Sonic Labs passes $150 million proposal to expand into US capital markets

Blockchain firm Sonic Labs passed a governance proposal on Sunday evening that would allow the company to fund its expansion into the U.S. capital markets.

The Aug. 20 proposal, titled "U.S. Expansion and TradFi Adoption," authorizes Sonic Labs to issue $150 million worth of its native token to support the initiative. The proposal passed with near-unanimous backing, securing a 99.98% approval.

The proposal outlined the company's plan to partner with a "top-tier" exchange-traded fund provider to launch a regulated ETF tracking its native S token. Sonic Labs is expected to allocate $50 million to seed liquidity and fund operations.

The company's proposal also designated a $100 million investment for a Nasdaq private investment in public equity (PIPE), which would create a strategic reserve for a Nasdaq-listed vehicle.

The reserve would be used to purchase S tokens on the open market and over-the-counter trades, likely enhancing Sonic Labs and S cryptocurrency's presence and credibility in the traditional finance market. Tokens are designed to be locked for a minimum of three years.

Lastly, Sonic Labs is establishing a U.S. entity, Sonic USA, and hiring regional executives, with a focus on regulatory compliance and partnerships. The company said it will issue 150 million S tokens to support Sonic USA's operations, separately from the $150 million issuance for the first two initiatives, Sonic Labs confirmed with The Block.

"The focus is to drive adoption and growth and lead engagement in Washington D.C.," the proposal said. "The Sonic Labs team has already structured a Delaware entity (Sonic USA LLC) which is ready to leverage and act as a home base for this new entity."

The initiative came as a response to the "continuous increase of institutional demand" from the U.S. for the S token, the proposal stated.

Outside the U.S. expansion, Sonic Labs proposed updating its tokenomics to adjust fee distribution, including gas fee burns, aiming to make the token ecosystem more deflationary. 

Sonic Labs focuses on the growth of EVM-compatible Layer 1 blockchain Sonic. It launched the S cryptocurrency in August 2024, following its rebranding from the Fantom Foundation.

The cryptocurrency's current market cap stands at $892.36 million, priced at $0.31, according to CoinMarketCap data.

Story updated to include Sonic Labs' confirmation that the 150 million S issuance for the U.S. entity will be made separately from the $150 million issuance.