Governance Vote 3: Booming (and Building) For the Long Run

TL;DR

  • Mint a small percentage of new tokens on a streaming basis beginning six months after Sonic network launch to fund ongoing marketing, ecosystem growth, and partnership efforts post-launch.

  • Launch programs to work with the 200M $FTM Sonic Labs Innovator Fund and accelerate Sonic Labs’s revamped grant programs, including:

    1. Sonic Spark — Spark innovation with early founders and bring the next wave of builders to Sonic
    2. Sonic University — Provide students at select colleges and universities with resources, knowledge, access, and guidance to building the next generation of dApps on Sonic
  • Innovative, annual burn mechanism ensures 100% of all newly minted tokens are allocated towards network growth and any unused tokens are burned.

For additional details on the upgrade from $FTM to $S as well as information on the Sonic network and technology, read this forum post.

Sonic Beyond Launch

As we continue to build out the new Sonic network, the Fantom Foundation has allocated up to 200,000,000 $FTM from its treasury to the Sonic Labs Innovator Fund to support dApp growth, various business development initiatives, and worldwide adoption.

The funds in our Sonic Labs Innovator Fund will be utilized to secure essential provisions for Sonic’s launch, including infrastructure providers, on-chain tooling, compliance integrations, native launches, bridge integrations, wallet integrations, aggregator support, community grants and initiatives, native stablecoin issuance, RPC providers, indexers, and more.

While this fund accelerates the migration to the Sonic network, it is not sufficient for the long-term growth of the new network, and additional tokens will be required to ensure the growth, innovation, and longevity of the network.

This proposal seeks to secure the community’s support for a new tokenomics design to extend Sonic Labs’s grant programs for developers, infrastructure providers, and marketing partners worldwide.

These new tokenomics are intended to work with the up to 200,000,000M $FTM allocated to the Sonic Labs Innovator Fund to ensure the ongoing growth and success of the Sonic ecosystem for years to come.

$S Tokenomics

Over the course of the next six years, the Sonic Foundation will allocate a stream of new $S tokens as operational funding for Sonic Labs to manage network growth among dApps, BD partnerships, and our growing community of existing and new users.

The minting of these new tokens are solely to fund future growth and development of Sonic Labs, the Sonic chain, and Sonic’s ecosystem, enabling us to be aggressive in securing dynamic Web2 partnerships, innovative Web3 projects, and other bold audience growth and engagement programs that bring new users to the platform.

These funds are to be utilized on an ongoing basis to drive ongoing adoption via sustained business development, marketing, and various partnership and ecosystem growth programs, including:

Sonic Spark

The Sonic Spark program provides native builder grants for Web3 innovators across the following:

  • DeFi
  • Gaming
  • SocialFi
  • NFTs
  • DePin
  • Other applications

Sonic Spark enables chosen partners to enjoy Sonic funding/liquidity along with additional grants and credits from Sonic partners, such as Google Cloud and Alchemy, as well as tools from select indexes and oracles, auditing vouchers, and RPCs.

Sonic University

The Sonic University program provides students at select colleges and universities with resources, knowledge, access, and guidance to build the next generation of Defi, SocialFi, gaming dApps on Sonic.

Additionally, the program brings extended student participation to the Sonic community through hackathons and other community engagement initiatives and provides targeted universities with grants from both Sonic and Google Cloud to run Sonic validators.

Putting These Tokens Into Circulation

Tokens will be minted linearly, in accordance with the chain’s “SFC” contract*, on a block-by-block basis to reduce the impact on the fully diluted valuation (FDV) of $FTM’s migration to $S.

These tokens will only be minted at least six months after the launch of the Sonic network. After six months, gradual inflation will begin and the stream of newly minted $S tokens will slowly be introduced into circulation. Given the drawn-out nature of this approach, we believe this “dilution” should have minimal impact on the token’s market standing and FDV.

New $S Issuance and $FTM

Per an earlier governance vote, $FTM will be transferable on a 1:1 basis to $S at genesis for a period of 6 months. For those 6 months, $FTM will be valued at 1:1 based on the FDV of both tokens. Over the course of six years after that 6-month transition period, this ratio of 1:1 will change in accordance to the linear inflation determined by the outcome of this vote.

