Author: Matt Visser, CEO of Sonic Labs

Translation: Deep Tide TechFlow

Deep Tide Introduction: On the 50th day of taking office, Sonic's new CEO Matt Visser wrote a rare "wake-up open letter." He candidly states that the summer of crypto will not return, as approximately $2 trillion has evaporated from the total market value of crypto over the past year, and the remaining narrative world is no longer willing to pay the price. The most glaring evidence is last week's proposal from Aave to shut down the Sonic deployment—deposits are only about $7.6 million, contributing less than $5,000 each quarter, which cannot even cover maintenance costs. His conclusion is harsh: first cut off integrations that exist for "announcement" rather than "trading volume," and bet all four projects on revenue; tokens (S) should be at the end of the sequence rather than the beginning, and repurchase and destruction without revenue are merely the treasury transferring left hand to right hand. This letter is almost a declaration of operational "anti-crypto narrative."

The handover and transition are taking longer than we initially expected and are still underway, but I am pleased to announce that we are finally nearing the finish line.

Crypto initially made many promises but has never truly fulfilled its core premise of "transforming financial services." The Crypto Summer is a thing of the distant past; people mistakenly believe we are now in a crypto winter and that the seasons will cycle again. Even today, we still have pseudo-decentralized protocols running with centralized single points of failure. Whether it's off-chain operations or simply a single point without a clear backup. I have never been comfortable with anonymous teams; I know it’s not very cypherpunk, but it just doesn’t sit well with me. The crypto space has never learned to protect users through self-regulation, and the majority of issues over the years stem from the abuse of the slogan “code is law,” which has effectively kept a large number of everyday, non-crypto-native users at bay.

The world has changed; the poles have drifted. The Crypto Summer we knew will never happen again. We must adapt, and I believe we have everything we need to adapt.

Over the past year, the total market value of crypto has nearly halved, evaporating approximately $2 trillion in value. It hasn't vanished into thin air; it has simply found a better home. The remaining market is still not to be underestimated, but we cannot pretend that DeFi, or the "promise of financial futures," is still a narrative the world is willing to buy into.

Even after the Iran War, the global rebalancing has been surprisingly good. China has reduced imports, the U.S. has increased some of its own exports; overall, we have not experienced the kind of physical shortages that were anticipated in the early days of the war. The S&P 500 has hit new highs again. AI capital expansion continues. And crypto is still stumbling forward. Blockchain technology companies need to grow up.

Robinhood is taking the lead with Robinhood Chain. Polygon is transforming into a payments company. And at Sonic, we have come to a stark realization: without generating revenue, the best technology in the world is far less important than we need it to be.

Last week presented a living example. Aave proposed to shut down its Sonic deployment, along with five other chains, and about fifty low adoption assets in its market. Stani explicitly stated that this is not targeting any specific L1 or L2; I believe him, as the logic behind this is precisely the logic this letter aims to express.

Our deposits on Aave have dropped to about $7.6 million, contributing less than $5,000 each quarter, which cannot even cover maintenance costs. Compared to Aave's $14 billion ledger, this is a round-off negligible number, and it won’t touch our core data. But I won't gloss over it, as this is precisely the lesson we are practicing. Integrations that exist for "official announcements" rather than real trading volume will be cut, and rightly so. The remedy is not more integrations but rather products that can generate revenue on our own chain.

What comes next? There is much to say about the company's operations. A more complete operational review will follow. Before that, let me outline the senior management structure.

We are advancing four special projects, each with a dedicated leader, its own goals, and OKRs, and revenue is the most important of these. Our core capabilities have always resided within us and have consistently stayed internal: protocol engineering, payment and forex operations, and infrastructure for intelligent agents. These individuals are all seasoned tech veterans, and I don't need to look outside. Our collaborative areas are specialized infrastructure, cross-chain liquidity, specific new features, and front-end work.

This letter discusses strategic direction; I won’t fabricate delivery dates just to fill in a section. What I can promise is the form of the next letter: in Q4, each of these four projects will announce named leaders, milestones, and the conditions under which we will stop pursuing them. If something does not work out, we would rather say so and steer people towards things that can succeed, and you have the right to hold us accountable.

