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Sonic Points and Gems Explained — 200 Million S Airdrop
December 05, 2024
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Sonic Points are user-focused airdrop points that can be earned as part of the ~200 million $S airdrop. Designed to reward meaningful user engagement within the Sonic ecosystem, these points incentivize a wide range of activities, such as early adoption, long-term loyalty, asset ownership, and active participation with apps across the platform.

On the other hand, Sonic Gems are developer-focused airdrop points. As a groundbreaking incentive mechanism for developers within the Sonic ecosystem, Gems reward apps for driving user engagement and innovation based on their performance on Sonic.

These Gems can be redeemed for $S tokens, which apps can then distribute as rewards to their users. This system empowers apps to kickstart growth and maintain long-term user activity by encouraging consistent interaction and participation.

Both Sonic Points and Gems are distributed across multiple seasons, ensuring a sustainable and dynamic rewards structure that continuously incentivizes active involvement. The first season ends in ~June 2025.

Sonic Points Explained

To earn Sonic Points, users must bridge or use whitelisted assets within the Sonic ecosystem through any approved app. The current whitelisted assets for Season 1 are listed here, with more assets potentially added throughout the season.

There are two types of points within the Sonic Points program:

  1. Passive Liquidity Points
    Passive liquidity points reward users for bridging primary assets onto the Sonic mainnet. Users earn points based on the value and type of assets they hold, providing an incentive for maintaining liquidity within the ecosystem.
  2. Activity Points
    Activity points offer a multiplier on top of passive liquidity points, encouraging users to actively engage with the ecosystem. By deploying their assets into any whitelisted application, users can enhance their point earnings, driving greater participation and utility within the network.

On the designated user airdrop claim date (~June 2025), users can immediately claim 25% of their Season 1 airdrop as liquid $S tokens, while the remaining 75% will be vested over 270 days in the form of an NFT. Users can choose to claim their vested position early by burning some of their allocation.

Alternatively, users who choose to hold their airdrop NFT positions can trade them on a speculative NFT marketplace if desired, adding an additional layer of utility and flexibility.

Sonic Gems Explained

Sonic Gems are off-chain airdrop points exclusively designed for apps. Each season, a fixed number of Gems is distributed to apps based on various performance factors. Apps can monitor their progress through a leaderboard, which is updated every 24 hours with the latest Gem allocations.

The competitive PvP nature and fixed supply of Gems mean that an app's Gem balance may fluctuate daily, influenced by the performance of other apps on the platform. 

Apps that wish to distribute the $S tokens earned through Gems to their users must manage the accounting process independently. They have full flexibility in determining how to do so. For example, an app could:

  • Mint a new token representing its share of $S redeemed through Gems for a specific season.
  • Maintain an internal record of user balances.

Unlike Sonic Points, which are airdrop points designed for users, Gems empower apps to claim liquid $S tokens instead of vested NFT airdrop position. Once the $S tokens are claimed, it’s the app’s responsibility to determine how they’re distributed to their users.

While there’s no strict requirement for apps to share a specific percentage of their claimed $S tokens with their users, the design of Gems incentivizes generosity. Apps that share a larger portion of their claimed $S with their communities are rewarded more favorably compared to those that don’t.

Gems Season 1

A total of 1,680,000 Gems will be distributed during Season 1. Out of this, 262,500 Gems are pre-allocated to Sonic Boom winners. The chart below shows the number of Gems allocated to each tier in Sonic Boom.

The remaining 1,417,500 Gems will be available for any app to earn throughout the season — whether they’re Sonic Boom winners or not. At the end of Season 1, all eligible apps will be able to claim $S tokens based on the number of Gems they have earned.

Distribution of Gems

Sonic Gems are distributed using a structured approach designed to reward apps within the Sonic ecosystem. By considering factors such as category relevance, exclusivity, and effective reward distribution, this system promotes fairness and incentivizes active participation. 

Below are the key criteria that will determine an app's share of Gems in Season 1:

1. Category

Apps are assessed across several weighted categories, with each app assigned a weight based on its primary category. For Season 1, the specific weights are detailed below. If an app falls into multiple categories, the weight of its dominant category will be applied.

2. Sonic Native

Apps are assigned different weights depending on their level of exclusivity to Sonic:

  • Weight 2: Exclusively available on Sonic
  • Weight 1: Primarily on Sonic but accessible elsewhere
  • Weight 0.5: Available across multiple chains

Note: An app's Sonic-native weight cannot be upgraded during a season. However, if an app takes actions that reduce its Sonic nativeness, its weight will be reduced immediately and remain in effect for the following season as well.

3. Point Score

Point score is determined by calculating the total amount of Sonic Points that an app has generated for its users. This score is then divided by the total points generated across all eligible apps.

