Recently, Binance announced the integration of Sonic Chain into Binance Wallet, and that users holding Sonic ecosystem tokens traded on Binance Alpha on Binance App or Binance Wallet will receive airdrop rewards. Despite the ongoing market volatility, Sonic appears to have maintained steady growth during this period of fluctuation. Since its launch in March, just 4 months ago, Sonic Chain's Total Value Locked (TVL) has surpassed the $20 billion mark. Additionally, its native token $S has found solid support around a $15 billion market capitalization.

With the increasingly rich ecosystem and the strong support from Binance, will Sonic be able to bring the DeFi concept back to the peak in the current narrative-shifting Crypto environment? This article will introduce Sonic's second-quarter loyalty program, Sonic's Binance Alpha, and some interesting new Sonic projects.

Season 2 Arrives — New Loyalty Program

Three months ago, the author wrote a guide on earning points during Season 1, mentioning yield strategies from mainstream platforms such as Silo Finance and Ring, among others. The rich DeFi ecosystem at that time had already caused its TVL to grow nearly 5 times in just one month. Fast forward three months, Sonic's TVL has once again grown nearly 3 times, with TVL leaping from $8 billion to $22 billion in funds, making it the top in-net-flow chain in the past three months.

Further Reading: "TVL Grows Fivefold in One Month, Summarizing the Most Profitable Yield Strategies on Sonic"

On May 6th to May 8th, Sonic held a Sonic Summit at the MAK Museum and Museum of Fine Arts, where the high-profile art atmosphere was praised by participants. It was at this event that the Sonic team announced the second season's loyalty program, which is more standardized and visual compared to the previous quarter.

The number of Gems each App can receive in Season 2 depends on its final score, which is calculated by multiplying three core metrics.

App Gem Score (A): This score is calculated based on the application's type weight, Sonic native status, and incentive weight, reflecting the platform's strategic focus on different types of Apps.

Point Score (B): Represents the total activity points generated by the App for users, measuring user engagement.

Revenue Score (C): The cumulative revenue generated by the App, reflecting its business capability.

Ultimately, the total score of the App is calculated by the formula: A × B × C. Based on this final score, the platform will distribute the total Gems reward pool proportionally to each App, with the specific formula being an App's Gems = "App's total score ÷ Total score of all Apps" × Total Gems quantity in Season 2.

The current top 10 App Gems, apart from Aave and Pendle, are almost all Sonic native projects.

Compared to the Gems rule algorithm of the first season, the second season appears more elaborate, mainly due to the addition of the "C" Revenue Score.

The "A" metric embodies Sonic's desire to incentivize project teams to produce more types of "native" projects. Although the specific category rules have not yet been disclosed, based on Sonic's first season allocation proportions for project categories, the most advantageous category is cross-chain bridges, followed by DEX trading-related functions.

Meanwhile, "B" belongs to incentivizing project teams to bring more value to users, more akin to the loyalty points given by businesses like Yelp. Businesses provide better services or additional value to users (resulting in more points or rewards), and users provide better feedback to the public or the ecosystem (resulting in a higher Point Score for the project team), thus creating a symbiotic balance between users and project teams.

Finally, "C" aims to incentivize the creation of more "Killer Apps," commonly known as "useful" applications.

The updated Gems rules are more comprehensive in incentivizing user engagement with the ecosystem, but they also raise the bar for the qualities that project teams need to have. This may force existing teams to upgrade or attract more high-quality teams to join.

Sonic Summit Jailbreak

During the Sonic Summit, Sonic also hosted an interesting game where non-programmer users ("Users") could participate by "tricking AI." Participants had to induce a set of private keys to leak from a system guarded by Google's Gemini AI through clever hint design. Each submission of a hint required a certain amount of S tokens, with the fee gradually increasing and contributing to the prize pool. Users who successfully extracted the private keys and passed verification would win the prize pool.

