Sonic Labs’ vertical integration fuels recovery in S token

Sonic (S), previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing on Thursday, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility. On the technical side, the outlook suggests further gains, targeting $0.070.

Sonic Labs announces shift from a gas-fee–centric value-capture model to a vertically integrated strategy

Sonic Labs, the team behind the high-throughput Layer 1, announced on Wednesday a shift from a gas-fee–centric Layer 1 value-capture model to a vertically integrated strategy.

This shift aims to build or acquire core applications and financial primitives to internalize key economic activity and to direct trading fees, protocol income, and application revenues to the S token, thereby increasing S token utility.

Against a backdrop of blockspace oversupply and ongoing fee compression, the team stated in a Wednesday X post that transaction fees alone are insufficient for sustainable value capture. 

The FeeM rolled out by Sonic last fall, which aimed to create token deflation by allowing app builders to capture up to 90% of the fees generated by their apps while burning the rest. This vertical integration will not replace the system but will reinforce it by redirecting fees to a system that rewards S token holders, the team said.

“As these revenue streams build, it will allow the Labs team to execute buybacks at sustainable rates,” the Sonic team noted.

Sonic’s native token S rose over 12% following the announcement on Wednesday and, as of Thursday, continues to trade 5% higher at $0.048.

Sonic Price Forecast: S shows early signs of recovery

On the daily chart, Sonic's price is trading at $0.048 as of Thursday. The 9-day Simple Moving Average (SMA) remains below the 50-day SMA, and both slopes are lower, keeping the broader bias bearish. However, S holds above the 9-day SMA at $0.044, while the 50-day SMA at $0.070 caps rebounds. A bullish crossover emerges as the Moving Average Convergence Divergence (MACD) line rises above the Signal line near the zero mark, with a nascent positive histogram hinting at improving momentum. The Relative Strength Index (RSI) sits at 39.80 and rises from earlier lows, but remains below 50.

The descending trend line from $0.213 limits gains, with resistance seen at $0.057. A daily close above that barrier could extend the recovery phase, whereas failure to clear it would keep sellers in control and leave the market vulnerable unless the price sustains above the short-term average.

(The technical analysis of this story was written with the help of an AI tool.)