Overview
Sonic is a next-gen liquid staking engine for LSDs on Ethereum that helps in the decentralization and diversification of stake across multiple LSD protocols, thereby strengthening the underlying network. Sonic is a permissionless spot and perpetuals exchange that leverages LSD tokens as the base asset against other assets such as fellow LSDs or native ETH. It concentrates liquidity in a single asset, ETH, thereby helping process near-instant and efficient redemptions for ETH-LSDs.
Since Sonic integrates LSDs at the protocol layer, it offers a minimum price guarantee for redemptions, which bolsters confidence in users wanting to exit their LSD positions during bear or illiquid markets.
With Sonic, users can easily swap their LSDs without the need for deep liquidity pools. This streamlined approach empowers users to diversify their LSD portfolios efficiently. In addition to selling or withdrawing staked assets, Sonic offers users the opportunity to leverage the protocol to buy desired LSDs at maximum discounts. By utilizing discounted sell orders, users can obtain the best rates for their desired LSDs during buy orders.
Sonic prioritizes the safety of user funds by implementing a rate change check. This mechanism utilizes time-based rate change estimation and determination to ensure the security and integrity of users' assets. By creating a two-sided market, Sonic caters to both individuals looking to stake and those seeking to unstake their assets. Stakers benefit from better pricing through discounted liquid tokens, while unstakers enjoy minimized time and fees associated with the process.
Single Asset Liquidity Pools​
Liquidity Pools operate on the basis of a solitary token denomination, predominantly ETH, leveraging the pooled liquidity to facilitate provision across the diverse spectrum of ETH-denominated liquid staking protocols.
Capital Efficiency​
A dynamic mechanism of supply and demand governs the allocation of assets within a pool, directing the interplay between the base token (e.g., ETH) and the array of supported LSD tokens. This ensures an earnings rate similar to the native staking yield of the network, while harnessing discounted fees derived from users exiting any of their ETH-LSD positions. As a result, it requires substantially lower capital compared to conventional decentralized exchanges when accommodating multiple tokens.
Discounted Staking Prices​
With Sonic, users can find competitive prices for both enterig and exiting LSD positions.
Improved Withdrawals​
Users benefit from the ability to exit any ETH-LSD positions on Sonic, thanks to Sonic's support for multiple LSD assets. Given Sonic's decentralized and capital-efficient orderbook engine, users do not suffer from any slippage losses (or worse, wait for the termination of unbonding periods) to retreive native assets.
Stake Diversification​
The protocol supports the diversification of stake across multiple LSD tokens and indices, thereby diversifying the stake to secure the system and protecting the users' LSD positions against a singular protocol's slashing or bank-run risks.
Competitive Yields​
SInce Sonic relies on reduced capital requirements and the automated balancing of pools based on the market conditions, it generates additional fees, which further enhance the overall returns for liquidity providers on the protocol.
Supported Liquid Tokens​
Sonic currently supports a range of liquid tokens such as csMatic, stMatic, stETH, rETH, and more. We are constantly expanding our supported tokens, with many exciting additions on the horizon. Each liquid token has its own characteristics and rules, specially applicable in the unbonding process. Sonic implements a specialized protocol for each of the supported liquid tokens enabling direct interaction with the original staking contracts, therefore not relying on liquidity pools for the swapping of liquid tokens for base tokens, but instead directly interacting with the staking contracts. This yields in capital efficiency benefits as lower fees are incurred, and there is no slippage, particularly beneficial for transactions with large amounts or in volatile market conditions.