Sonic Labs has adopted a "vertical integration strategy," abandoning the traditional L1 subsidy model and building its own product matrix to empower the S token.

PANews reported on February 12th that Sonic Labs announced a new "vertical integration strategy." This strategy will move away from the traditional Layer 1 model of driving broad ecosystem growth through subsidies, and instead focus on integrated, user-facing products and infrastructure to directly drive the application, use, and sustainable growth of the S token. Sonic emphasizes that its goal is not to position itself as just another blockchain provider, but to build an ecosystem where core infrastructure, applications, and liquidity are synergistically strengthened around the S token economy, ensuring that usage, liquidity, and incentives directly translate into sustained demand for the S token.

Sonic points out that with the commoditization of blockchain space and intensified cross-chain competition, transaction fees alone are no longer sufficient to drive sustainable value growth for the native token S. To address this, Sonic has proposed three core initiatives: 1. Acquiring and integrating high-quality application teams to incorporate core financial infrastructure (trading, credit, payment, settlement, risk management, etc.) into its own product matrix; 2. All revenue generated from integrated applications will be channeled into the protocol to enhance the value of the S token, rather than flowing to external teams or independent tokens; 3. Establishing a sustainable token buyback mechanism based on the protocol's actual revenue, replacing buyback models that rely on treasury depletion or short-term incentives. The launch of this new plan is progressing smoothly, and future updates will detail leadership, the Sonic Development Fund, institutional expansion, token economics, governance, and comprehensive revenue streams.