Sonic (SUI) Co-Founder Andre Cronje Teases New Algorithmic Stablecoin Launching Within Five Weeks

After high-profile scandals involving algorithmic stablecoins like TerraUSD (UST), which collapsed and caused nearly $40 billion in losses for investors

Sonic co-founder and lead architect Andre Cronje teased on March 25 plans to launch a new algorithmic stablecoin on the network.

Cronje highlighted that the new stablecoin could offer over 19% in annual percentage yield at $1 billion total value locked (TVL).

He previously said on March 20:

“Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement.”

Cronje was referring to high-profile scandals involving algorithmic stablecoins like TerraUSD (UST), which crashed and caused nearly $40 billion in losses for investors. The episode triggered widespread scrutiny of algorithmic models for stablecoins.

Despite initial hesitation, Cronje proceeded to share technical benchmarks. On March 22, he published a proof of concept (POC) showing the stablecoin yielding over 200% APR at $10 million in TVL, decreasing to approximately 23.5% at $100 million, and stabilizing near 4.9% beyond $1 billion in TVL.

On March 24, he reported optimization breakthroughs that massively increased yield potential. He said in a post:

“Yohaan just found a way to turn this into 95.9% APY at $100m TVL, and 19.18% at $1bn+”

Cronje did not disclose any details on the stablecoin’s algorithmic mechanics, collateral backing, or on-chain controls. However, the yield curve implies a variable-rate return system based on liquidity tiers.

Additionally, the yield model suggests a scalable incentive mechanism where early adopters are rewarded with higher returns, gradually normalizing as liquidity deepens.

A $230 billion market

Sonic, a high-performance layer-1 network, is positioning itself as an execution environment optimized for financial applications.

According to Cronje, the network is tailored for high-throughput and low-latency operations, suggesting a stablecoin product could serve as a core component in its evolving ecosystem.

The stablecoin market recently surpassed $230 billion in total value, led by Tether’s USDT’s $145 billion market cap, followed by Circle’s USD Coin (USDC), which has a market cap of $58 billion.

Despite USDT’s dominance, new entrants are posing real competition in the sector, including Ethena Labs’ USDe, which registered outstanding growth over the past year.

USDe, which is also an algorithmic stablecoin, climbed from a $1.3 billion market cap to $5.4 billion within a year.