Phantom Unveiled: Sonics Revolutionary Leap Forward in DeFi

In December 2024, following a rebranding, the mainnet of Sonic was launched, featuring an EVM-compatible Layer 1 blockchain. This new venture from the original Fantom project is spearheaded by Andre Cronje, widely recognized as the «father of DeFi».

By February 2025, the interest in the Sonic ecosystem and its token surged significantly for various reasons: users were eager for the upcoming airdrop, the network showcased competitive metrics, and the management promised to revive the era of “DeFi summer”.

“I agree: even if our technology is superior, it means little on its own today—what matters is distribution and usability. This is what we are focusing on as we create a horizontal, composable DeFi stack across all our projects,” wrote Andre Cronje, the creator of Yearn Finance and chief architect of Sonic, on X. This was his response to an investor known as kook, who claimed that in the modern crypto industry, technology has merely become a means of product promotion.

Cronje is known for his candidness. From the outset of his career in cryptocurrency, he has criticized its downsides, such as the overwhelming amount of misinformation, the race for hype, and the toxic community. Acknowledging these issues hasn’t prevented him from remaining an advocate for blockchain technology.

Initially trained as a lawyer, Cronje graduated from Stellenbosch University in South Africa. He continued his studies at a private computer training institute where he later became an instructor.

Between 2006 and 2018, Cronje held various roles ranging from programmer to technical director at several South African IT firms. He then took his first steps into the digital assets market as a code analyst for various ICOs on the CryptoBriefing portal, later advising several venture funds and crypto startups, including Wanchain, Fusion, and Fantom.

Cronje rose to prominence and earned the title of «father of DeFi» through the Yearn Finance protocol. Launched in 2020, this yield aggregator utilized Vaults—repositories that automatically allocated deposited stablecoins across lending services, offering users passive income with relatively high annual percentage yields (APY).

According to Cronje, the launch of Yearn cost $42,000, with audits and hosting expenses doubling that figure. To fund the project, he had to take out a mortgage and acquire an additional $20,000.

Shortly after its debut, Yearn was hacked, but the protocol survived the attack (all subsequent startups by the DeFi architect attracted hackers like magnets).

The issuance of the token in June 2020 marked a new phase for Yearn. At that time, Cronje made an unexpected announcement: “We launched YFI: an entirely useless token that is not backed by anything. Let me repeat: it has zero financial value. There’s no premine, no ICO, you cannot buy it, it won’t be on Uniswap, and there will be no trading. We don’t have these tokens either.”

Whether these words were sincere or a clever manipulation, within a week of trading starting on Balancer, YFI skyrocketed by 35,000%, rising from $3 to a peak of approximately $77,000. By February 26, 2025, the value of YFI was about $5,700.

At this juncture, Cronje managed to lay the groundwork for the further evolution of decentralized finance. Despite frequent criticism directed at him—and his own sharp statements about the industry—he built effective mechanisms that garnered trust.

However, in 2022, Cronje announced that DeFi would inevitably fall under regulation and that he was withdrawing from the industry. These words resonated as betrayal for many decentralization enthusiasts.

During the two years of his absence from the public eye, he made few appearances in the news. Finally, in early 2025, as the chief DeFi architect of Sonic, Cronje revealed the «real reason» for his disappearance. Since 2021, he had been under pressure from the SEC, which initially requested information about the investors and beneficiaries of Yearn Finance, but later turned its focus toward investigations against him.

“After two years of dealing with this every month, enduring endless sleepless nights, and experiencing stress, I chose [to officially leave the industry]. I am sure many here would say I shouldn’t have given up, but I also believe that anyone saying that has never been in a similar situation. You face all the negativity but gain no advantages,” he confessed.

In the same post, Cronje reaffirmed his commitment to the principles of DeFi and asserted that his comments about the need for regulation were misunderstood.

“I simply couldn’t be public, but I continued to work tirelessly all these years, which is why I am finally close to releasing my new primitives. […] My last posts before ‘vanishing’ were about regulated DeFi. Most people didn’t even read those articles; they simply saw the words ‘crypto regulation’ in the headline and assumed I had become a government agent,” he expressed indignantly.

In clarifying his 2022 statement, the DeFi architect noted the distinction he had made then: regulation aimed at decentralized smart contracts is naturally impossible and only leads to developer exile from the industry, as happened with him, while third parties (exchanges, brokers) can indeed be subject to oversight.

In light of the easing regulatory pressure in the U.S. and a more lenient stance on tokens, experts indicate a potential renaissance for DeFi. For instance, analysts at Bernstein expect a liquidity outflow from the memecoin sector into decentralized finance, NFTs, and gaming tokens.

This backdrop provided a favorable environment for the rebranding and technological overhaul of Cronje’s brainchild—Fantom.

The Fantom Foundation Ltd. was established in early 2018 in South Korea. The project’s founder and CEO, An Byung Ik, is known in the country for creating the restaurant rating app SikSin. Initially, the Fantom Foundation team was predominantly comprised of South Korean developers, and its first partnerships were focused on the local food technology industry.

