During a time when other chains were focused on the MeMe market and continuously distracted by various sudden events, Sonic Labs (formerly Fantom) devoted itself to the development of DeFi. Sonic announced several new measures to incentivize DeFi projects in its ecosystem, causing Sonic's TVL to surge by 500% in just under a month. What did Sonic do, and how can retail investors participate in the Sonic ecosystem?

Main Chain, New Layout: What Has AC Brother Done Since Returning to Sonic?

In 2021, Fantom saw great success, with its TVL reaching as high as $8 billion. However, after Chief Developer Andre Cronje's departure and the end of DeFi Summer, Fantom gradually faded into obscurity. With AC's return at the end of last year, the Fantom brand was upgraded to Sonic. The once-star-studded team used cutting-edge technology to build a new chain, which indeed achieved remarkable results within two months of its launch.

In just two months, Sonic went from 0 to over $500 million in TVL, with a net inflow of $110 million in external funds into Sonic. Solana accounted for the majority, followed closely by Base and ETH. The DEX trading volume on Sonic also surpassed the $1 billion mark.

How did Sonic achieve this in such a short time? For a DeFi chain, the fund pathway for stablecoins is undoubtedly essential. After integrating USDT into Sonic, the total market value of stablecoins has risen by 59% in just one week. DeFiLlma shows that the current total market value of stablecoins such as USDT, USDC, scUSD, stkscUSD, and USDC.e has exceeded $100 million.

Aside from Euler, the native lending platform Silo and the staking platform Beets have provided significant liquidity for assets such as ETH. Sonic has also nested three DeFi protocols—Lombard Finance, Ether.fi, and Rings Protocol—to provide users with a nested staking model that offers leverage and point bonuses. In a mutually beneficial scenario, Sonic has brought BTC liquidity into its ecosystem, resembling a triangle offense on the basketball court.

The starting point of the attack was Lombard Finance, a DeFi project focused on Bitcoin. Its most famous product is the launch of LBTC, a wrapped version of Bitcoin that enables fluid staking. Users stake BTC on Ethereum, Base, or BNB through Lombard and receive a 1:1 "LBTC" in return.

The next step in the chain was Ether.fi, which collaborated with Lombard to launch the first Bitcoin fluid staking derivative token called "eBTC." EBTC uses LBTC as collateral in the background, allowing eBTC holders to potentially earn multi-layered rewards. They benefit from LBTC's staking rewards "backed by actual Bitcoin" and Ether.fi's heavy staking strategy on Ethereum. Moreover, eBTC can be deposited into Rings on Ethereum to mint scBTC.

The final target of the attack was Rings, a platform that enables users to deposit various tokens, from stablecoins to Ethereum, LBTC, eBTC Bitcoin derivatives mentioned earlier. Users can deposit these assets into the Rings Protocol to mint interest-bearing "sc" version assets, including scBTC, scUSD, and scETH. According to the current Sonic reward mechanism, holding, using, or staking these assets allows users to earn weekly rewards. Rings leverages Veda Labs' farming strategies through protocols on Ethereum and Sonic to generate yield on deposited assets and redistribute it to users.

To target early developers and onboard new users, Sonic subsequently conducted a DeFAI Hackathon and Sonic Meme Mania contest simultaneously to expand AI and Meme users.

The prize pool for this hackathon is $295,000 equivalent in $S to support the development of AI agents that interact and perform on social and on-chain operations within Sonic. It has attracted 18 AI projects and 485 tech enthusiasts, with the registration deadline set for February 25th.

The Meme contest offers a total of $1 million $OS as prizes, with the highest market cap among participants nearing $7 million. Sonic's infrastructure for Meme coins is still relatively underdeveloped. It remains to be seen whether, while aiming to become the fastest chain for transactions in DeFi, it will also follow Solana's strategy to capture the Meme market.

But the most significant addition is the rug pull and DeFi players. The Sonic project plans to airdrop a total of 2 billion $S tokens as incentives, released over a 1-year period, with the first season lasting 6 months, accounting for 40-60% of the total airdrop. Of this, 25% of the airdrop is for immediate circulation tokens, and 75% is for tradable locked NFT certificates. Users can trade the NFTs and also destroy a portion based on the unlocking schedule in the following table to unlock $S liquidity ahead of time. The flexible airdrop unlocking mechanism has also attracted many users.

What are the opportunities in the Sonic ecosystem rumored to have very high yields?

How to get the airdrop?

The current voucher for receiving the airdrop is a score, with three types of airdrop scores: Passive Points "PP" only require holding whitelist assets in a Web3 wallet. Active Points "AP" require providing whitelist assets in the participation project as liquidity. DApps Points "Gems" ecosystem developers can receive an allocation of "Sonic Gems" based on their contributions to the ecosystem.

According to on-chain analyst @phtevenstrong's estimated APR and the provided strategies, users have many ways to participate and earn a decent yield.

The $S token is currently in full circulation supply, with no VC shares, so there is no dilution risk. Nearly half of the liquidity is currently locked up, with "31% of the total supply staked + 5-10% of $S locked in DeFi protocols." Assuming a 50% airdrop after 6 months, the estimated average points TVL during that period would result in an additional 20% APR when the TVL reaches $300M, and an additional 12.5% APR when it hits $500M.

Basic Points Mining Strategy

The Rings Protocol's scETH loop strategy: By staking Ethereum (ETH) on the Rings Protocol, you can mint interest-bearing scETH. Then, you can collateralize the scETH on the Euler platform, borrow Wrapped Ether (WETH), and set a 91.5% loan-to-value ratio (LTV). Reinvest the borrowed WETH to potentially achieve 10x leverage. Without considering Rings points and rEUL rewards, the theoretical Annual Percentage Rate (APR) of this strategy can reach 87.49%.

Silo Finance's stS/S Hedge-and-Go Strategy

Borrow stS token on Silo Finance with a 95% LTV ratio to achieve 20x leverage. Then, pledge the borrowed stS tokens to earn 2.4% lending yield and 5.3% staking yield. This entire process can also earn a 10% bonus in points, enhancing the overall returns. The base return of this strategy is 7.7%, plus the 10% bonus in points, totaling 17.7%. The complete strategy can achieve an APR of up to 74%.

Reverse Hedge Arbitrage Strategy

Borrow stS token on Silo Finance to receive an 8x points bonus. Then, lend the stS token to earn a 4.1% lending yield. Additionally, there is a daily bonus of 0.5 Silo points. The strategy offers a base return of 4.1% and a daily bonus of 0.5 Silo points, providing lower but relatively less risky returns.

After the MeMe market gradually cooled down, DeFi has once again captured the public's attention. Sonic, specializing in DeFi, has seen outstanding growth in the first three months. Embracing the DeFai concept, Sonic aims to establish a solid footing in the face of the Hype-Monad sandwich, leveraging Sonic's high-performance chain and AI to create a new DeFi paradigm. Expecting to introduce more interesting innovations in the fierce competition among numerous projects, Sonic seeks to bring fresh vitality to the market.

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia