Catenaa, Thursday, February 18, 2026- Sonic Labs, the Layer 1 blockchain formerly known as Fantom, is shifting its strategy to increase demand for its native S token by building and acquiring applications that drive token utility.
The firm aims to internalize key economic activities while remaining open and permissionless for developers.
The move marks a departure from Sonic’s earlier “Gas Fee Only” model, which relied on high transaction volumes to generate value. Sonic Labs said growing throughput and competition among high-performance Layer 1s and rollups has reduced scarcity, compressing fees and allowing users and capital to move freely across ecosystems.
To address this, Sonic plans a vertically integrated ecosystem controlling core infrastructure, including products across trading, credit, payments, settlement, and risk markets.
The company intends to either build these systems in-house or acquire high-quality application teams. FeeM, Sonic’s existing monetization system that burns fees while rewarding app builders, will complement the vertical integration strategy by channeling additional value toward S tokens and supporting sustainable token buybacks.
Sonic Labs highlighted Hyperliquid, its perps DEX, as an example of vertical integration where every trade and fee strengthens the underlying token.
Analysts note this mirrors strategies by other networks, including Ethereum Layer 2 Optimism, which directs a portion of revenue toward OP token purchases.
Industry figures, including Andre Cronje, continue to drive innovation within Sonic, with Cronje’s new onchain exchange, Flying Tulip, recently raising $25.5 million in a private token round, valuing the project at $1 billion.
Sonic Labs’ shift signals an industry trend toward more tightly controlled ecosystems aimed at aligning protocol revenue and application adoption with token value.
