I’d like to preface this by stating that this is in no means financial advice, nor is it meant to criticize the decentralized application in discussion. The following article is a collection of objective observations (of which have been objectively reviewed by the Sonic Foundation) in regards to the Accumulator Neurons SNS Voting Criteria, which can be found in the resources below.
Resources
Accumulator Neuron SNS Voting Criteria
SNS Proposal Discussion
Protocol Documentation Relevant to Analysis
Protocol Abstract
Sonic is a Decentralized Exchange (DEX), aiming to provide a set of protocols enabling the development, issuance, and trading of various financial products.
Analysis
Main Net dApp
Is the dApp live and operational? Has the development team demonstrated technical competence specifically regarding the Internet Computer Protocol?
Yes, the Sonic dApp has been live & operational for over 2 years, making it one of the Internet Computer’s first DEXes. The Sonic dApp is available below:
As such, I believe it is reasonable to say the Sonic Foundation has exemplified exceptional technical competence in relation to the Internet Computer Protocol.
Is the dApp fully on-chain, meaning both the front end and back end of the protocol are hosted in Canister smart contracts?
Yes, the Sonic dApp is completely on-chain within the following canisters:
- 3xwpq-ziaaa-aaaah-qcn4a-cai (sonic swap)
- eukbz-7iaaa-aaaah-ac5tq-cai (sonic frontend)
- fxgi7-lqaaa-aaaah-ac5va-cai (sonic analytics)
- utozz-siaaa-aaaam-qaaxq-cai (wicp)
- aanaa-xaaaa-aaaah-aaeiq-cai (xtc)
- lfzsk-7qaaa-aaaah-adk2q-cai (sonic lbp beta)
Does the dApp rely on third-party dependencies, such as off-chain providers, fee-gated APIs, or other mechanisms that rely on intermediaries? If so, is there a plan to transfer these dependencies to Canisters and the SNS? Additionally, is there a plan to fund these mechanisms independently, without solely relying on the SNS Treasury?
Sonics API Dependencies are seemingly not transparent, although I believe it is reasonable to assume that there is at the very least a Trading View API, given the real-time market feed within the Sonic Homepage.
Can the dApp, in its current form, be considered a complete product that fulfills its intended purpose? If the development team were to suddenly stop building, would the dApp still be able to function and achieve its objectives?
I believe in its current form, it is reasonable to say that Sonic fulfills its purpose as a DEX.
However, with this being said, Sonic has ambitious goals to provide synthetic perps, EVM support, Liquid Staked ICP tokens (xICP), and more - of which are not yet available within the platform & must undergo further development.
With this being said, if the founding team stopped development, while I do believe the dApp would continue to function, I do not believe it’s reasonable to say that it would fulfill its objectives.
Protocol Overview
Is the protocol open source?
Of the previously listed 6 Canisters, only 3 of which are open source, being the Sonic Swap Canister, the Sonic Frontend Canister & the Sonic Analytic Canister.
These canisters can be referenced below:
- 3xwpq-ziaaa-aaaah-qcn4a-cai (sonic swap)
- eukbz-7iaaa-aaaah-ac5tq-cai (sonic frontend)
- fxgi7-lqaaa-aaaah-ac5va-cai (sonic analytics)
Has the team provided a clear white paper that details the protocol comprehensively? Additionally, is there technical documentation available that explains the underlying mechanisms, functionalities, and concepts of the protocol?
Yes, the Sonic Foundation has provided an in-depth overview of the white paper, detailing the necessity of decentralized finance, the state of the market, a comprehensive understanding of the platform, the future direction of the protocol, the utility of tokens, and the team itself.
Furthermore, the Sonic Foundation has also provided extensive technical documentation, enabling ease of on-boarding for future alternative contributors to the Sonic dApp, or those of which who wish to utilize the Sonic API.
Is there an insightful overview of the tokenomics provided? Is token allocation responsible & proportionate?
Yes, the Sonic Foundation has provided an extensive overview of the tokenomics of the protocol, as well as token distribution allocations post-SNS.
Sonic Tokens are currently allocated as follows:
Trading Rewards - 25%
Decentralization Sale - 21%
Team - 14.5%
Treasury - 12.3%
Future Funding - 10%
LP Rewards - 7.5%
Acquisition - 4%
LBP Pool - 3.7%
Community Seed - 2%
Airdrop - 1%
This can be further broken down into three categories; Protocol, Community, Insiders.
Protocol - 54.8%
Trading Rewards - 25%
Treasury - 12.3%
Future Funding - 10%
LP Rewards - 7.5%
Community - 27.7%
Decentralization Sale - 21%
LBP Pool - 3.7%
Community Seed - 2%
Airdrop - 1%
Insiders - 18.5%
Team - 14.5%
Acquisition - 4%
(It should be noted that the team, Psychadelic, that Sonic was acquired from, resulting in this 4% allocation, no longer has affiliation with the Sonic dApp)
As such, no, I can not agree that the token allocation is fair & proportionate, as the “Insiders” will receive 66% of tokens in proportion to the “Community”, while receiving 88% of tokens in proportion to what is sold within the decentralization sale.
