The rise of Sonic

In my previous post I touched upon why I'm still very bullish on Sonic and those who have been following me for longer know that i've been very invested into Fantom and now Sonic and its ecosystem. Some may say I'm a Sonic maxi but that's not entirely the case. The term maxi implies to a certain extent that people only see the good things and disregard the things they don't like to see. That's not the case for me. Focusing the majority of my efforts on Sonic is based on the analysis that the tech, innovation and community is superior to that of other L1 blockchains. These fundamentals lay the basis for (financial) growth and that's exactly what we see right now.

One of the fundamental indicators for the underlying value of a blockchain is TVL (Total Value Locked). TVL is a key metric for gauging the health and popularity of a blockchain or DeFi project. A higher TVL generally indicates greater user confidence and participation in the platform. It can also be a measure of the liquidity of the blockchain, which is essential for development of new projects, innovation, trading and other operations. TVL is used to help determine the growth of the DeFi ecosystem and that's exactly what we're going to do today!

For those not familiar with the subject of TVL; a bit of background 💡
TVL represents the total value of cryptocurrency assets that are currently locked within a DeFi protocol or platform. Although I think the term "locked" is a bit misleading and may sound scary to some it's nothing more than putting your digital assets in a certain contract for a specified amount of time. In return you'll get a reward in the form of yield or take out a loan, whatever the purpose of your locking is. The "locked" assets can always be "unlocked" after the set period or even earlier for a certain penalty. People can lock assets for various reasons the most important being:

• Staking: Committing assets to support the operation of a blockchain.
• Liquidity provision: Depositing assets into liquidity pools to facilitate trading.
• Lending and borrowing: Locking assets as collateral for loans.
• Yield Farming: locking assets to gain rewards.

So what's the TVL growth on Sonic?

It's insane. Although strong growth was to be expected with a new L1 chain that offers a speed of 10,000 transactions per second (TPS), sub-second finality (720 ms has been recorded), and a native, secure gateway to Ethereum, the actual TVL growth numbers are none other than impressive. At the moment of writing this post the TVL is $675 million and Sonic is sitting on the 13th place of the DeFiLlama leaderboard for chains.

Chart 1: TVL of Sonic as shown by DeFiLlama

No matter the market; people keep locking.
Let's give this figure a bit of context. Sonic was launched on the 16th of December 2024 and reached a TVL of $27M on the 1st of January 2025. The 1st of February this number increased to $289M and as of 1st of March the TVL is sitting at $675M. And yes, that's after the strong dip we saw in the markets this week! The dollar value of TVL is obviously linked to the price of S. Although the current price of S dipped more than 40% compared to the moment the highest TVL of Sonic was measured in February at $736M the TVL only dropped 9%. This means that people keep locking S no matter the market situation. This is one of the reasons why S showed so much strength during the previous dips and bounces back the quickest.

Sonic versus other chains
The TVL growth of Sonic is even more impressive when compared to that of other chains. Take for example Sui. Sui was launched on the 6th of May 2023 and reached a TVL of $680M on 27th of march 2024. It took SUI 326 days to reach the same TVL as what Sonic did in 67 days. Sui is currently sitting on the 9th place of the DeFiLlama leaderboard with a TVL of $1.3B but at this rate it won't take long until Sonic comes blasting past it.

Or let's take Avalanche which was launched on February 4, 2021. It took Avalanche 198 days to reach a $680M TVL but since we were in the DeFi boom at that time it immediately skyrocketed to a peak TVL of more than $11B within a few months. Something that could also be possible for Sonic. The current TVL of Avalanche is $1.11B.

When comparing to Cardano. Well, there's not a lot to compare at the moment because Sonic already surpassed Cardano in terms of TVL and is showing much more activity.

With the current growth rate we will see the total TVL of Sonic surpass $1B this month (march 2025) and probably overtake Avalanche and Sui for a top 7 spot in the DefiLlama leaderboard.

Where is the liquidity coming from?

So we know that the TVL and liquidity on Sonic is rising quickly but where is that liquidity coming from? A useful tool to gain more insight into that is the analytics page from debridge finance. A bridge that I use frequently as well. In the following chart I've extracted the liquidity flow of debridge finance over the last 30 days to Sonic. From this chart it becomes visible that most of the flow came from Solana, followed by Base, Ethereum and Arbitrum.

One of the reasons I think that many users are bridging from Solana to Sonic is because Solana has become synonym to memecoin rugs and people are getting tired of it. The insider trading, many scams, and frequent downtime of the chain is hurting its reputation and users are looking for alternatives. Data from Pump.fun and Meteora back this claim with a strong decrease in newly issued tokens over the last few weeks. Sonic offers a brand new chain with higher transaction speeds and no downtime. At least for now the amount of scams is severely lower than on Solana (lets's keep it that way) plus with all the inflows the price of S has outperformed that of Sol. This creates what I call a liquidity blackhole where large flows from various chains makes S outperform other blockchains which will then attract even more liquidity and so on. It's a winner takes it all type of market.

This is also one of the reasons why we see so many inflows from Ethereum. The price of Ethereum has been stagnant for a while and that creates difficult times for developers and investors. Eventually people will look for alternatives and at this moment Sonic is the best alternative.

