Sonic SVM, a Solana-based blockchain, is launching a new burn mechanism designed to increase buying pressure and enhance liquidity for its native token.
Solana-based project Sonic SVM (not to be confused with Sonic, formerly Fantom) is implementing a major change to its tokenomics aimed at increasing demand and enhancing liquidity for its native token, SONIC. According to a press release shared on May 19, the project will now use 50% of all transaction fees to purchase SONIC tokens from the open market.
Sonic SVM is a Solana-based blockchain built using the Solana Virtual Machine, operating like a layer-2 network with a focus on monetizing user engagement within decentralized applications.
Previously, SONIC tokens collected from fees were sent directly to a burn address, reducing supply as an indirect price support mechanism. With the new model, however, the project aims to create immediate buying pressure through open-market purchases, potentially boosting the token’s price more effectively. Chris Zhu, CEO of Sonic SVM, stated that this change is expected to benefit holders more directly by increasing token demand and encouraging liquidity growth.
“This redesigned mechanism revolutionizes long-term token value by strategically creating sustained demand and building protocol-owned liquidity, moving beyond simple token burning. This benefits our growing ecosystem and rewards token holders,”
Chris Zhu, CEO of Sonic SVM
Sonic SVM: Fees to Enhance Liquidity and Staking Rewards
In its upcoming update, Sonic SVM will change how transaction fees are managed. A notable feature is that Solana tokens, which make up 12.5% of Sonic’s fees, will be staked on the Solana mainnet to earn staking rewards. This move aims to enhance liquidity and provide additional value to token holders.
“To ensure our token economy scales with network usage across our gaming and social platforms, this mechanism strengthens buy pressure and liquidity as adoption grows”
Alan Zhu.
The staking rewards generated from the Solana tokens representing 12.5% of Sonic SVM’s fees will be distributed to users who hold vested SONIC tokens and contribute liquidity to Sonic’s SVM chain. Alan Zhu, co-founder and chief product officer at Sonic, explained that this system is designed to grow liquidity in line with network activity.