Has the team articulated why the SNS is the ideal decentralization solution for their application at this time?
While the Sonic Documentation does review the general necessity of an SNS sale, being;
“A Service Nervous System, or SNS, enables a service to run under the control of a decentralized community, allowing the dapp or service to perform community-based fundraising and gain the censorship resistance needed for advanced tokenization”
I can not agree that the Sonic Foundation has articulated why they believe an SNS Sale is the right fit for their dApp at this point in time within official documentation.
Is the team publicly known within the ecosystem? Do they have a visible presence in the crypto community or relevant industry events?
Yes, the Sonic Foundation is known & has a public presence within the Internet Computer ecosystem. The dApp has been live for over two years and is a pillar within the DeFi ecosystem.
The official Sonic twitter can be found below:
https://x.com/sonic_ooo?s=21&t=p9K9YrK2DF2OD_cPX2QYTA
Is the team’s dynamic transparent? Do team members openly communicate and collaborate with the community?
Yes, I believe it is reasonable to say that the teams dynamic is transparent, as the members of the Sonic Foundation & their roles can be referenced within the “Team” section of the Whitepaper.
Furthermore, I believe it is beyond reasonable to say that this team actively collaborates & communicates with the community, as depicted by the following Sonic Affiliated accounts:
https://x.com/sonic_ooo?s=21&t=p9K9YrK2DF2OD_cPX2QYTA
https://x.com/cakemakerone?s=21&t=p9K9YrK2DF2OD_cPX2QYTA
https://x.com/bugslayer27?s=21&t=p9K9YrK2DF2OD_cPX2QYTA
https://x.com/billionmathew?s=21&t=p9K9YrK2DF2OD_cPX2QYTA
What is the team’s track record and experience in the relevant field? Has the team made notable contributions to the ecosystem or relevant projects?
The Sonic Foundation is partially DOXed, with each member of the foundation choosing their own degree of privacy. It should be noted that the information sourced is provided within the “Team” section of the whitepaper, and can not be cross referenced against LinkedIn’s due to lack of information.
The current team is compromised of the following members:
Cake Maker - Co-Founder
Cake Maker is an accomplished blockchain professional with a strong background in product management and an impressive track record in the industry since 2016. With a wealth of experience in leading development for a range of L1 blockchain projects, he has played a key role in the creation of blockchain explorers, node explorers, and wallets for the NEM blockchain, among others. He later joined IOHK, the parent company of Cardano, where he led the creation of a zero-knowledge blockchain from the ground up and developed extensive expertise in wallets, swaps, pub-sub indexer, zk DAO, and other related areas. Cake Maker holds a degree in computer science from the University of Calicut and a product degree from Carnegie Mellon University.
Bug Slayer - Co-Founder
Bug Slayer is an accomplished dev entrepreneur with a proven track record of success in startups. With over a decade of experience in the industry, Bug is a seasoned expert who has demonstrated a unique ability to identify problems and create innovative solutions that deliver value for customers. Bug has a strong background in the blockchain space, having worked on numerous projects over the years. Notably, he worked alongside Cake at NEM, where they collaborated on a variety of initiatives, including the development of blockchain explorers, node explorers, and wallets. In addition to his technical skills, Bug has a strong foundation in business management. He holds a degree in Electronics Engineering and a management degree from the prestigious Indian Institute of Management (IIM).
Joe George - Full Stack Developer
Joe George is a highly skilled full stack developer with a strong background in blockchain and machine learning. With extensive experience in developing blockchain-based solutions, he has been an integral part of several successful projects alongside Bug Slayer and Cake Maker. In 2019, they worked together to develop a notary system for Vechain, and have also built block explorers for NEM, Symbol crypto wallets, node explorers, and indexers in the past. Joe is proficient in Node.js and Vue.js and has a keen eye for identifying and resolving bugs, ensuring that the products he builds are scalable, efficient and of high quality. Joe’s educational background includes a degree in computer science and a master’s degree in mathematics, providing him with a strong foundation for developing innovative solutions that meet the needs of businesses and users alike.
Sidekick.icp - CTO
Side Kick is a highly skilled and experienced technologist who brings knowledge and expertise to the Sonic team. As one of the architects for Innov8, a co-working startup acquired by OYO rooms for over $400M, Side Kick has demonstrated his ability to design and develop scalable and innovative solutions. As the CTO of Sonic, Side Kick is responsible for leading the company’s technical direction and ensuring that the platform is robust, reliable, and easy to use. Side kick holds degrees in Computer Science, Info Security, and Data Science from LSBU. His academic background provides him with a strong foundation for developing innovative solutions that meet the needs of businesses and users alike.
