Sonic’s ETF Allocation Update

Earlier this year, the Sonic community approved a governance proposal authorizing up to $50 million worth of $S to seed a potential US-listed ETF, as part of Sonic’s broader expansion into regulated US markets.

Execution Timing and Market Conditions

At the time governance approved the ETF allocation, execution was expected to follow shortly thereafter. However, during that window, broader market conditions deteriorated and $S pricing declined materially.

As a result, no tokens were minted under this authorization. Given unfavorable market conditions, Sonic Labs chose to pause execution and take a more measured approach.

This pause preserved flexibility and avoided issuing supply at levels that would not reflect the intent or spirit of the original governance decision. At current prices, minting the full $50M allocation as originally approved would require issuing over 600 million additional $S. This is not something that Sonic is entertaining.

Updated Execution Conditions 

To ensure alignment with token holder interests, Sonic Labs is committing to the following execution constraints:

• The ETF allocation will only be minted if $S is trading above $0.50 (a maximum of 100M tokens)
• Total value minted is strictly capped at $50M, with a strong preference for issuing fewer tokens at higher prices
• No execution will occur outside these parameters

ETF Mechanics and Market Impact

It’s important to clarify how ETF seeding works.

Any $S allocated to seed a regulated ETF would be locked within the product itself. These tokens do not enter open-market circulation, do not increase liquid supply, and do not create additional sell pressure. They remain owned by Sonic and exist solely to provide the structural foundation and initial liquidity required for a regulated investment vehicle.

Long-Term Strategy

The strategic value of a US-listed ETF remains unchanged. A regulated ETF provides institutional investors, RIAs, and family offices with a compliant on-ramp to Sonic exposure, expanding access without compromising the network’s economic integrity.

Any future execution, adjustment, or refinement of this allocation will follow clear communication and established governance processes.

Our priority remains unchanged: protecting long-term network health while building durable pathways for institutional participation.