On the other hand, programmer developers ("Devs") could exploit smart contract vulnerabilities to solve the puzzle. Developers had to identify and exploit smart contract vulnerabilities intentionally embedded by the Cantina team to access funds in the prize pool. Developers who successfully exploited the vulnerability and passed verification would win the prize pool.

The current winner is a non-programmer user ("User") who successfully broke through the AI guardian's defense using hint words to find the private key and won a prize of about $30,000.

Gold Sponsors

The event's sponsors were divided into different levels of sponsorship based on the "depth" of sponsorship: "Gold," "Silver," "Bronze," with the top three "Gold Sponsors" having significant presence.

Galaxy

Founded in 2018, Galaxy is headquartered in New York City and has offices in North America, Europe, and Asia. It offers services including trading, lending, strategic advisory, institutional investment solutions, proprietary Bitcoin mining and custody services, network validator services, and enterprise custody technology development. The assets on their platform reportedly reached a volume of $10 billion in their 2024 financial report. They recently announced plans to go public on Nasdaq on May 16.

SwapX

SwapX is a multi-functional DEX on Sonic, integrating Algebra's Integral V4 platform "similar to Uniswap V4's HOOK," centralized liquidity mechanism, automated liquidity management, and a plug-in architecture. The combination of these technologies delivers a low slippage, high-depth trading experience.

Compared to traditional AMMs, SwapX supports LP precision liquidity range setting and introduces the ve(3,3) model, further binding incentive mechanisms with governance depth. By adopting the EIP-4337 account abstraction standard, users can log in via email or Google. As an All-in-One Sonic Dex, the layout should provide a certain level of playability for users entering crypto from both Web2 and Web3 Native perspectives.

ICHI

ICHI is a trustless DeFi protocol that simplifies and optimizes liquidity management for token projects, DAOs, asset managers, and blockchain ecosystems. By supporting single-token deposits into centralized liquidity pools, ICHI automates the liquidity provisioning process between AMMs. ICHI's automated treasury aims to support token issuance, maintain price stability, continuously enhance liquidity depth, and reduce impermanent loss risks for liquidity providers.

SwapX and ICHI are deep partners, not only serving as gold sponsors for this Sonic Summit but also collaborating outside the venue to provide a "Food Truck" for attendees' lunch. Of the $71 million in ICHI TVL, $46 million belongs to SwapX. The profound collaboration between both parties may bring further ecosystem extensions to Sonic in the future.

Binance Alpha Initiative Boost

On May 1st, Binance announced that Binance Wallet has integrated support for the Sonic mainnet. Following the announcement, the TVL of various protocols on Sonic saw varying degrees of increase. According to Nansen data, the number of active addresses on Sonic saw a direct 289% growth in the first 7 days, and the chain's fees also increased by 72%.

Then on May 8th, Binance officially announced the Sonic on-chain Trading Competition with a total reward of about $2.2 million. The event runs from May 8th to May 23rd, and users who trade on the Sonic chain using Alpha will have their SHADOW token rewards distributed. The top 13,000 SHADOW token users by trading volume will each receive an average of 22,100 SHADOW tokens. The top 1,200 BEETS token users by trading volume will each receive an average of 1,824,000 BEETS tokens. The top 10,000 ANON token users by trading volume will each receive an average of 153,000 ANON tokens. And users ranking in the top 7,000 in overall Sonic Chain trading volume will each receive an average of 1,001,000 S tokens.

However, in the early stages of the event, many community users reported excessive slippage in Binance Alpha trades, with some experiencing slippage of over $50. This may have been one of the reasons why Binance officially announced that limit orders would receive special double-weighted rewards in this event.

Further Reading: "Binance Alpha Mining Guide: How to Efficiently Earn Points at Low Cost"

What other projects can Sonic focus on besides using Binance to earn points?

DeFi

Silver Swap

SilverSwap is the DEX and DeFi component of the Sonic chain, providing centralized liquidity, an auction feature called "Flare/Snatch," integrated bridging, perpetual contract trading, high fee rewards for liquidity providers, and plans to launch a LaunchPad called "LSW."

