The final time ICON (ICX) was making headlines, it was on the peak of the ICO bubble when it was competing with Tron and Filecoin to purchase BitTorrent in a high-profile bidding struggle.
ICON, as soon as heralded because the “Korean Ethereum,” peaked early in 2018 however later struggled to retain relevance amid fierce competitors and a altering narrative.
Now, ICON is again within the information, because it just lately introduced that it has rebranded to SODAX and is migrating its complete DeFi infrastructure from its personal Layer-1 blockchain to Sonic, an EVM-compatible community targeted on high-speed, low-cost transactions.
Sonic itself is a product of a rebrand, shifting from the identify Fantom in 2024.
In an interview with CoinDesk, ICON founder Min Kim defined the logic behind shifting from operating an impartial blockchain to successfully outsourcing that a part of the operation to Sonic’s Layer-1 infrastructure.
“Again in 2017, we needed to construct our personal Layer-1 as a result of there wasn’t another infrastructure accessible,” Kim mentioned. “In the present day, shopping for and sustaining your individual Layer-1 property simply does not make sense anymore as a result of there are cheaper, higher choices accessible.”
In keeping with Kim, outsourcing infrastructure to Sonic permits his crew to streamline bills and sharpen their strategic give attention to DeFi merchandise.
“It considerably cuts our working bills by hundreds of thousands of {dollars},” Kim advised CoinDesk. “There’s much less inflation for our tokens, and all of this simply makes monetary sense.”
This is not all that dissimilar from the manufacturing world. Foxconn and Taiwan Semiconductor are billion-dollar firms as a result of corporations like Apple and Nvidia do not have their very own factories.
Equally, ICON not must bear the excessive fastened prices and dangers related to operating a whole blockchain.
“Sustaining a decentralized community with validators around the globe is a large enterprise,” Kim defined. “We’ve eight years of expertise operating our personal Layer-1. It is tedious, expensive, and really annoying. Outsourcing to Sonic permits us to give attention to innovation and delivering merchandise that folks truly need.”
Kim additionally highlighted the chance discount advantages, noting that ICON’s DeFi layer can stay unaffected by infrastructure points at Sonic, making a helpful danger separation.
“There’s de-risking,” he defined. “If Sonic will get hacked, clearly it’s dangerous, but it surely’s in a roundabout way our fault. Sonic focuses solely on safety and validator infrastructure, so we and different DeFi builders can give attention to creating functions nearer to end-users.”
The technique comes as ICON seeks to reinvent itself amid diminished market affect. As soon as a prime 20 cryptocurrency, ICON’s ICX token crashed almost 99% from its all-time highs by late 2018, and has since not recovered, in response to CoinGecko information, as buyers moved towards platforms higher capable of capitalize on the rise of DeFi and NFTs.
“Layer-1 infrastructure simply does not make sense for many tasks,” Kim argued. “Many underestimated the hassle, the capital bills concerned. There’s been a misguided premium buyers positioned on Layer-1 tasks, pondering an ecosystem would naturally construct itself. However that’s expensive and infrequently sustainable.”
Now rebranded as SODAX and targeted on cross-chain liquidity merchandise, the venture is migrating ICX tokens to a brand new token, SODA. Whereas Sonic and SODAX’s tokens stay distinct, Kim emphasised that Sonic’s fee-monetization mechanisms will channel transaction charges again to SODA holders.
“Sonic permits 90% of transaction charges to stream again to SODA token holders,” Kim famous, underscoring the financial incentive of their strategic pivot.
Requested if this outsourcing mannequin represents a broader pattern, Kim predicted that many tasks at present operating Layer-1s will probably rethink as market cycles shift.
“Ethereum and Solana are nice examples as they’re absolutely targeted on validators and community safety,” he mentioned. “We’re on the forefront of reversing the pattern of launching your individual Layer-1s. It’s simply not viable for many tasks long-term.”
Because the period of premium valuations for proprietary Layer-1 platforms ends, extra tasks, Kim mentioned, are going to simply give attention to the product and never the infrastructure with ICON – now SODAX – main the way in which on this.
“We’re going again to fundamentals, reducing our prices, streamlining operations, and doubling down on what we initially wished to do: put monetary merchandise immediately into folks’s fingers.”
