Sonic Labs, the development team behind the Sonic blockchain (formerly Fantom), has announced a significant strategic shift aimed at consolidating its product roadmap and concentrating resources on core blockchain infrastructure offerings. The move reflects a broader recalibration within the Web3 sector, where firms are increasingly prioritizing scalability, interoperability, and long-term sustainability over expansive multi-product experimentation.
The revised strategy involves streamlining peripheral initiatives to focus engineering resources on Sonic's primary infrastructure stack. This includes its liquidity aggregation framework and cross-chain interoperability tools, with planned enhancements for improved reliability, scalability, and composability. A key component is expanding support for developers through better documentation, integration tooling, and ecosystem partnerships to simplify onboarding and reduce technical friction.
In a related and more specific announcement titled "Vertical Integration: The Missing Link in L1 Value Creation," Sonic Labs revealed plans to "vertically integrate" core applications to drive value directly to its native S token. The team stated it will build or acquire products "specifically designed to increase S token utility," focusing on areas where "token utility, liquidity, and usage converge." This marks a departure from the traditional "Gas Fee Only" model for Layer 1 value accrual.
The vertical integration strategy aims to prevent "value leakage" by owning, internalizing, and monetizing the blockchain's most important economic activities. Sonic Labs intends to control key infrastructure and core products across trading, credit, payments, settlement, and risk markets. This approach will not replace its existing FeeM monetization system—which allows app builders to capture up to 90% of fees while burning the rest—but will reinforce it by redirecting fees towards a system that rewards S tokens.
The team cited the structural surplus of blockspace due to scaling technologies like rollups and high-throughput designs, which leads to fee compression. As revenue streams from these vertically integrated products build, the plan is to execute sustainable buybacks of the S token, a model similar to Ethereum Layer 2 Optimism's recent buyback plan. The team pointed to Hyperliquid as an example of a successful vertically integrated model where the application and infrastructure are inseparable.
The strategic pivot follows an internal review of product performance and market demand, as infrastructure providers adapt to shifting capital flows and heightened competition in DeFi and interoperability. Industry observers view the move as a sign of operational discipline aimed at improving capital allocation efficiency and supporting long-term sustainability in a competitive market.