Interestingly, SilverSwap has two asset auction modes. Flare allows users to automatically repurchase their desired tokens using SilverSwap's funds/fees.

The Flare auction is SilverSwap's repurchase mechanism, with a 12-hour cycle. In each cycle, the platform accumulates 4.25% of the total transaction fees into a pool. Users can bid using the AG token, specifying the pool to repurchase a specific token. At the end of the cycle, the user with the highest bid for a specific token will have it repurchased, and the AG tokens used will be destroyed. This mechanism provides a project team with an efficient way to support its token price using AG tokens and achieves deflation by burning AG tokens.

Snatch allows users to earn 42.5% of DEX trading fees from any liquidity pool deployed on SilverSwap, with the winner receiving AG rewards. Snatch auction is a user-oriented mechanism where each liquidity pool, in each 12-hour cycle, converts 4.25% of the pool's generated transaction fees into AG tokens, forming a prize pool. Users can bid using AG tokens for this prize pool, and at the end of the cycle, the user with the highest bid receives all the AG tokens in the pool, while their bid AG tokens are burned. This mechanism not only provides users with the opportunity to earn additional AG tokens but also promotes token deflation on the platform through burning AG tokens.

Hedgehog Protocol

The Hedgehog Protocol has proposed an interesting concept, the transaction market sentiment, known as BASEFEE. This is a metric similar to the funding rate in perpetual contracts or on-chain Gas, with the project referring to it as the pulse of the market.

BASEFEE functions similarly to the funding rate in the perpetual futures market, where regular payments are exchanged between long and short positions. By incentivizing traders to choose the less popular side, it maintains market balance. Users can leverage these to gauge market sentiment and seek arbitrage opportunities.

The specific implementation is through on-chain smart contracts for interest rate swaps, cross-platform arbitrage, automated behavior arbitrage for market prediction, payments, and settlement, bypassing intermediaries directly. Users no longer bet on price but on behavior. The success of this concept depends on the project's liquidity and the stability of oracles; the lack of either can directly impact the underlying theoretical foundation. The testnet is now open, but specific details on tokens have not been disclosed yet, and it remains unclear whether the behavior on the testnet is relevant to future token acquisition.

AI

XAlpha

XAlpha is an AI Alpha platform that has recently introduced a web plugin to display incremental information while browsing posts on X, including author insights, mentioned token tags, related tokens, and previously tagged account associations.

alliancehub

AllianceHub is trained on extensive data from cryptocurrency projects, including their whitepapers, history, social activities, KOL influence, on-chain data, off-chain information, etc. It uses AI to analyze skip patterns of personal connections ('BD') or manual research between projects, allowing the AI system to directly handle multi-faceted information about projects, including fundamental aspects, market activities, social signals, technical details. It then analyzes the fit and likelihood of collaboration between projects.

Shiami

Ranked second in the DeFAI Hackathon co-hosted by @SonicLabs and @DoraHacks that concluded in early April, now powering Silo Finance, Aave V3, Beets.fi, Pendle Finance, Shadow, and mainstream DEXes, as well as Sonic-native staking platforms such as Angles, Beets, Beefy, and more. The upcoming V2 release notably introduces a new concept, elevating DeFAI to DeVibeFAI, where "Vibe" is a term seen frequently in the recent AI Agent trend, with Vibe Code signifying the concept of programming through natural language without the need for a programming background.

Main features include automated yield strategy "intelligent allocation to best-performing strategies" and automatic rebalancing "periodically rebalancing between highest APY pools." Users can devise their own AI-driven DeFi strategies, choosing the protocols, assets, risk levels, and conditions they wish to engage with, with the ability for these user-designed strategies to be publicly or privately shared in the future.

As the Sonic ecosystem continues to thrive, the earlier FUD surrounding Famton's "rug pull" by founder AC has gradually subsided, with more developers joining the Sonic ecosystem. Although the community feels that the chain's APR is still below expectations, the emphasis on DeFi on a chain like this, especially following liquidity depth injection cooperation with Binance, has raised hopes for the emergence of a more enduring financial model.

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