Manny - Backend Lead
Manny is a highly experienced and innovative backend lead at Sonic. His extensive background in software engineering and management has been a crucial asset to the team’s success. Prior to joining Sonic, Manny worked at Equifax, a credit monitoring company, as a Senior Systems Analyst, where he honed his technical expertise in complex system design and development. In addition to his corporate experience, Manny is also a successful entrepreneur. In 2013, he co-founded an e-commerce startup that developed ERP and CEM solutions for companies, showcasing his ability to identify market needs and create innovative solutions. Manny holds a degree in Computer Application, which provides him with a strong foundation for software development and management.
Proof of Valuation
Has the team shown comparable raises within the industry sector? Does the valuation accurately address the current and potential market shares?
While the Sonic Foundation has not referenced comparable raises within the industry sector, it is worth noting that the “Market” section of the white paper places a heavy emphasis on the trajectory of the Decentralized Finance Industry.
With this being said, given the math regarding the valuation is not transparent, it is not possible to gauge whether this valuation accurately addresses current and potential market shares.
Has the team provided transparency regarding the valuation? Is the valuation method disclosed, and is the math behind it available for review?
No, in my opinion the Sonic Foundation has not provided clarity or transparency regarding the valuation of the DAO, given they have not referenced any math or metrics to cross reference the valuations accuracy with. Furthermore, the valuation method is undisclosed adding further uncertainty.
Security Audit
Is a security audit necessary for the application? Has the code received at least some degree of review? Is there transparency and disclosure regarding the security measures taken?
Yes, Sonic has undergone a formal code review, of which was completed by the IC centric auditing firm SolidState. The results of this review have been transparent in their entirety, with the audit report able to be referenced below.
Neuron Fund Allocation
Is the Neuron Fund utilized? If so, what percentage of the sale is the Neuron Fund? If so, what is the size of the contribution in respect to the size of the Neuron Fund?
Yes, the Sonic Foundation has requested the Neuron Funds’ participation within the SNS Sale.
It is requested that the Neuron Fund contribute 265,000 ICP, which translates to 9.9% of the Neuron Funds Maturity (under the assumption of a 1:1 conversion rate), falling within DFINITYs recommended guidelines.
In relation to the total size of the sale, it is requested that the Neuron Fund represent 265,000 ICP of the 500,000 ICP minimum contribution threshold (53%). Alternatively, under the assumption the maximum contribution threshold is met, the Neuron Fund will contribute 265,000 ICP of 1,250,000 ICP (22%).
Conclusion
In conclusion, the Sonic Foundation demonstrates strong technical competence, longevity, and transparency in its operation as a DEX on the Internet Computer. However, concerns persist around token allocations, the inability to verify the Foundations identity, and the lack of transparency regarding valuation, as detailed below.
Sonic has not only demonstrated technical competence but also a track record of longevity as a DEX on the Internet Computer. Operating for over two years, it stands as one of the earliest and more established DEXes within the ecosystem. This experience lends credibility to its ability to function effectively within the protocol.
One of Sonic’s strong points is its commitment to full decentralization. Both the front-end and back-end of the platform are hosted entirely in Canister smart contracts. This eliminates the reliance on third-party intermediaries, aligning well with the principles of decentralization central to the Internet Computer.
The Sonic project has maintained transparency by partially doxing its team members. While not all team members are fully disclosed, the ones revealed exhibit strong backgrounds in blockchain development and other relevant fields. Additionally, the project maintains visibility within the crypto community, engaging with the broader audience through its social media presence and interactions.
Sonic’s decision to undergo a formal security audit conducted by SolidState showcases a commitment to safety and reliability. The availability of the audit report to the public provides transparency regarding the security measures in place.
While Sonic has a strong operational history, its ambitious goals for future development, including synthetic perps, EVM support, Liquid Staked ICP tokens (xICP), and more, could pose challenges if the development team were to halt operations suddenly. Ensuring that these goals are realized may require continuous effort and commitment.
Concerns also arise from the token allocation, particularly the disproportionate distribution to the “Insiders” category, which includes both the team and acquisition allocations. The team’s share, in particular, represents a significant percentage of the circulating token supply. This allocation structure may be viewed as imbalanced and could affect the decentralization of governance and control over time.
While the Sonic project partially doxes its team members, there’s limited cross-referenceability with LinkedIn profiles or other external verification methods. This lack of external validation may raise questions regarding the team’s experience and qualifications.
The project also lacks transparency regarding its valuation method and calculations. The absence of clear metrics or financial data makes it challenging for the community to assess the accuracy and appropriateness of the valuation, which is a critical consideration for an SNS proposal.
As such, the Accumulators’ Neuron has opted to “Reject to Postpone”, under the primary concerns of abundant token allocations & lack of transparency regarding the valuation of the dApp.