“Crypto Might Now Be in the Outsourcing Phase of Capitalism.”, – WRITE: www.coindesk.com
Icon, Once Heralded As the “Korean Ethereum,” Peaked Early in 2018 But Later Strugmed to Retain Relevance Amid Fierce Competition and A Changing Narrative.
Now, Icon is back in the News, as it recently AnnounCed that it have have been rebnded to sodax and is migrating it e-defi infrastructure from iots Own Layer-1 BLOCKCHAIN to Sonic High-Speed, Low-Cost Transactions.
SONIC ITSELF IS A PRODUCT OF A REBRAND, SHIFTING FROM The NAME FANTOM IN 2024.
In an interview with Coindesk, Icon Founder Min Kim Explained the Logic Begind Shifting from Running An Independent Blockchain to Effectiely Outsourcing that Part of the Operation to Sonic
“Back in 2017, we had to buy Our Own Layer-1 Because there wasn’t any of the infrastructure Available,” Kim Said. “Today, Buying and Maintening Your Own Layer-1 Property Just Doesn’s
Access to kim, Outsourcing infrastructure to Sonic Allows His Team to Streamline Expenses and Sharpen their Strategic Focus on defi Products.
“IT SIGNFICANTLY CUTS OPERATING EXPenses by Millions of Dollars,“ Kim Told Coindesk. “There’s Less Inflation for Our Tokens, and All of this Just Makes Financial Sense.”
This isn’t all that dismillar from the manufacturing World. Foxconn and Taiwan Semiconductor Are Billion-Dollar Companies Because Firms Like Apple and Nvidia Don’t have their Own Factories.
Similarly, Icon No Longer Needs to Bear the High Fixed Costs and Risks Associated with Running An Entire Blockchain.
“Maintening A Decentralized Network with Validars Armund the World Is A Huge Undertaking,“ Kim Explained. “We have eight years of experience running Our own Layer-1. It’s Tedious, Costly, and Very Stressful. Want. ”
Kim Also Highlighted the Risk Reduction Benefits, Noting that Icon’s Defi Layer Canin Remain UNAFERUked by Infrastructure Issues at Sonic, Creating A Valuable Risk Sepration.
“There’s de-risking,” he explained. “If Sonic Gets Hacked, Obviously It’s Bad, But Is Not Directly Our Fault. Sonic Focusses Solely on Security and Validtor Infrastructure, SOCUS -Fating to end-users. ”
The Strategy ComESS as Icon Seeks to Reinvent ItCelf Amid Diminized Market Influence. Once a Top 20 Cryptocurrency, ICon’s ICX Token Crashed Nearly 99% from Its All-Time Highs by Late 2018, and Has Since Not Recovered, Accordation to Coing Mago. Better able to capitalize on the rise of defi and nfts.
“Layer-1 Infrastructure Just Doesn’t Make Sense for Most Projects,“ Kim Argued. “Many undeestimated the Effort, the Capital Expenses Involved. There’s Been A Misguided Premium Investors PLACED ON LAYER-1 PROJESTS SustainAnable. ”
Now Rebranded As Sodax and Focused on Cross-Chain Liquidity Products, The Project Is Migrating ICX Tokens to A New Token, Soda. While Sonic and Sodax’s Tokens Remain Distinct, Kim Emphasized that Sonic’s Fee-Monetization Mechanisms Will Channel Transaction Fees Back to Soda Holders.
“Sonic Allows 90% of Transaction Fees to Flow Back to Soda Token Holders,” Kim Noted, UndersCoring The Economic Incentive of Their Strategic Pivot.
Asked if this outsourcing model represents a Broader Trend, Kim Predicted that Many Projects Currently Running Layer-1s Will Likely Reconsider 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.”
As the era of premium valuations for propriotary Layer-1 platforms ends, More Projects, Kim Said, Are Going to Just Focus on the Product And Not The InfrastRuxTUIS WITH ICON-NOT-NOT-NOT-
“We’re Going Back to Basics, Lowering Our Costs, Streamling Operations, and Doubling Down on What We Originally Wanted To: Put Financial Products Direct.
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