On February 11, 2026, Sonic Labs, the team behind the high-throughput Layer 1 blockchain (formerly Fantom), announced plans to vertically integrate core applications and primitives to drive value to its native S token, as reported by The Block. This shift aims to move beyond the traditional “Gas Fee Only” model, which relies solely on transaction fees for token accrual. Sonic Labs argues that abundant blockspace from rollups and high-throughput chains has commoditized fees, leading to value leakage. By building or acquiring key infrastructure in trading, credit, payments, and risk markets, Sonic seeks to capture and redirect revenue directly to S token holders.
The announcement highlights a maturing view in Layer 1 design. Sonic Labs notes that past assumptions that more users equal more gas fees and deflation have been “fully disproven” over the past five years. Instead, vertical integration will internalize economic activity, similar to Hyperliquid’s model, where the DEX and chain are inseparable, channeling fees to HYPE. Sonic’s existing FeeM system, allowing apps to capture up to 90% of fees while burning the rest, will be reinforced. Future revenue could fund S token buybacks, creating sustainable demand. This approach echoes Optimism’s 50% revenue buyback for OP, per CoinDesk reports on similar strategies.
Sonic Labs remains open to developers but prioritizes projects that “strengthen, rather than extract from” the S token. Hints at acquisitions target high-quality teams across DeFi and RWA sectors. Andre Cronje’s $25.5M raise for Flying Tulip, a new on-chain exchange, underscores talent movement in Sonic’s ecosystem. Sonic’s EVM compatibility and Chainspect-ranked high throughput position it well, but competition from Ethereum L2s and Solana persists. X posts from @AndreCronjeTech praise Sonic’s direction, noting potential for S token to rival OP or ARB in utility-driven value, per recent discussions.
Sonic Labs’ strategy could redefine Layer 1 economics, prioritizing token utility over pure scalability. With Bitcoin at $113,000 and Ethereum at $4,100, the S token may benefit from altcoin rotation if integration succeeds. Risks include execution challenges and regulatory scrutiny on buybacks, per Coinlaw.io. Investors should monitor Sonic’s roadmap updates via soniclabs.com and track S token flows on CryptoQuant. Following @TheBlock__ on X provides real-time insights. This vertical integration could propel Sonic as a leader in DeFi innovation, potentially driving the S token to new highs in 2026.