"No one cares about technology." This is a phrase often repeated by Sonic when confronting market realities and responding to its own actions. The truth is, people do care; they just don’t care within our accustomed context.

As the best L1 blockchain, with battle-tested technology and a more solid team, this is indeed important. But it only matters when it is positioned and packaged as a relevant solution, rather than a display of arrogance. In terms of raw throughput, we no longer have essential differences, and I believe no one does. Many chains can now produce numbers comparable to ours. Benchmarking hasn’t been a moat for a long time; we should stop treating it as one.

This is the true role of performance. It gives us the opportunity to commoditize and deliver those vital solutions. We must test concepts directly with users like traditional B2C, to develop, launch, and measure the performance of each business unit; at the same time, finding suitable supporters, distribution, and marketing partners to create B2B2C transactions that can deliver real scale and impact, exploding these concepts. Achieving product-market fit is a mission, and this isn't a task that can be completed in a day.

This is what performance is truly for. It allows us the opportunity to productize and deliver what is truly important solutions. We must engage in traditional B2C ways, testing concepts directly with users to develop, launch, and measure the performance of each business unit; at the same time, finding suitable supporters, distribution and marketing partners for real scale and impact in B2B2C transactions to achieve exponential expansion of these concepts. Achieving product-market fit is a mission, and this isn't a task that can be completed in a day.

Payments—as mentioned, the performance differences are clear. Coupled with foreign exchange trading to transform cross-border payments with certainty and a fraction of current costs and time; this gives us another vertical area to enter that is highly competitive.

We have established partnerships and business interactions with Frax, using its frxUSD as a white-label version for USSD, while also collaborating with Circle to promote native on-chain USDC and exploring using Spendl to enable deposit channels, as well as supporting Mastercard and spending functions. This is an area we are pushing forward vigorously, with more dialogues just beginning that cannot be mentioned here yet. If you feel we have missed you, please contact us at [email protected].

AI—this isn't just a matter of national security; having the capability for intelligent agents to execute tasks and solve goals set for users is not an opportunity unique to web3; it is merely a starting point for some of the best ideas. For example, "shopping" for intelligent agent templates, activating compute and spending resources; then letting it run by itself through web2, web3, and the physical world. That is where it becomes truly exciting.

Sonic has a new network and client upgrade currently being rigorously tested internally, including built-in MCP servers and Priority Lanes (Sonic's native transaction prioritization system). These are foundational components supporting the ability of AI agents and their goals to achieve massive scalability.

Those who initially registered Spawn with the original concept of "developer tools" should have received this message, but the project has evolved to include two distinct product lines.

Spawn Studio: Protocol parties can submit here to be included in the Sonic MCP server and receive support; developers can privately build here or publish their intelligent agent templates.

Spawn Marketplace: Non-technical users can browse the market here or simply find the best, most relevant ready-made templates, confirm the tasks of the agent, fund it, and then let it start running.

We’ve compiled a key list of AI infrastructure needs and managed to incorporate most of them into the upcoming version. Spawn Studio is where we open these features to technical developers, while Spawn Marketplace is our method of sharing them with non-technical users and monetizing them together.

Perpetual Contracts and RWA—over the past year, the prices and performance of dividend stocks have been astonishingly high. Our goal is to support 24/7 trading, not just 9:30 to 16:00; near-instant finality, not T+1 or T+3; and tighter spreads with better performance. We want to leverage existing technology use cases to provide profitable differentiation for current market participants.

We are not trying to reinvent some new crypto primitives; we simply want to fulfill performance promises in a controlled, regulated, and tangible manner that enables traditional financial institutions to trust us and benefit from our technology. On-chain RWA, especially those leveraging the "renewable" narrative, are coming, and we hope that regulatory, KYC access to these products can succeed as promised by the historically "unregulated, unrestricted access."

