Jack Paul 
The changing landscape of layer 1 competition
It’s interesting how quickly the blockchain space evolves. Just a couple of years ago, everyone was obsessed with transaction speeds and low fees. Mitchell Demeter, the new CEO at Sonic Labs, thinks that era is basically over. He came in two months ago and immediately saw the need for a different approach.
When you think about it, block space has become almost like a commodity now. There are plenty of fast chains out there. Being quick and cheap isn’t enough anymore to stand out. The real challenge has shifted to keeping developers and users around long-term.
Making blockchains stickier for developers
Demeter’s team is looking at protocol-level changes that could make Sonic more appealing to builders. They’re digging through Ethereum Improvement Proposals that larger chains might take years to implement. One example is EIP-7903, which would increase the contract size limit beyond the current 49 kilobytes.
That might sound technical, but it matters. When developers build more complex applications, it becomes harder for them to just pack up and move to another chain. It creates what Demeter calls “stickiness” – a reason for builders to stay put.
Rethinking token economics
One of Demeter’s first priorities was fixing Sonic’s fee model. The current system returns 90% of fees to builders and 10% to validators. While this makes sense for user experience – apps can pay gas fees for users, making blockchain almost invisible – it doesn’t benefit token holders.
They’re working on a sliding-scale model where builders might get around 15%, validators 10%, and the rest gets burned. This creates scarcity and actually rewards people holding the token when usage increases.
It reminds me of how tech companies evolve. Early on, they issue stock to raise capital. Once they hit critical mass, they shift to buybacks. Blockchains might be going through a similar maturation process.
Building sustainable blockchain businesses
Demeter sees the broader market moving away from pure speculation. Liquidity has tightened, and investors are becoming more sophisticated. Builders and users have more choices than ever.
He thinks most of the market pain is behind us, but the next phase won’t be driven by blind speculation. It’ll be about fundamentals and actual business models. Sonic is exploring licensing their technology to exchanges and banks, using that revenue to fund token buybacks.
It’s a shift from being purely technology-focused to building a real business with marketing, communications, and institutional sales. The industry itself seems to be growing up, moving toward sustainability rather than just chasing the next big narrative.
What strikes me is how much the conversation has changed. It’s less about being the fastest chain and more about creating lasting value. That’s probably a healthy development for the entire ecosystem.