{"id":12810,"date":"2025-11-28T15:32:46","date_gmt":"2025-11-28T15:32:46","guid":{"rendered":"https:\/\/cryptonewsdesk.com\/?p=12810"},"modified":"2025-11-28T15:32:50","modified_gmt":"2025-11-28T15:32:50","slug":"speed-isnt-enough-anymore-sonic-labs-ceo-says-layer-1-chains-must-focus-on-retention-real-value-and-sustainable-models","status":"publish","type":"post","link":"https:\/\/cryptonewsdesk.com\/index.php\/2025\/11\/28\/speed-isnt-enough-anymore-sonic-labs-ceo-says-layer-1-chains-must-focus-on-retention-real-value-and-sustainable-models\/","title":{"rendered":"Speed Isn\u2019t Enough Anymore\u201d: Sonic Labs CEO Says Layer-1 Chains Must Focus on Retention, Real Value, and Sustainable Models"},"content":{"rendered":"\n

As competition among blockchains intensifies, Sonic Labs CEO Mitchell Demeter<\/strong> says the old playbook for Layer-1 networks focusing on speed and low fees no longer works. In a new interview with crypto.news<\/em>, Demeter explains how blockchains can stay relevant in a world where block space is abundant and builders have more options than ever.<\/p>\n\n\n\n

\u201cFast and cheap isn\u2019t a differentiator anymore\u201d<\/strong><\/h2>\n\n\n\n

Demeter says that between 2020 and 2021, Layer-1 chains could stand out simply by being faster than Ethereum or offering cheaper fees. That advantage has evaporated.<\/p>\n\n\n\n

\n

\u201cBlock space has become commoditized. Now the real battle is retaining developers, attracting users, and giving them a reason to stay.\u201d<\/p>\n<\/blockquote>\n\n\n\n

Demeter, who stepped in as CEO just two months ago, says Sonic is shifting its strategy toward long-term builder retention through protocol-level improvements and Ethereum Improvement Proposal (EIP) enhancements.<\/p>\n\n\n\n

Protocol Changes: Bigger Smart Contracts, Better Builder Experience<\/strong><\/h2>\n\n\n\n

Demeter says smaller chains can move quickly where Ethereum can\u2019t\u2014experimenting with EIPs that would take years to implement on ETH.<\/p>\n\n\n\n

One major example is EIP-7903<\/strong>, which aims to increase the maximum smart contract size beyond the current ~49 KB limit.<\/p>\n\n\n\n

\n

\u201cBigger contract sizes allow developers to build more complex apps. The more they build, the harder it becomes to move their entire stack elsewhere. That’s real ecosystem stickiness.\u201d<\/p>\n<\/blockquote>\n\n\n\n

He says Sonic\u2019s engineering team is reviewing multiple EIPs and consulting directly with builders to shape its roadmap.<\/p>\n\n\n\n

Fixing Tokenomics: \u201cUsage \u2192 Fees \u2192 Burns \u2192 Value Returned\u201d<\/strong><\/h2>\n\n\n\n

Demeter says users today want real value creation<\/strong>, not hype cycles. Sonic is restructuring its fee system to reflect that.<\/p>\n\n\n\n

Currently:<\/p>\n\n\n\n

    \n
  • 90% of fees go to builders<\/strong><\/li>\n\n\n\n
  • 10% to validators<\/strong><\/li>\n\n\n\n
  • 0% to token holders<\/strong><\/li>\n<\/ul>\n\n\n\n

    This model improves usability but doesn\u2019t create scarcity for token holders.<\/p>\n\n\n\n

    Sonic is now working on a sliding-scale fee model<\/strong>, where:<\/p>\n\n\n\n

      \n
    • Builders get ~15%<\/li>\n\n\n\n
    • Validators get 10%<\/li>\n\n\n\n
    • The majority is burned<\/strong><\/li>\n<\/ul>\n\n\n\n
      \n

      \u201cYou move from inflation to deflation. Increased usage must translate into value returning to token holders.\u201d<\/p>\n<\/blockquote>\n\n\n\n

      He compares the shift to tech companies like Tesla, which moved from raising capital via issuance to buybacks once they matured.<\/p>\n\n\n\n

      Using Sonic\u2019s Tech Beyond Its Own Chain<\/strong><\/h2>\n\n\n\n

      Sonic is exploring licensing its blockchain technology to:<\/p>\n\n\n\n

        \n
      • Exchanges<\/li>\n\n\n\n
      • Governments<\/li>\n\n\n\n
      • Banks<\/li>\n<\/ul>\n\n\n\n

        Revenue from licensing would be used for token buybacks and burns<\/strong>, strengthening the ecosystem.<\/p>\n\n\n\n

        \n

        \u201cWe\u2019ve spent seven years building world-class tech. Now it\u2019s about turning that into a sustainable business.\u201d<\/p>\n<\/blockquote>\n\n\n\n

        Competing With Ethereum and Layer-2s<\/strong><\/h2>\n\n\n\n

        Demeter says Layer-2s are ultimately tied to Ethereum, while Sonic operates with its own validator set<\/strong>, giving it more flexibility to innovate rapidly.<\/p>\n\n\n\n

        On public goods funding, he says Sonic is exploring options but prefers sustainable business models over grant-driven approaches.<\/p>\n\n\n\n

        Demeter\u2019s First Priorities as CEO<\/strong><\/h2>\n\n\n\n

        His immediate focus included:<\/p>\n\n\n\n

          \n
        • Overhauling tokenomics<\/li>\n\n\n\n
        • Building a sustainable grants model with VC partners<\/li>\n\n\n\n
        • Expanding Sonic beyond a tech-focused culture into a full business operation<\/li>\n\n\n\n
        • Growing marketing, BD, communications, and institutional relationships<\/li>\n<\/ul>\n\n\n\n
          \n

          \u201cThe industry is maturing. We can\u2019t rely on narratives anymore. We need real businesses.\u201d<\/p>\n<\/blockquote>\n\n\n\n

          State of the Crypto Market: \u201cMost of the pain is behind us\u201d<\/strong><\/h2>\n\n\n\n

          Demeter believes the crypto industry is transitioning into a more sustainable phase:<\/p>\n\n\n\n

          \n

          \u201cLiquidity is tight, investors are more sophisticated, and builders have more options. But I think most of the pain is behind us. When liquidity returns, it will be fundamentals-based, not speculation-based.\u201d<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

          As competition among blockchains intensifies, Sonic Labs CEO Mitchell Demeter says the old playbook for Layer-1 networks focusing on speed and low fees no longer works. In a new interview with crypto.news, Demeter explains how blockchains can stay relevant in a world where block space is abundant and builders have more options than ever. \u201cFast…<\/p>\n","protected":false},"author":3,"featured_media":12815,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[73,63],"tags":[65,464],"class_list":["post-12810","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain","category-crypto-news","tag-crypto","tag-layer-1"],"yoast_head":"\nSpeed Isn\u2019t Enough Anymore\u201d: Sonic Labs CEO Says Layer-1 Chains Must Focus on Retention, Real Value, and Sustainable Models - Crypto News<\/title>\n<meta name=\"description\" content=\"Sonic Labs CEO Mitchell Demeter says Layer-1 blockchains must move beyond competing on speed and fees, shifting toward developer retention, sustainable tokenomics, and long-term value creation. 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