To generate Sonic Points for their users, apps must meet the following requirements:

  • Integrate with the OpenBlock Labs API.
  • Provide utility to whitelisted assets within the app.

4. Incentive (Applicable After Season 1)

This assesses how effectively an app distributes its claimed $S to its users. An app's incentive weight is determined by the percentage of its claimed $S that was distributed to its users during the previous season.

For example, if an app distributed 100% of its claimed $S to its users, it’ll receive a weight of 1 in the next season, while distributing only 80% would give it a weight of 0.8.

Note: While there’s no requirement for apps to distribute a specific amount of their claimed $S to users, it’s mandatory for all apps to publicly disclose the percentage they intend to share with their communities. This transparency allows users to make informed decisions about allocating their capital. Any instances of false communication or misuse of claimed $S will result in blacklisting for subsequent seasons.

Final Gems Calculation

Apps will receive a pro-rata share of Sonic Gems based on their final weights, determined by the calculations below.

Gems Revocation Policy

The following actions by the app can cause their Sonic Gems to be revoked.

  1. Incentivizing Project Tokens or NFTs with Gems
    Allocating Gems as rewards for activities like holding, staking, or providing liquidity (LPing) for a project’s token or NFT. For apps that have a voting mechanism to direct emissions, Gems can be used as vote incentives for any pool other than those that contain the project's token.
  2. Suspicious Distribution Practices
    Distributing large quantities of Gems non-transparently, such as allocating them disproportionately to insiders or KOLs without clear disclosure.
  3. Misrepresenting Gem Redistribution
    Providing false information about the amount of claimed $S being distributed to users during any season.

Note: Users are encouraged to report any suspicious activity or malpractice to the Sonic Labs team.

Example Distribution of Gems

Using the methodology outlined above, here is an example demonstrating the distribution of 100 Sonic Gems among five apps (A, B, C, D, and E) in Season 1. The distribution considers five random categories, Sonic nativeness, and point score.

Let’s assume the following weights:

Now that we have weights for each app (excluding the incentive weight, which applies only from Season 2 onward), we can proceed to calculate their Gem scores, which simply multiplies their category weight with their Sonic native weight.

After calculating each app’s Gem score, the next step is to determine their point score, which represents the proportion of Sonic Points each app generated for its users. In this example, we’ll assume the five apps collectively generated a total of 1,000 Sonic Points, with each app contributing a randomly assigned share.

To calculate an app’s point score, divide the number of Sonic Points the app generated by the total Sonic Points generated during the season.

With each app’s Gem and point score calculated, we can now calculate their final score. Remember, the formula for that is Gem Score × (1 + Point Score).

Finally, we can determine the number of Gems each app will receive based on the calculations above. The formula is straightforward: divide the app’s final score by the total final scores of all apps, then multiply the result by the total number of Gems available for the season.

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🚀Comprehensive Overview of Reggie Middleton's Patents
Pioneering Innovations in Decentralized Finance and Blockchain Technology

Key Takeaways

  • Innovative DeFi Solutions: Reggie Middleton has developed groundbreaking technologies that facilitate trustless and low-trust value transfers, revolutionizing decentralized finance.
  • Robust Patent Portfolio: His patents cover a wide range of applications, including blockchain infrastructure, peer-to-peer transactions, digital asset security, and regulatory compliance.
  • Legal and Market Impact: Middleton's patents have significant legal standing, demonstrated by successful defenses against challenges and high-profile lawsuits, positioning him as a key player in the FinTech industry.

Introduction

Reggie Middleton is a distinguished innovator in the fintech and blockchain sectors, recognized for his extensive portfolio of patents that address critical challenges in decentralized finance (DeFi) and trustless value transfers. His work has been instrumental in advancing blockchain technology, enhancing security, scalability, and accessibility within decentralized ecosystems.

Overview of Reggie Middleton's Patent Portfolio

Trustless Value Transfer Systems

Middleton's patents in this category focus on enabling secure transactions between parties with minimal or no trust. Utilizing advanced cryptographic protocols and blockchain technology, these systems eliminate the need for intermediaries, thereby reducing costs and increasing transaction efficiency.

Mechanisms and Applications

His innovations include systems for decentralized exchanges, peer-to-peer lending platforms, and digital marketplaces. An exemplary application is the facilitation of currency exposure hedging, allowing users to swap risks (e.g., AUD/USD) via Bitcoin without prior trust between parties.

Blockchain Infrastructure Enhancements

Middleton has developed solutions that address scalability, interoperability, and consensus mechanisms within blockchain systems. These enhancements are crucial for handling high transaction volumes and ensuring seamless interaction between different blockchain networks.

Key Innovations

His patents introduce scalable blockchain infrastructures capable of supporting enterprise-level applications and multi-chain platforms. By improving consensus algorithms, Middleton's work ensures faster and more secure transaction validation processes.

