Why did Fantom reinvent itself as Sonic?

Fantom was one of the pioneers of the directed acyclic graph (DAG) design for distributed ledgers. It featured fast finality and transaction fees of a fraction of a cent.

Fantom is rolling out a new blockchain named Sonic, which will feature a new token, S, and several innovations in DeFi.

The new chain will be launched in December 2024 with a new token, S, and several innovations in decentralized finance (DeFi), according to a new report by crypto derivatives exchange Huobi's (Point) over-the-counter (OTC) trading service, HTX.

Those who hold Fantom’s native token, FTM, will be able to convert their tokens to S at a 1:1 ratio using an official portal that will be announced shortly after the mainnet launch.

S will remain non-inflationary for the first six months following the mainnet launch. Afterwards, 6% of the initial S supply will be minted every six months to reward early users of the blockchain and capital-efficient airdrop farming strategies. The full report by HTX covers several such strategies with different risk profiles.

Moreover, Sonic will reward developers with a Gas Fee Monetization (FeeM) mechanism. Up to 90% of the transaction fees across participating applications will be forwarded to developers, while the rest will be routed to validators who secure the network.

Among the innovations in DeFi that will be implemented on Sonic is Flying Tulip, a new DeFi platform being spearheaded by Andre Cronje, one of the founders of Fantom and the mastermind behind the Yearn.finance protocol.

The platform combines the functionalities of trading, liquidity pools, and lending in one system. It is also based on the same concept as Curve v2’s dynamic bonding curve.

An AMM with a dynamic bonding curve adjusts its curvature based on how close the pool price is to an external price observed by an oracle. It also automatically concentrates the liquidity around the current price, simplifying liquidity management and capitalizing on the efficient use of capital.

Flying Tulip introduces even faster equilibrium curve updates and narrower ranges alongside other improvements with a novel dynamic loan-to-value model.

To address the issue of hefty onchain data storage and slow node synchronization, Sonic uses a new database design called SonicDB. It separates the blockchain state into two databases: the LiveDB is used for fast access to the current state and execution, while the ArchiveDB stores full historical data. This separation allows consensus nodes to cut data storage requirements by up to 90%.

The new blockchain will also feature the SonicVM execution engine, which stands for Virtual Machine. It is capable of dynamically translating EVM bytecode into a faster internal format for speedier execution. The SonicVM is fully compatible with the EVM, meaning that Fantom smart contracts can run seamlessly on the new blockchain.

Furthermore, the SonicVM optimizes heavy computations to prevent repeated work and pre-analyzes contract code to cache valid jump destinations.

For a more comprehensive explanation of the technical aspects of Sonic, download the full report from HTX here.