Sonic price has held steady in the past few days as its ecosystem growth gained steam. The S token was trading at $0.50 on Tuesday, up by 35% from its lowest level this month, giving it a market cap of over $1.47 billion.
Sonic ecosystem growth is continuing
Sonic, a recently rebranded blockchain network, has become one of the fastest-growing players in the crypto industry.
It was rebranded from Fantom, a network that was associated with Andre Kronje, one of the most popular developers. Kronje currently leads Sonic Labs and is best known for being the creator of Yearn Finance, a top play
Sonic has become popular among developers and users in the past few months. This popularity is mostly because of its significantly lower fees than other layer-1 chains.
Sonic also introduced an innovative fee monetization program that has rewarded developers. This model returns about 90% of all the fees that their app generates on the chain, with the remaining 10% going to the validators.
This model has helped it to attract developers on the network. It has attracted 116 developers in the DeFi industry, with the total value locked (TVL) rising by 24% in the last 30 days to $1 billion.
DeFi dApps on the Sonic blockchain are more than other networks that have been around for years. For example, Tron has only 35 dApps, while Sui and Aptos have less than 60 each. Cardano, one of the biggest players in the crypto industry, has 45 apps. The top dApps on the Sonic blockchain are AAVE, Silo Finance, Beets, Veda, and Pendle.
Read more: Top cryptocurrencies to watch: Sonic, XRP, Cardano, Solana
More data shows that Sonic’s growth is accelerating. For example, it has over $543 million in stablecoins, most of which are USD Coin. This makes it a top chain in the USDC issuance, a notable achievement since it was launched a few months ago.
At the same time, the number of transactions on Sonic has jumped to over 852k, up from 358k in its lowest point in March.
Sonic price analysis: is it a safe buy?
Sonic token has underperformed the market even after its strong ecosystem growth. One reason for this is that existing holders expect to be highly diluted in the coming months.
That’s because Sonic launched with a supply of 3.175 million tokens. This supply will increase by 6% in June, with the newly minted tokens going to Fantom Opera and Sonic users. This airdrop will have a burning mechanism that will reduce the supply count over time.
The developers will also mint additional tokens this year, with the new cash going towards growing the team, marketing, and increasing the S adoption. Sonic will mint 47,625,000 tokens annually for six years. The caveat is that Sonic will burn any unused tokens during the year.
Sonic price analysis
S price chart | Source: TradingView
The four-hour chart shows that the Sonic token price has bounced back a bit in the past few days. This rebound happened after the token bottomed at $0.3803 earlier this month.
Sonic has formed a double-bottom pattern at $0.4088, and a nekline at $0.6327, its highest level on March 26. The token has moved slightly above the 50-period moving average and formed a bullish flag pattern. It has also formed a small inverse head and shoulders pattern.
Therefore, the Sonic price will likely have a strong bullish breakout, with the next point to watch being at $0.6327, up by 23% from the current level. A drop below the support at $0.50 will invalidate the bullish outlook.
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