Subsequently, the Fantom Foundation changed its jurisdiction to the Cayman Islands, and its leadership became international. CEO and IT director roles were filled by Australian Michael Kong, with Cronje serving as the chief DeFi developer.

The mainnet was launched in December 2019, and by autumn 2021, Fantom had broken into the top 10 projects in terms of total value locked (TVL).

The network belongs to a family of blockchains built on Directed Acyclic Graph (DAG) architecture. Its mixed consensus implementation of DAG-BFT allows for high-speed parallel transaction processing and ensures network operability even when up to one-third of nodes are malfunctioning. Similar models are utilized by projects like Aptos, Sui, and IOTA, but Fantom is the first to support smart contracts based on DAG.

Every node retains its own local DAG of event blocks containing transactions. Nodes do not send blocks to each other for consensus, as in linear blockchains. Instead, validators periodically share transactions and events, synchronizing them within a single epoch.

The primary reason for launching Sonic, according to the team, is the difficulty of further technical upgrades for Fantom. While the initial advertised throughput was around 4,500 transactions per second (TPS) before settling at a more realistic ~2,000 TPS, Sonic promises up to 10,000 TPS. Transaction finalization will take less than one second at a cost of under $0.01, allowing it to compete with new Layer 1s like Monad and Berachain.

The goal of Sonic Labs, responsible for developing Sonic, is to provide a platform for fast and cost-effective transactions with a focus on DeFi and gaming mechanics.

The Sonic developers have implemented a cross-chain bridge known as Sonic Gateway to facilitate liquidity merging with Ethereum. This native bridge enables the transfer of ERC-20 tokens between Sonic and the second-largest cryptocurrency network.

The Gateway features a fault tolerance mechanism that safeguards user assets. If the Gateway fails, funds can be recovered on the Ethereum network after a 14-day period.

Asset transfers occur at defined intervals—“tacts”—for efficient gas usage: every 10 minutes from Ethereum to Sonic and every hour in the opposite direction. The Fast Lane feature can expedite transactions by increasing the fee.

SonicVM is fully EVM-compatible, allowing the use of programming languages like Solidity and Vyper.

Another important aspect of the update is the Carmen solution. This system manages data based on the actual needs of the network, reducing storage requirements for validator nodes from 2,000 GB to 300 GB.

This optimization decreases operational costs for nodes, enabling a greater number to participate in the network verification. Historical data that no longer requires frequent access can be compressed or moved. Additionally, Carmen reduces storage needs for archive nodes from 11 TB to less than 1 TB.

According to Andre Cronje, once the missing DeFi mechanisms are implemented in Sonic, the network will resemble “one large platform for high-frequency trading.” The following features and incentives are planned for rollout:

In a tweet on the day of the mainnet launch, the CTO of Sonic announced: “I will be launching my dapps gradually, reintroducing ICOs, ‘fair launches,’ and retroactive airdrops to showcase what Sonic can truly achieve.”

Many of these elements have already been implemented in Fantom. Back in August 2021, the Fantom Foundation announced the launch of a new rewards program for developers of DeFi services. In October, it expanded this initiative to include projects in the GameFi sector.

FTM token holders can convert their tokens into S tokens on a 1:1 basis after the mainnet launch.

The growing interest in the future airdrop, fueled by nostalgia for “DeFi summer,” has noticeably revived the ecosystem. The new reward campaign incorporates a tested strategy—leaning into DeFi, mini-games, NFTs, and naturally, “meme mania.”

The decline of the entire crypto market in late February 2025 echoes a familiar scenario from the Arbitrum airdrop farming days in 2023. At that time, despite the unstable market conditions, tokens of DEXs, lending platforms, and other derivative components of the ecosystem showcased robust growth.

According to Sonic’s documentation, approximately 200 million S tokens will be distributed among those who hold and utilize approved assets within various DeFi applications on Sonic, thereby enhancing liquidity.

Three main dynamics are proposed for airdrop farming:

On February 7, 2025, the Meme Mania Competition rewards program was launched, running until March 8. One million liquid Origin Sonic (OS) tokens will be distributed among the top 125 holders of the eight winning meme coins as a reward for loyal community participants.

Thanks to active community engagement, the ecosystem is exhibiting growth. Shadow Exchange, a leading DEX, demonstrated outstanding price dynamics with a monthly growth rate of approximately 1,400% and a TVL nearing $140 million.

This is followed by decentralized trading platform SwapX, which saw a twofold increase in a month and a TVL of around $45 million.

Among derivatives exchanges focused on futures trading, Navigator took the lead. According to CoinGecko, the NAVI token increased by approximately 500% over 30 days.

With new projects like Monad, Berachain, and the upgraded Sonic entering the fray, competition in Layer 1 is intensifying. In the rapidly expanding landscape of blockchain applications and cryptocurrencies, each network can carve its own niche. Sonic is betting on high speeds, low fees, and liquidity aggregation, bolstering its position in the DeFi segment.

The upcoming summer airdrop will reveal how the leadership of the revamped blockchain has adapted to the new realities of incentive programs and tokenomics balance.