Prediction Markets—the extraordinary nature of the DeFi summer was that it was our first taste of promises fulfilled. Direct participants received direct benefits. Enough retail capital flowed in, sustaining astonishing APY. For a time, the money printer was running madly for founders and retail users. Until it stopped running.

Today, we see meme tokens and prediction markets having similar hype, most of which are based on attention rather than any durable and underlying substance. We have been building prediction market infrastructure to enhance existing platforms, and have had some interesting conversations surrounding SonicVM and Sonic DB authorization. Both are commercially licensable products that can bring direct improvements and significant cost savings to the existing tech stack.

We are also building our own prediction market, more as a B2B go-to-market "Prediction Market as a Service" demo, which is a direction we are exploring, while also serving as a functional application layer. One that carries a slight commitment to direct involvement, reminding us of the DeFi spirit but not attempting to rebuild it in application layers. Monte Carlo simulations and pragmatic testing are underway.

Before I joined, I was already working on this, initially alone. I did not treat it as a side project but introduced it as a native Sonic application, as it can showcase far more about what this chain can do than I could describe in a letter. Super-local, super-social market. No white papers, no hype. Yes/No (tentative name) is currently in a closed beta on the Sonic testnet. We will soon open it for broader stress testing and publish registration details at that time.

Strategic Partnerships—significant time in these initial fifty days has been spent in conversations with investors from Asia, the Middle East, Europe, and North America. The most useful signal from these meetings isn't the level of interest or available support but rather the questions being asked have changed.

Two years ago, the questions were about exchanges and market makers. Today, the questions are about revenue lines, unit economics, regulatory posture, what our go-to-market (GTM) plan is, and who our distribution partners are. This is a harder conversation and a better conversation, and it is precisely the dialogue we want to have.

Some of these are long-cycle authorizations, the kind that supports the business rather than narrative-driven transactions; many investors have indicated a willingness to participate in Sonic's next phase of growth exactly under these conditions. Some will run validation nodes, helping to ensure network security, while others will bring distribution or market access in the aforementioned verticals. For us, this is clearly a better arrangement than a straightforward directional bet. We are very cautious in who we bring in and under what conditions, as the composition of the balance sheet is a strategic decision, not merely a financing decision.

The point I want to make is: the appetite is real, global, and depends on whether we deliver what is written in this letter: providing products that generate revenue and reporting honestly. Capital follows execution.

What does this mean for S? Someone reasonably asked me where the token fits within the overall landscape. The honest answer is: it is at the end of the sequence rather than the beginning. Buybacks, burns, fee sharing, flywheel mechanisms: none of these are hard to design, and all are easy to announce. What makes any of them real is revenue, because each ultimately is just a mechanism to direct revenue somewhere. Without revenue, they are merely funds transferred out of the treasury, disguised as value accumulation—and we have seen enough of this performance to know how it ends.

This is why there are no tokenomics announcements in this letter. Not because we haven’t thought about it, but because announcing it now is precisely the kind of "sugar-coated climax" this letter opposes. The order is: deliver products, generate revenue, then do routing allocation. When the aforementioned business units start generating revenue that we can point to, mechanisms to direct revenue to S holders will be designed and made public. Judge us by the first two items because they are the prerequisites that turn the third into an engineering problem rather than a marketing problem.

Heartfelt thanks to our hardworking tech team. We’re not there yet, but standing on the shoulders of giants means we can see the future we’re striving for. Thanks again to loyal Sonic diamond hands; I hope we can make you proud, and I still owe many of you a debt of gratitude for reaching out directly, lending a hand, and sometimes even a few encouraging words that make the daily challenges feel more surmountable. If I or others on the team have missed getting back to you, please let us know. It is not intentional; we are all trying hard, and the entire team is evolving.

Before I close, one more request:

If you think anything above is wrong or needs adjustment, please say so directly. From now on, these letters will come out quarterly, with more details added over time. If you can provide feedback directly, they will also be more useful to us. Please remember that we read and process every letter you send to [email protected].

Let’s stop here for now.

Matt Visser, CEO