The final time ICON (ICX) was making headlines, it was on the top of the ICO bubble when it was competing with Tron and Filecoin to purchase BitTorrent in a high-profile bidding warfare.
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 lately introduced that it has rebranded to SODAX and is migrating its total DeFi infrastructure from its personal Layer-1 blockchain to Sonic, an EVM-compatible community centered on high-speed, low-cost transactions.
Sonic itself is a product of a rebrand, shifting from the title Fantom in 2024.
In an interview with CoinDesk, ICON founder Min Kim defined the logic behind shifting from working an unbiased 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 every other infrastructure accessible,” Kim mentioned. “Immediately, shopping for and sustaining your personal Layer-1 property simply does not make sense anymore as a result of there are cheaper, higher choices accessible.”
Based on Kim, outsourcing infrastructure to Sonic permits his workforce to streamline bills and sharpen their strategic deal with 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 corporations as a result of corporations like Apple and Nvidia do not have their very own factories.
Equally, ICON now not must bear the excessive mounted prices and dangers related to working a complete blockchain.
“Sustaining a decentralized community with validators around the globe is a large enterprise,” Kim defined. “We’ve got eight years of expertise working our personal Layer-1. It is tedious, pricey, and really annoying. Outsourcing to Sonic permits us to deal with innovation and delivering merchandise that individuals 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 invaluable danger separation.
“There’s de-risking,” he defined. “If Sonic will get hacked, clearly it’s dangerous, nevertheless it’s indirectly our fault. Sonic focuses solely on safety and validator infrastructure, so we and different DeFi builders can deal with creating purposes 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 practically 99% from its all-time highs by late 2018, and has since not recovered, in accordance with CoinGecko information, as buyers moved towards platforms higher in a position to 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, considering an ecosystem would naturally construct itself. However that’s pricey and barely sustainable.”
Now rebranded as SODAX and centered on cross-chain liquidity merchandise, the challenge 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 movement 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 working Layer-1s will doubtless rethink as market cycles shift.
“Ethereum and Solana are nice examples as they’re totally centered on validators and community safety,” he mentioned. “We’re on the forefront of reversing the pattern of launching your personal 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 only deal with the product and never the infrastructure with ICON – now SODAX – main the way in which on this.
“We’re going again to fundamentals, decreasing our prices, streamlining operations, and doubling down on what we initially wished to do: put monetary merchandise immediately into folks’s palms.”
