Here's Why ICON Rebranded to SODAX and Abandoned its Layer-1

The past clip ICON (ICX) was making headlines, it was at the tallness of the ICO bubble erstwhile it was competing with Tron and Filecoin to bargain BitTorrent successful a high-profile bidding war.

ICON, erstwhile heralded arsenic the “Korean Ethereum,” peaked aboriginal successful 2018 but aboriginal struggled to clasp relevance amid fierce contention and a changing narrative.

Now, ICON is backmost successful the news, arsenic it precocious announced that it has rebranded to SODAX and is migrating its full DeFi infrastructure from its ain Layer-1 blockchain to Sonic, an EVM-compatible web focused connected high-speed, low-cost transactions.

Sonic itself is simply a merchandise of a rebrand, shifting from the sanction Fantom in 2024.

In an interrogation with CoinDesk, ICON laminitis Min Kim explained the logic down shifting from moving an autarkic blockchain to efficaciously outsourcing that portion of the cognition to Sonic’s Layer-1 infrastructure.

“Back successful 2017, we had to physique our ain Layer-1 due to the fact that determination wasn’t immoderate different infrastructure available,” Kim said. “Today, buying and maintaining your ain Layer-1 spot conscionable doesn't marque consciousness anymore due to the fact that determination are cheaper, amended options available.”

According to Kim, outsourcing infrastructure to Sonic allows his squad to streamline expenses and sharpen their strategical absorption connected DeFi products.

“It importantly cuts our operating expenses by millions of dollars,” Kim told CoinDesk. “There's little ostentation for our tokens, and each of this conscionable makes fiscal sense.”

This isn't each that dissimilar from the manufacturing world. Foxconn and Taiwan Semiconductor are billion-dollar companies due to the fact that firms similar Apple and Nvidia don't person their ain factories.

Similarly, ICON nary longer needs to carnivore the precocious fixed costs and risks associated with moving an full blockchain.

“Maintaining a decentralized web with validators astir the satellite is simply a immense undertaking,” Kim explained. “We person 8 years of acquisition moving our ain Layer-1. It's tedious, costly, and precise stressful. Outsourcing to Sonic allows america to absorption connected innovation and delivering products that radical really want.”

Kim besides highlighted the hazard simplification benefits, noting that ICON’s DeFi furniture tin stay unaffected by infrastructure issues astatine Sonic, creating a invaluable hazard separation.

“There's de-risking,” helium explained. “If Sonic gets hacked, evidently it’s bad, but it’s not straight our fault. Sonic focuses solely connected information and validator infrastructure, truthful we and different DeFi builders tin absorption connected creating applications person to end-users.”

The strategy comes arsenic ICON seeks to reinvent itself amid diminished marketplace influence. Once a apical 20 cryptocurrency, ICON’s ICX token crashed astir 99% from its all-time highs by precocious 2018, and has since not recovered, according to CoinGecko data, arsenic investors moved toward platforms amended capable to capitalize connected the emergence of DeFi and NFTs.

“Layer-1 infrastructure conscionable doesn't marque consciousness for astir projects,” Kim argued. “Many underestimated the effort, the superior expenses involved. There's been a misguided premium investors placed connected Layer-1 projects, reasoning an ecosystem would people physique itself. But that’s costly and seldom sustainable.”

Now rebranded arsenic SODAX and focused connected cross-chain liquidity products, the task is migrating ICX tokens to a caller token, SODA. While Sonic and SODAX’s tokens stay distinct, Kim emphasized that Sonic’s fee-monetization mechanisms volition transmission transaction fees backmost to SODA holders.

“Sonic allows 90% of transaction fees to travel backmost to SODA token holders,” Kim noted, underscoring the economical inducement of their strategical pivot.

Asked if this outsourcing exemplary represents a broader trend, Kim predicted that galore projects presently moving Layer-1s volition apt reconsider arsenic marketplace cycles shift.

“Ethereum and Solana are large examples arsenic they’re afloat focused connected validators and web security," helium said. "We’re astatine the forefront of reversing the inclination of launching your ain Layer-1s. It’s conscionable not viable for astir projects long-term.”

As the epoch of premium valuations for proprietary Layer-1 platforms ends, much projects, Kim said, are going to conscionable absorption connected the merchandise and not the infrastructure with ICON – present SODAX – starring the mode connected this.

“We’re going backmost to basics, lowering our costs, streamlining operations, and doubling down connected what we primitively wanted to do: enactment fiscal products straight into people’s hands.”