The post Sonic Labs pursues vertical integration to enhance S Token utility appeared on BitcoinEthereumNews.com.

Sonic Labs wants its Layer 1 network to start generating value for the S token rather than hosting activity that primarily benefits external applications.  The blockchain development entity (formerly the Fantom Foundation) posted an article on X titled “Vertical Integration: The Missing Link in L1 Value Creation,” where it explained that it wants to strengthen its token and keep revenue inside the Sonic network. Sonic Labs builds key products to keep more value within the Sonic network Sonic Labs’ theory is that they need more people to use the chain for transactions, which will generate more gas fees and strengthen its token over time. The only problem is that many other blockchains have cheaper fees, so the “gas fees only” model won’t create lasting value in return. The company says a blockchain can host a popular app with millions of users, but the chain’s own token may still not benefit as much. Sonic used Polymarket as an example because it became one of the largest prediction apps on Polygon, but most of the profits remain within the application rather than the base-layer token. According to the blockchain development company, such a situation creates value leakage from the chain because external teams will build apps, earn revenue, and take it with them. The company argues that Layer 1 networks struggle to create lasting value, even if they host a lot of activity. To prove its point, the company made up a scenario in which an external, decentralized exchange builds on a chain and earns $2 million per year, yet the chain collects only $15,000 in gas fees, which is less than 1% of the total value.  Sonic then said that if they built or owned an integrated exchange directly within its ecosystem, they could retain the same $2 million within its…

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Filed under: News - @ February 12, 2026 2:26 am