues from the Multichain bridge—the chain needed a fresh start. That reset arrived in December 2024, when Fantom officially became Sonic and began a push to recapture lost liquidity and draw in new users.

At a glance, Sonic remains EVM-compatible, so your usual Ethereum tools and dApps will work seamlessly. Yet it sets itself apart through incredible throughput, with marketing materials boasting 10,000 transactions per second (TPS) and sub-second block finality (testnet achieved 720ms). That’s faster than many rival L1s still in testnet, such as Sei V2 or Monad, and already comparable to leading L2s like Arbitrum and Base.

Reviving DeFi liquidity

The big question is whether Sonic can revive the robust DeFi ecosystem Fantom once enjoyed. Early signs suggest it’s on the right track: total value locked (TVL) on Sonic has been climbing steadily, with a large part of this rise coming from users swapping their old FTM tokens 1:1 for S tokens on Sonic. The amount of stablecoins on the network, dominated by bridged USDC (USDC.e), has also been picking up, reaching over $120M.

More importantly, the chain has rolled out a new Fee Monetization (FeeM) program that is inspired by Web2 ad-revenue models popularized by Youtube. FeeM works by sending up to 90% of gas fees back to dApp builders, providing a sustainable income stream without the pressure of needing to fundraise or secure additional financing. Thus far, over 460K S in fees have been generated from the program, with the top protocol earning 57.5K S (~$40K USD at current S prices).

While this cuts into the token’s burn mechanics, it provides a powerful incentive for project teams to deploy on Sonic. The net result has been a noticeable uptick in developer activity (>76K cumulative contracts deployed) and more frequent app launches, an environment that can attract fresh liquidity, provided those apps solve actual user needs.

S token airdrop & yield farming

Sonic plans to distribute ~200M S tokens in June 2025, rewarding users who’ve earned “points” through various on-chain actions. To qualify, you need to hold S (and other whitelisted assets) in your wallet or deploy them across Sonic dApps. When the airdrop goes live, 25% of your reward vests immediately, while the remainder unlocks over roughly nine months. The combination of new staking rewards, deepening liquidity, and an airdrop on the horizon has drawn in farmers ready to maximize their positions.

For those looking to earn yield, staking S tokens remains a straightforward option: simply lock up your tokens through MySonic or a reputable validator to earn an APY of around 5%. Better yet, you can stake with liquid staking providers like Beets and Origin to remain liquid and redeploy across the Sonic DeFi ecosystem.

On the yield farming front, Sonic DEXs, particularly Shadow and SwapX, have been an attractive option with hundreds of millions in daily trading volume. As a liquidity provider, you can deposit S tokens alongside another asset and collect fees whenever traders swap between them. Yields naturally rise and fall with market activity, but the buzz around Sonic’s airdrop has created potential for higher returns. Some of the largest pools by TVL with the highest point multipliers include:

• Shadow S/USDC.e - $14.3M TVL - 18x

• Shadow USDC.e/scUSD - $14M TVL - 22x

• Shadow s/stS - $8.3M TVL - 16x

• Shadow scETH/WETH - $8M TVL - 12x

• Shadow S/WETH - $6.6M TVL - 12x

• Shadow USDC.e/USDT - $6.1M TVL - 14x

• SwapX wS/OS - $6M TVL - 16x

Addressing old pain points

A major vulnerability that hobbled Fantom was the Multichain bridge hack, which undermined user confidence. Sonic has sought to distance itself from that fiasco by introducing the Sonic Gateway, a native Ethereum bridge with a built-in 14-day fail-safe mechanism designed to mitigate exploit risks. In the event that the bridge is down for 14 consecutive days, users are able to reclaim their assets directly on Ethereum.

Still, it remains to be seen if Sonic’s momentum holds once the airdrop mania fades. Yield farmers can be fickle, flocking to chains with generous short-term rewards before moving on. But if the FeeM model and new bridging tools continue to entice both developers and liquidity, Sonic may stand a chance to become one of the leading high-performance EVM blockchains.

Disclaimer: None of this is financial advice. Yields and airdrops can fluctuate quickly, and bridging to new chains always carries risk. Do your own due diligence before committing funds.

In the news 🗞️

• DeFi protocols may outpace the broader crypto market this year. Kaiko points to upcoming regulatory clarity under the Trump administration as a key catalyst. Kaiko’s DeFi index (KSDEFI) has outperformed ETH, surging roughly 75% since October 2023. Uniswap and Aave could soon enable “fee switches” that distribute protocol revenue to token holders, while Wall Street’s accelerated tokenization push may boost RWA projects like Ondo.

• Hyperliquid flips Solana in fees. Hyperliquid has overtaken Solana in 7-day fees, generating $12.6M with its zero-gas, fully onchain perpetuals DEX, but concerns over centralization and a closed-source API remain. Notably, all fees generated on the platform are reinvested into the community, funding HYPE buybacks and liquidity incentives.

• MKR soars 50% following governance drama. Sky (formerly Maker) saw its SKY/MKR token surge 70% in two weeks after governance facilitators blocked what some labeled a hostile takeover attempt. GFX Labs’ PaperImperium ignited the controversy by calling out a rushed proposal to double MKR’s borrowing power and raise its loan-to-value from 50% to 80%, while founder Rune Christensen defended the move as necessary to ward off attackers aiming to accumulate voting control, drawing parallels to past on-chain governance battles.

Trending 📈