Sonic’s tokenomics ensure security and stability by using staking rewards, controlled emissions, and burn mechanisms to maintain a balanced supply.
Sonic’s tokenomics are designed to keep the network secure and decentralized while driving long-term, sustainable growth. With staking incentives, controlled supply expansion, and burn mechanisms, Sonic aims for a sustainable ecosystem that benefits validators, developers, and users.
Sonic’s initial launch starts with a total supply of 3.175 billion S tokens, though not all are in circulation immediately. The initial circulating supply is about 2.88 billion S, with the rest set aside for staking rewards, ecosystem incentives, and future funding.
To support adoption and steady growth, Sonic has structured additional token allocations that introduce new tokens into circulation gradually:
Airdrop Allocation
6% of the total supply will be minted six months after launch to reward early adopters and developers. A built-in burn mechanism reduces supply over time and ensures rewards go to active users.
Ongoing Funding
1.5% of the total supply will be minted annually for six years, starting six months after launch, to fund network expansion, developer incentives, and marketing efforts. Any unused tokens will be burned at the end of each year to prevent excess supply.
Sonic uses a proof-of-stake (PoS) model, where validators help secure the network by staking S tokens. To become a validator, you need to stake at least 500,000 S, earning block rewards and transaction fees in return.
For the first four years, no new tokens will be created for validator rewards. Instead, 70 million S per year will be taken from unclaimed FTM block rewards, ensuring validators still earn rewards without increasing total supply.
After four years, block rewards will be issued at a rate of 1.75% per year, keeping the network secure while avoiding inflation. If you don’t meet the staking requirement, you can delegate your S tokens to a validator and earn a share of the rewards.
Validator rewards adjust based on how much of the network is staked. If more than 50% of S tokens are staked, rewards decrease to maintain balance. If fewer tokens are staked, rewards increase, keeping staking attractive and preventing centralization.
Sonic has three main burn mechanisms to reduce supply and create a deflationary economy, helping the S token retain value over time. These are:
Fee Monetization Burn
If a transaction happens on an app not enrolled in Fee Monetization (FeeM), 50% of the transaction fee is burned. This prevents low-quality applications from clogging the network while reinforcing S token scarcity.
Airdrop Burn
Sonic’s airdrop program is designed to reward long-term participation and prevent token dumping. If you claim your airdrop early, a portion of your tokens is burned permanently. The earlier you claim, the more you lose. This ensures that the circulating supply grows gradually and sustainably over time.
Ongoing Funding Burn
Out of the 47.625 million S minted annually for six years, any unused tokens are burned at the end of the year. This keeps the supply tight and ensures only necessary funding enters circulation.
By combining staking incentives, controlled minting, and deflationary burns, Sonic ensures a healthy balance between supply and demand, making sure rewards stay valuable while keeping inflation in check.
Fee Monetization (FeeM) lets developers earn up to 90% of the transaction fees generated by their applications. This creates a steady income stream for builders, ensuring apps remain financially viable without constant external funding.
If an app isn’t part of FeeM, 50% of the transaction fee is burned, 45% goes to validators, and 5% is sent to the Ecosystem Vault. On the other hand, if an app opts into FeeM, up to 90% of the transaction fee is given to the developer, with the remaining 10% distributed to validators. This incentivizes developers to build and maintain high-quality applications which, in turn, lead to a stronger and more active ecosystem.
Sonic has dedicated funding programs to accelerate adoption and fuel new projects. One of these initiatives is the Innovator Fund, in which up to 200 million S tokens will be allocated to developers and projects to ensure sustained ecosystem growth. Sonic also features an Ecosystem Vault. A portion of network fees is distributed quarterly to the Sonic Community Council (SCC), which funds community initiatives, developer onboarding, and ecosystem support. By making sure funding is used efficiently and only necessary tokens are released, Sonic can keep growth steady without unnecessary inflation.
Overall, the network offers a very scalable and practical token model. Sonic’s tokenomics are built to reward network participants, maintain token scarcity, and support long-term sustainability. With staking incentives, Fee Monetization, controlled supply expansion, and multiple burn mechanisms, Sonic ensures a healthy economy where users, developers, and validators all benefit in years to come.