Fundamentals for liquidity

It's not all about being a new chain. You do need to offer something new or make existing concepts better. Sonic does BOTH! Not only offers the Sonic blockchain higher TPS (transactions-per-second) levels and shorter TTF (time-to-finality) than any other blockchain, it's also fully EVM compatible and has a native bridge between Ethereum and sonic, allowing for the safe transfer of assets.

Although these characteristics are already impressive it's also very important to create a thriving ecosystem of dApps that actually utilize the capabilities of Sonic. To ignite that, the Sonic-foundation took a 3-way approach. First of all they created partnerships with large defi-protocols such as AAVE, second, the Sonic foundation provided grants to developers who have a great idea for a dApp, and third - I think this is the best one - Sonic created what they call Fee Monetization (aka FeeM). FeeM allows developers to earn up to 90% of the gas fees interacting with their dApp. This creates a new recurring revenue model for developers.

Normally developers need to rely on a presales, token-taxes or trading-fees from their token but with FeeM developers now have a revenue model that allows them to stay away from token taxes and also create dApps that are not reliant on trading fees. This is game changer and true accelerator for innovation.

Last but not least; Andre Cronje is fully dialed in and absolutely driven to make Sonic THE BEST DeFi-chain available and it's hard to compete with that. Developers want to join that revolution and the more the ecosystem grows the more users and liquidity it will attract. It's the liquidity blackhole in full spin!

I didn't even touch upon the Sonic airdrop points system they created but you get the gist. I have to admit that the Sonic foundation created a strong flywheel that is getting stronger by the day!

For those interested in actual app revenue I took a quick snapshot of the current app revenues of today (4th of march 2025) of Avalanche, Sui and Sonic from DeFiLlama.

Avalanche
App revenue: $167.439
24h volume: $220,43M
Sui
App revenue: $110.486
24h volume: $346,65M
Sonic
App revenue: $266.132
24h volume: $120,79M

From these figures you can see that with a lower volume (mostly due to lower TVL) the app revenue on Sonic is actually higher! The more developers can earn on a specific chain the more they are incentivised to develop and migrate to Sonic.

Price targets

Most of you will probably think; that's a nice story David but what are the price targets for Sonic? Wen Lambo?💵💵 Ok, let's have a look and create some reasonable price targets for the mid- to longterm based on benchmarking with other blockchains.

The following is obviously not financial advice. I'm merely sharing my thoughts regarding potential price targets for Sonic.

For my Dutch readers who have been following me for a while on YouTube know that I have a price target for Sonic for already more than a year between $5-7. However, I made those targets when Sonic was still Fantom and purely based on the Fantom chart at that time. Since Sonic is now live and we're really experiencing the strength of the chain and it's ecosystem it seems that I may have undervalued the potential of Sonic with a price target of $5-7. Yes, really.

With a current price of Sonic at $0,55 (yes, we just had a massive dip) a $5-7 target would already yield a 10x! But it may become even better.

Lets see what the current price of Sonic would be, if the marketcap would be equal to that of competing blockchains. 💡

The current marketcap of Sonic is $1.8B. There is a great tool called MarketCapOf that let's you calculate the price of one blockchain with the marketcap of another blockchain based on either the current or all-time-high prices. Below I have made a short list of the price of Sonic with the marketcap of other blockchains based on both the current and all-time high prices.

Price of Sonic with the current marketcap of Cardano: $10,59 (18.82x). Please note that the Sonic already surpassed the TVL of Cardano! Cardano has a marketcap of $32.8B based on the circulating supply. Ok, I can't resist. At the ATH valuation of cardano the price of Sonic would $29.92(52.50x)!

Price of Sonic with the current marketcap of Avalanche: $2.64(4.63x). As mentioned earlier Avalanche currently has a TVL of $1.1B and I think Sonic will overtake that this month (March). Price of sonic compared to the ATH of Avalanche: $9.49(16.64x)

Price of Sonic with the current marketcap of Sui: $2.52(4.42x). Sui has a current TVL of $1.3B and is sitting on the eight place on the DeFiLlama leaderboard. Also for Sui I think it won't take long before Sonic will overtake that spot on the leaderboard. Comparing the price of Sonic to the ATH marketcap of Sui will bring the price of Sonic to $5.03(8.82x).

And now the big one, we can be ambitious here. The price of Sonic with the current marketcap of Solana: $22.90(40.17x). Granted, Solana currently has a huge TVL of $7B due to dominating the meme hype this season. Sitting on the 2nd place of the TVL leaderboard on DeFiLlama - just behind the number 1; Ethereum - it won't be easy to overtake that. Comparing the price of Sonic to the ATH marketcap of Solana would shoot the price of Sonic into the stratosphere at $40.20(70.49x)! 🚀

Looking to these comparisons we can conclude a few things:

• The current price of Sonic at around $0,56 is severly undervalued. Comparing the price of Sonic to the most nearby chains (Avalanche and Sui) would put Sonic currently at $2+ and more precisely around $2.5.
• Looking for a price target this season, it appears that my initial $5-7 is very conservative and a $10 price target even more reasonable. Although slightly ambitious a price target between $10-12 is very possible.

Let me know what you think about Sonic, it's ecosystem and your pricetarget in the comments below! 👇

Until next time!