Recently, Binance announced the integration of the Sonic chain into the Binance Wallet and will provide airdrop rewards to users trading Sonic ecosystem tokens on the Binance App or Binance Wallet. Despite the constant fluctuations in the "monkey market," Sonic seems to be steadily developing amidst this volatility. Just four months after its launch in March, the TVL of the Sonic chain has already surpassed the $2 billion mark, and its token $S has a solid support level around a market cap of $1.5 billion.
With a gradually enriching ecosystem and strong support from Binance, can Sonic bring the DeFi concept back to its peak in the current Crypto landscape, which has lost its new narrative direction? This article will introduce Sonic's second quarter points model, Sonic's Binance Alpha, and some interesting new projects from Sonic.
Season 2 is Coming - New Points Model
Three months ago, I wrote a guide on earning points during Season 1, which mentioned yield strategies from mainstream platforms like Silo Finance and Ring. At that time, the rich DeFi ecosystem had already increased its TVL nearly fivefold within a month. Now, three months later, Sonic's TVL has grown nearly threefold again, jumping from $800 million to $2.2 billion, making it the top net inflow across all chains in the past three months.
Further Reading: "TVL Increased Fivefold in a Month, Analyzing the Most Profitable Yield Strategies on Sonic"
From May 6 to May 8, Sonic held the Sonic Summit at MAK Museum and the Museum of Fine Arts, where the high-standard artistic atmosphere was praised by participants. It was during this conference that the Sonic project team announced the rules for the second season's points system, which are more standardized and visualized compared to the previous quarter.
In Season 2, the number of Gems each App can earn depends on its final score, "App Final Score," which is derived from the multiplication of three core indicators.
App Gem Score (A): This score is calculated based on the type weight of the application "Category Weight," whether it is Sonic native "Sonic Native Weight," and the incentive weight "Incentive Weight," reflecting the platform's strategic inclination towards different categories 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 commercial capability.
Ultimately, the total score for an App is calculated using the formula: A × B × C. Based on this final score, the platform will proportionally distribute the total Gems reward pool to each App, with the specific formula being Gems for a certain App = "Total Score of the App ÷ Total Score of All Apps" × Total Gems for Season 2.
Currently, the top 10 App Gems, apart from established DeFi projects like Aave and Pendle, are almost all Sonic native projects.
Compared to the Gems rules algorithm in Season 1, Season 2 appears more refined, mainly due to the addition of "C" Revenue Score.
"A" reflects Sonic's desire to incentivize project teams to produce more types of "native" projects. Although the specific types have not yet been announced, based on the distribution ratio of project types in Sonic's first season, cross-chain bridges dominate, followed by DEX trading-related functions.
"B" encourages project teams to provide more value to users, similar to how user reviews work in platforms like Yelp, where businesses offer better services or additional value "to earn more points or rewards," and users provide better feedback to the ecosystem "resulting in a higher Point Score for the project team," thus forming a mutually beneficial balance between users and project teams.
"C" aims to incentivize the production of more "Killer APPS," which are commonly referred to as "useful" applications.
The updated Gems rules comprehensively incentivize user engagement with the ecosystem while also raising the quality standards that project teams need to meet, potentially forcing existing teams to upgrade or attracting more outstanding teams to join.
Sonic Summit Jailbreak
During the Sonic Summit, Sonic also hosted an interesting mini-game where non-programmers "Users" could participate by "tricking AI." Participants had to design clever prompts to induce a system guarded by Google Gemini AI to leak a set of private keys. Each prompt submission required a certain amount of S tokens, with costs gradually increasing and contributing to a prize pool. Users who successfully extracted private keys and passed verification would win from the prize pool.
Programmers "Devs," on the other hand, could solve problems by exploiting vulnerabilities in smart contracts. Developers needed to identify and exploit vulnerabilities intentionally embedded by the Cantina team in smart contracts to access funds in the prize pool. Developers who successfully exploited the vulnerabilities and passed verification would win from the prize pool.
The current winner is a user "User" who successfully breached the AI guard's defenses using prompts to find the private key and won approximately $30,000 in the prize.
Gold Sponsors
The sponsors of this event were divided into several levels based on the "depth" of their sponsorship: "Gold," "Silver," and "Bronze," with the top three "Gold" sponsors being quite prominent.
Galaxy was founded in 2018, headquartered in New York City, with offices in North America, Europe, and Asia. It offers services including trading, lending, strategic consulting, institutional investment solutions, proprietary Bitcoin mining and custody services, network validator services, and enterprise custody technology development. It is reported that the assets on its platform are expected to reach $10 billion in the 2024 financial report. They recently announced plans to go public on Nasdaq on May 16.
SwapX is a multifunctional DEX on Sonic, integrating Algebra's Integral V4 platform (similar to Uniswap V4's HOOK), centralized liquidity mechanisms, automated liquidity management, and a plugin-based architecture, bringing a low-slippage, high-depth trading experience.
Compared to traditional AMMs, SwapX allows LPs to precisely set liquidity ranges, and the introduced ve(3,3) model further binds the incentive mechanism to 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 aims to provide a certain level of playability for both Web2 users entering Crypto and Web3 Native users.
ICHI is a non-custodial DeFi protocol that simplifies and optimizes liquidity management for token projects, DAOs, asset managers, and blockchain ecosystems. By supporting the deposit of single tokens into centralized liquidity pools, ICHI automates the liquidity allocation process between AMMs. ICHI's automated treasury aims to support token issuance, maintain price stability, and continuously enhance liquidity depth while reducing impermanent loss risks for liquidity providers.