What is FDV?

Fully diluted valuation (FDV) = Current price x total supply

FDV is the theoretical market capitalization of a coin if the entirety of its supply were to be in circulation, based on its current market price. The FDV value is theoretical as increasing the circulating supply of a coin may impact its market price.

Also, depending on the tokenomics, emission schedule, or lock-up period of a coin’s supply, it may take a significant time before its entire supply is released into circulation.

Yearly Burn to Offset Inflation

To guard against inflation, Sonic Labs will utilize an innovative approach to ensure the ecosystem’s financial health. Sonic Labs will burn newly minted tokens not used during the course of the year, ensuring that 100% of all newly minted tokens from this initiative are allocated towards network growth, rather than being held by the treasury for later use.

Example: If we mint x tokens per quarter, and only utilize y tokens, the difference will be burnt.

x - y = burn amount

If the community decides on a 1.5% inflation annually for six years, we would mint 47,625,000 tokens each year (3,175,000,000 x 1.5% per year). Should Sonic Labs utilize only 5,000,000 tokens that year, the Sonic Foundation will burn the remainder (42,625,000 tokens).

Through this new burn mechanism, which will exist for the entirety of the 6-year inflation period, we are able to keep dilution to a minimum and ensure that the community’s investment in Sonic via this governance vote directly translates to increased FDV.

Furthermore, if the use of these newly minted tokens fails to show significant levels of capital efficiency, the Foundation can increase the token burn and reassess.

There will be a web dashboard that will display all the burns.

Next Steps

If this governance proposal passes, six months after the deployment of the Sonic network, $S tokens will begin to be minted on a streaming basis to be spent across a variety of partnerships, marketing, and growth programs. See the graph below outlining the introduction of these tokens to the network, which will last for 6 years.

A network-wide grant application form will be available if this proposal passes.

Conclusion

With the use of the Sonic Labs team, funding from the Fantom Foundation, plus newly minted $S tokens, it will enable us to (but not limited to):

  • Increase $S adoption and global presence
  • Grow team and scale to drive increased adoption
  • Use robust marketing initiatives and DeFi onboarding campaigns
  • Introduce Sonic Spark and Sonic University programs to propel us well into the future of Sonic technology adoption and future innovation

Voting

All mints are calculated based on the circulating supply of FTM p.a. According to Fantom Explorer

  • Mint 1.0% per year based on the previous year for 6 years for proposal 3.
  • Mint 1.5% per year based on the previous year for 6 years for proposal 3.
  • No, do not mint additional tokens for this initiative.

Please vote here => fWallet

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30 Likes

The burn mechanism here is key. I don’t see any downsides considering inflation will be kept to an absolute minimum. Incentives are aligned here for all parties - users, builders, team, and investors.

I voted to mint 1.5% per year for 6 years. :+1:

7 Likes

I have cast my vote in favor of issuing a 1% annual minting for a period of 6 years.

1 Like

Nice to see, really glad the team is pushing for further innovation on this chain. One of my favourite projects!

2 Likes

Sound like a good choice!

yes I think the team will be diligent with the money and not waste it. :slight_smile:

1 Like

1.5% per annum for 6 years makes the msott sense inflation-adjusted wise. win win for everyone involved

yes this makes sense to do 1.5% over 6 years

where is the proper link for the vote? it doesnt seem to be working for me

Epic! Makes the most logical sense to spark innovation and builders to Sonic!

1.5% over 6 years makes the most sense in this case

this makes sense tto do a 1.5% for the FDV

this makes sense, i have voted for the 1.5%

kek i want it to be 3% per year

1 Like

i want this to be minted 1.5% like the previous vote thanks

ofc swarthoid kekk :blueberries: :convenience_store: :soccer:

1 Like

I vote Mint 1.5% per year based on the previous year for 6 years for proposal 3.

Is a new project eligible to participate in the Sonic spark program for potential grants? If so, what are the eligibility criteria and how can I apply

thank you !

1 Like

@admins anyone know about this ?

This - Mint 1.0% per year based on the previous year for 6 years