Key Takeaways:
- Sonic is developing an algorithmic stablecoin offering up to 23.5% APR at $100M TVL, despite community concerns over similarities to the failed Terra ecosystem.
- Andre Cronje acknowledges the risks tied to algorithmic stablecoins, citing past trauma from Terra’s collapse but believes the new model is viable.
- Sonic, formerly Fantom, claims to be the fastest EVM chain with 720ms finality and has seen TVL jump 66% to $253M since rebranding.
The Sonic blockchain is advancing development of its algorithmic stablecoin, aiming to deliver high yields despite community concerns about risks reminiscent of the 2022 Terra-Luna collapse.
Unlike fiat-backed stablecoins, Sonic’s version uses code-based mechanisms to maintain price stability.
POC looks good. Yielding > 200% APR @ 10m tvl, around 23.5% APR @ 100m, steady at around 4.9% at 1bn+.
— Andre Cronje (@AndreCronjeTech) March 22, 2025
Will scale up and get team for a full release. https://t.co/JtMqzAkU7g pic.twitter.com/Z4j2aPzefB
Co-founder Andre Cronje recently revealed promising proof-of-concept results, showing potential APRs of over 200% at $10 million TVL, tapering to around 5% at $1 billion.
However, Cronje expressed hesitation, citing PTSD from TerraUSD’s failure, which once offered 20% APY but collapsed after losing its U.S. dollar peg—triggering a $40 billion meltdown.
Sonic, formerly known as Fantom, claims to be the fastest Ethereum-compatible blockchain, with transaction finality in just 720 milliseconds.
This speed was showcased in its September 2024 testnet, boosting interest and adoption.
Since rebranding, Sonic’s total value locked (TVL) has surged 66%, reaching $253 million.
Despite promising yield metrics, the project must overcome lingering skepticism around algorithmic stablecoins to ensure long-term confidence and avoid past mistakes.
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