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Migrating from Fantom to the Enhanced Sonic (S)

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This article provides an in-depth analysis of the transition from the Fantom blockchain to Sonic (S), a new generation of blockchain technology. We will discuss the technical advancements that underpin Sonic (S), including [mention specific technologies like consensus mechanisms, sharding, or layer-2 solutions]. Furthermore, we will explore the role of the S token, the native token of Sonic. The S token has multiple roles within the network, such as paying for transaction fees, staking, running validators, and participating in governance.

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Staking
Embark on your journey within the Sonic ecosystem by staking your S tokens. This process involves locking up your S for a period, allowing you to actively participate in network security and earn rewards.

Key Considerations:
• Staking Period: A 14-day unbonding period applies when you choose to withdraw your staked S tokens.
• Validator Selection: Exercise due diligence in selecting a reputable validator. The performance and actions of your chosen validator can directly impact the rewards earned on your staked S tokens.

Tokenomics
At Sonic’s genesis, the total supply of S tokens mirrors the total supply of FTM, standing at 3.175 billion. To foster a sustainable and thriving ecosystem, the following enhancements will be gradually integrated into the S token’s economic model through a series of governance proposals.

Airdrop & Community Incentives
• Airdrop Distribution: 6% of the total S token supply will be reserved for an exclusive airdrop program, scheduled six months after Sonic’s launch. This program aims to reward both existing Fantom Opera and emerging Sonic community members, including users and builders.

• Burn Mechanism: The airdrop incorporates an innovative burn mechanism. This mechanism incentivizes active participation within the Sonic ecosystem while simultaneously reducing the overall circulating supply of S tokens, contributing to a more deflationary model.

Source: Google Image

Source: Google Image

Sustainable Funding for Growth
• Ongoing Funding Program: To fuel the continued growth and development of the Sonic ecosystem, a small portion of the S token supply (1.5% annually for six years) will be minted. These funds will be utilized for strategic initiatives, including:
o Global Expansion: Increasing S token adoption and expanding the Sonic network’s global reach.
o Team Growth & Scaling: Scaling operations to support increased user demand and drive broader adoption.
o Community Engagement: Implementing robust marketing campaigns and user onboarding programs to foster a thriving and engaged community.
o Innovation & Development: Launching the Sonic Spark and Sonic University programs to nurture innovation and advance the future of Sonic technology.

• Anti-Inflationary Measures: To safeguard against potential inflationary pressures, any unutilized portion of the newly minted tokens within a given year will be burned. This mechanism ensures that all minted tokens are effectively utilized to drive network growth and development rather than accumulating in the treasury.

Block Rewards & Transition from Fantom Opera
Block Reward Migration: Block rewards will gradually transition from Fantom Opera to the Sonic network. As validators and stakers migrate to Sonic, Opera’s block rewards will be gradually reduced to zero. These saved resources will then be utilized to reward validators within the Sonic ecosystem.

Early Block Reward Structure: To achieve a 3.5% Annual Percentage Rate (APR) for Sonic validators without introducing additional inflationary pressures during the initial four years, existing FTM block rewards from Opera will be reallocated to Sonic.
• Long-Term Sustainability: After the initial four-year period, S token block rewards will resume. These rewards will be generated through the minting of new tokens at an annual rate of 1.75% to incentivize and reward validators within the Sonic ecosystem.

Validator Rewards: Securing the Network and Earning Rewards
By operating a validator node and staking a substantial amount of S tokens, you play a crucial role in safeguarding the security and integrity of the Sonic network. In return for your valuable contributions, you are eligible to earn rewards in the form of:

• Block Rewards:
o The target annual reward rate for validators is set at 3.5% when 50% of the total S token supply is staked.
o To maintain this target, the network dynamically adjusts the reward rate based on the actual staking participation.
 For instance, if all S tokens are staked, the annual reward rate will be 1.75%.
 Conversely, if only 25% of S tokens are staked, the annual reward rate will increase to 7%.
o During the initial four years of the Sonic network, validator rewards will primarily be derived from the reallocation of block rewards previously earned on the Fantom Opera network.

• Transaction Fees:
o Users interacting with the Sonic network pay transaction fees (gas fees) to execute operations.
o A portion of these transaction fees is distributed among all validators who have staked S tokens.
o A detailed breakdown of validator earnings from transaction fees can be found [link to relevant resource].

• Ecosystem Vault Contributions:
o The established Ecosystem Vault program, previously active on the Fantom Opera network, has been adapted for the Sonic ecosystem.
o Quarterly disbursements from the Ecosystem Vault will be allocated to the Sonic Community Council (SCC).
o The SCC, an independent collective of community members, plays a vital role in fostering a vibrant and thriving Sonic ecosystem through various initiatives such as user-focused programs, developer onboarding, and app support.
o The amount allocated to the SCC will be determined at the discretion of the Sonic Foundation, taking into account the SCC’s performance and contributions during the preceding quarter.

Key Takeaways:
• Validator rewards are a crucial incentive for securing the Sonic network.
• The reward structure is designed to be dynamic and adjust based on the overall level of staking participation.
• The Ecosystem Vault program fosters community growth and development by supporting the efforts of the Sonic Community Council.

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