The last time the icon (ICX) was the headlines, was in the apogee of the ICO bubble when it competed with Tron and Filecoin to buy Bittorrent in a high profile bidding war.
The icon, once announced as the “Korean Ethereum”, reached its maximum point in early 2018, but then fought to retain relevance in the middle of fierce competition and a changing narrative.
Now, Icon is back in the news, since he recently announced that Sodax has been renamed and is migrating all his defi infrastructure from his own layer of layers 1 to Sonic, a network compatible with EVM focused on high -speed and low -cost transactions.
Sonic itself is a product of a brand change, changing the name Fantom in 2024.
In an interview with Coindesk, the founder of Icon, Min Kim, explained the logic behind the change of executing an independent block chain to effectively outsource that part of the operation to the infrastructure of Sonic layer 1.
“In 2017, we had to build our own Capa-1 because there was no other available infrastructure,” Kim said. “Today, buying and maintaining its own property of Capa-1 no longer makes sense because there are cheaper and better options available.”
According to Kim, the outsourcing infrastructure to Sonic allows its equipment to rationalize expenses and sharpen its strategic approach to the DEFI products.
“Significantly cut our operating expenses in millions of dollars,” Kim told Coindesk. “There is less inflation for our chips, and all this makes financial sense.”
This is not so different from the world of manufacturing. Foxconn and Taiwan semiconductor are companies of billions of dollars because companies such as Apple and Nvidia do not have their own factories.
Similarly, the icon no longer needs to support the high fixed costs and the risks associated with the execution of a complete block chain.
“Maintaining a decentralized network with validators worldwide is a great company,” Kim explained. “We have eight years of experience by directing our own Capa-1. It is tedious, expensive and very stressful. The subcontracting for Sonic allows us to focus on innovation and the delivery of products that people really want.”
Kim also highlighted the risk reduction benefits, noting that the ICON defi can remain without affecting infrastructure problems in Sonic, creating a valuable risk separation.
“There are disbursements,” he explained. “If Sonic is pirated, it is obviously bad, but it is not directly our fault. Sonic focuses solely on the security and validator infrastructure, so that we and other builders define can focus on creating applications closer to end users.”
The strategy occurs when the icon seeks to reinvent itself amid the decrease in market influence. Once an upper cryptocurrency, the ICON token ICX crashed almost 99% from its historical maximums at the end of 2018, and since then it has not been recovered, according to Coingcko data, as investors moved towards platforms better capable of capitalizing on the increase in defi and NFT.
“Layer-1’s infrastructure simply makes no sense for most projects,” Kim argued. “Many underestimated the effort, the capital expenses involved. There has been a wrong premium investor in layer 1 projects, thinking that an ecosystem would be built naturally. But that is expensive and rarely sustainable.”
Now renamed as Sodax and focused on cross -chain liquidity products, the project is migrating tokens ICX to a new token, soda. While Sonic and Sudax’s chips remain different, Kim emphasized that Sonic’s monetization mechanisms will channel the transaction rates to soft drinks.
“Sonic allows 90% of transaction rates to flow back to soda tokens headlines,” Kim said, underlining the economic incentive of their strategic pivot.
When asked if this outsourcing model represents a broader trend, Kim predicted that many projects that currently execute Layer-1 will probably reconsider as market cycles change.
“Ethereum and Solana are excellent examples, since they are completely focused on the validators and network security,” he said. “We are at the forefront of reverse the tendency to launch its own Capa-1. It is simply not viable for most long-term projects.”
As the era of premium valuations for patented layer 1 platforms, more projects, Kim, said, they will focus on the product and not on the infrastructure with the icon, now Sodax, leading the way in this.
“We return to the basics, lowering our costs, rationalizing operations and doubling what we originally wanted to do: put financial products directly to people.”