SwapX and ICHI are also deep partners, not only serving as gold sponsors for the Sonic Summit but also collaborating on a "food truck" outside the venue to provide lunch for attendees. Of ICHI's TVL of $71 million, $46 million belongs to SwapX. The deep collaboration between the two may bring more ecological extensions to Sonic in the future.
Binance Alpha Boosts Momentum
On May 1, Binance announced the integration of the Binance Wallet to support the Sonic mainnet. Following the announcement, the TVL of various protocols on Sonic saw varying degrees of increase. According to data from Nansen, the number of active addresses on Sonic experienced a 289% increase within seven days, and the chain's transaction fees grew by 72%.
On May 8, Binance officially announced a trading competition on the Sonic chain with a total reward of approximately $2.2 million. The event runs from May 8 to May 23, where users trading $SHADOW on the Sonic chain will have 22,100 SHADOW tokens distributed among the top 13,000 users by trading volume. Users trading $BEETS will have 1,824,000 BEETS tokens distributed among the top 1,200 users by trading volume. Users trading $ANON will have 153,000 ANON tokens distributed among the top 10,000 users by trading volume. Additionally, users ranked in the top 7,000 by total trading volume on the Sonic Chain will share 1,001,000 S tokens.
However, at the beginning of the event, many community users reported significant slippage when trading on Binance Alpha, with some experiencing slippage exceeding $50. This may also be one of the reasons why Binance officially offered double weight rewards for limit orders during this event.
Further Reading: "Binance Alpha Gold Mining Guide: How to Efficiently Score Points at Low Cost"
What Other Projects Can Be Focused on Besides Earning Points with Binance?
DeFi
SilverSwap is the DEX and DeFi component of the Sonic chain, offering concentrated liquidity, auction features "Flare/Snatch," integrated bridging, perpetual contract trading, and high fee rewards for liquidity providers, with plans to launch a LaunchPad "LSW."
Interestingly, SilverSwap has two asset auction modes. Flare allows users to automatically repurchase their desired tokens using SilverSwap's funds/fees.
Flare auctions are SilverSwap's repurchase mechanism, with a 12-hour cycle. In each cycle, the platform accumulates 4.25% of total trading fees into a fund pool. Users can bid using AG tokens, designating the fund pool for repurchasing a specific token. At the end of the cycle, the highest bidder's designated token will be repurchased, and the AG tokens used will be burned. This mechanism provides project teams with an efficient way to support their token prices using AG tokens while achieving deflation through the burning of AG tokens.
Snatch allows users to earn 42.5% of DEX trading fees from any liquidity pool deployed on SilverSwap, with winners receiving AG rewards. Snatch auctions are user-facing mechanisms, where each liquidity pool converts 4.25% of the trading fees generated in each 12-hour cycle into AG tokens, forming a prize pool. Users can bid on this prize pool using AG tokens, and at the end of the cycle, the highest bidder receives all AG tokens from the prize pool, while their bid's AG tokens will be burned. This mechanism not only provides users with the opportunity to earn additional AG tokens but also promotes the deflation of platform tokens through the burning of AG tokens.
The Hedgehog Protocol presents an interesting concept of market sentiment, referred to as BASEFEE. This is similar to the funding rate in perpetual contracts or an indicator of on-chain gas, which the project team likens to the pulse of the market.
BASEFEE functions like the periodic payments exchanged between long and short positions in the perpetual futures market. They incentivize traders to choose the less popular side to maintain market balance. Users can utilize it to gauge market sentiment and seek arbitrage opportunities.
The specific method is implemented through on-chain smart contracts for funding rate swaps, cross-platform arbitrage, trading in prediction markets, and automating payment and settlement behaviors, directly bypassing intermediaries. Users no longer bet on prices but rather on behaviors. Of course, the success of this concept depends on the liquidity of the project and the stability of the oracle; any deficiency on either side would directly shake the theoretical pillars underneath. The testnet is now open, but the details of the points system have not yet been announced, and it remains uncertain whether the behaviors on the testnet will be related to future point acquisition.
AI
XAlpha is an AI indicator alpha platform that recently launched a web plugin that displays incremental information such as author insights, token tag mentions, related tokens, and associations with previously marked accounts while browsing posts on X.
AllianceHub is trained on a vast amount of data from crypto projects, including their whitepapers, history, social activities, KOL influence, on-chain data, and off-chain information, allowing AI to analyze personal connections between projects "BD" or manual research, enabling the AI system to process multi-faceted information about projects, including fundamentals, market activities, social signals, and technical details, and then analyze the compatibility and potential for collaboration between projects.
Shiami, which finished second in the DeFAI hackathon co-hosted by @SonicLabs and @DoraHacks in early April, now supports mainstream DEXs such as Silo Finance, Aave V3, Beets.fi, Pendle Finance, and Shadow, as well as Sonic native staking platforms like Angles, Beets, and Beefy. In the upcoming V2 version, a new concept is introduced, elevating DeFAI to DeVibeFAI, where "Vibe" has become a common term in the recent AI Agent craze, indicating a programming concept that requires no coding background and allows programming through natural language.
Its main features involve automated yield strategies "intelligently allocating to the best-performing strategies" and automated rebalancing "periodically rebalancing among the highest APY pools." Users can design their own AI DeFi strategies, selecting the protocols, assets, and risk levels and conditions they wish to participate in, with the strategies designed by users potentially available for public or private sharing in the future.
As the Sonic ecosystem continues to grow, the previous FUD surrounding founder AC's "abandonment" of Famton has gradually faded, and more developers are joining the Sonic ecosystem. Although the community believes that the APR of the chain is still below expectations, the injection of liquidity and deep collaboration with Binance for a chain focused on DeFi has increased anticipation for the continued emergence of sustainable financial models.
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