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 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 not too long ago 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 unbiased blockchain to successfully outsourcing that a part of the operation to Sonic’s Layer-1 infrastructure.
“Back in 2017, we had to build our own Layer-1 because there wasn’t any other infrastructure available,” Kim stated. “Today, buying and maintaining your own Layer-1 property just doesn’t make sense anymore because there are cheaper, better options available.”
In keeping with Kim, outsourcing infrastructure to Sonic permits his staff to streamline bills and sharpen their strategic deal with DeFi merchandise.
“It significantly cuts our operating expenses by millions of dollars,” Kim instructed CoinDesk. “There’s less inflation for our tokens, and all of this just makes financial sense.”
This is not all that dissimilar from the manufacturing world. Foxconn and Taiwan Semiconductor are billion-dollar corporations as a result of companies like Apple and Nvidia do not have their very own factories.
Equally, ICON not must bear the excessive mounted prices and dangers related to operating a whole blockchain.
“Maintaining a decentralized network with validators around the world is a huge undertaking,” Kim defined. “We have eight years of experience running our own Layer-1. It’s tedious, costly, and very stressful. Outsourcing to Sonic allows us to focus on innovation and delivering products that people actually want.”
Kim additionally highlighted the chance discount advantages, noting that ICON’s DeFi layer can stay unaffected by infrastructure points at Sonic, making a beneficial danger separation.
“There’s de-risking,” he defined. “If Sonic gets hacked, obviously it’s bad, but it’s not directly our fault. Sonic focuses solely on security and validator infrastructure, so we and other DeFi builders can focus on creating applications closer to end-users.”
The technique comes as ICON seeks to reinvent itself amid diminished market affect. As soon as a high 20 cryptocurrency, ICON’s ICX token crashed almost 99% from its all-time highs by late 2018, and has since not recovered, in line with CoinGecko information, as buyers moved towards platforms higher capable of capitalize on the rise of DeFi and NFTs.
“Layer-1 infrastructure just doesn’t make sense for most projects,” Kim argued. “Many underestimated the effort, the capital expenses involved. There’s been a misguided premium investors placed on Layer-1 projects, thinking an ecosystem would naturally build itself. But that’s costly and rarely sustainable.”
Now rebranded as SODAX and targeted on cross-chain liquidity merchandise, the mission 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 allows 90% of transaction fees to flow back 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 presently operating Layer-1s will doubtless rethink as market cycles shift.
“Ethereum and Solana are great examples as they’re fully focused on validators and network security,” he said. “We’re at the forefront of reversing the trend of launching your own Layer-1s. It’s just not viable for most projects long-term.”
Because the period of premium valuations for proprietary Layer-1 platforms ends, extra tasks, Kim stated, are going to simply deal with the product and never the infrastructure with ICON – now SODAX – main the way in which on this.
“We’re going back to basics, lowering our costs, streamlining operations, and doubling down on what we originally wanted to do: put financial products directly into people’s hands.”