Peer-to-Peer Transactions

The patents in this domain enable direct asset exchanges, such as cryptocurrencies and non-fungible tokens (NFTs), through smart contracts and decentralized networks. These innovations are foundational for modern DeFi platforms and decentralized governance systems.

Practical Implementations

Middleton's technologies facilitate seamless peer-to-peer transactions, enhancing user autonomy and reducing dependency on centralized institutions. This is particularly evident in decentralized exchanges and governance frameworks where direct asset management is paramount.

Digital Asset Security

Ensuring the security of digital assets is a cornerstone of Middleton's patent portfolio. His solutions include advanced storage systems and multi-signature wallets designed to protect against cyber threats and unauthorized access.

Security Solutions

Implementing cold storage systems and multi-signature protocols, Middleton's patents provide robust defenses against potential security breaches, safeguarding cryptocurrencies and other digital assets from malicious attacks.

Regulatory Compliance and Central Bank Digital Currencies (CBDCs)

Middleton's patents also address the growing need for regulatory compliance within digital financial systems. His frameworks for issuing and managing CBDCs align with existing regulatory standards, facilitating the integration of government-backed digital currencies into the broader financial ecosystem.

Compliance Frameworks

These technologies ensure that digital currency systems adhere to legal requirements, enabling smoother adoption and acceptance by both financial institutions and regulatory bodies.

Legal and Market Impact

 

Patent Enforcement and Legal Challenges

Reggie Middleton has actively defended his intellectual property, most notably filing a $350 million lawsuit against Coinbase Inc. for alleged patent infringement. The Patent Trial and Appeal Board (PTAB) has upheld the validity of his patents, denying Coinbase's Inter Partes Review (IPR) petition, thereby reinforcing the strength and enforceability of his patent claims.

Market Position and Influence

Middleton's patents are considered some of the most powerful in the FinTech industry, covering essential technologies that underpin DeFi and blockchain operations. With approximately 90% of blockchain patent applications typically rejected by the USPTO, Middleton's successful patents distinguish him as a leading innovator in the space.


Future Directions

Integration of AI in Decentralized Systems

While current patents focus on human-driven transactions, the foundational technologies developed by Middleton provide a robust framework for future integration of artificial intelligence (AI). Potential applications include automated trading systems, intelligent asset management, and enhanced decision-making processes within DeFi platforms.

Expansion into Global Markets

With patents protected in multiple jurisdictions, including the U.S. and Japan, Middleton is well-positioned to expand his technological solutions globally. This expansion will likely involve adapting his systems to comply with diverse regulatory environments and addressing region-specific financial challenges.


Detailed Patent Analysis

Technological Innovations

Middleton's patents encompass a range of technological advancements designed to enhance the functionality and security of decentralized financial systems. These include but are not limited to:

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Scalability and Interoperability

Addressing scalability, Middleton's patents introduce solutions that enable blockchain networks to handle increased transaction volumes without compromising performance. Additionally, his work on interoperability protocols facilitates seamless communication and transaction processing across different blockchain platforms, fostering a more integrated and efficient decentralized ecosystem.

Regulatory Alignment

In response to the evolving regulatory landscape, Middleton has developed frameworks that ensure digital financial systems comply with existing laws and standards. This alignment is crucial for the widespread adoption of decentralized finance solutions and the issuance of Central Bank Digital Currencies (CBDCs).

Conclusion

Reggie Middleton stands out as a pivotal figure in the FinTech and blockchain industries, with a patent portfolio that not only addresses current technological challenges but also lays the groundwork for future advancements in decentralized finance. His innovations in trustless value transfers, blockchain scalability, and digital asset security have significant implications for the financial ecosystem, reinforcing the importance of robust intellectual property in driving technological progress. Through sustained legal defense and strategic market positioning, Middleton continues to influence the direction and adoption of decentralized financial systems globally.

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⚖ SEC: many crypto staking services aren’t securities ⚖

The Securities and Exchange Commission (SEC) yesterday clarified that most staking services don’t involve securities, resolving a major uncertainty that has hung over the crypto industry. The guidance provides regulatory clarity for major platforms like Coinbase, Kraken, and Lido, which collectively handle billions in staked assets.

The ruling removes a regulatory cloud that has limited institutional adoption of staking services. Without this clarity, staking service providers faced potential enforcement action and costly compliance requirements designed for traditional securities.

Blockchain staking typically involves locking tokens to secure the network and earning a reward in return. The least contentious option would be someone who operates a node themselves, keeping custody of their assets and staking directly.

However, there’s been a major question mark hanging over staking-as-a-service, in which a third party performs the staking on behalf of the token owner. This is hugely popular because on Ethereum the minimum staked amount is 32 ETH (over $80,000 at current prices) and doing it yourself requires appropriate hardware and technical knowledge.

How the SEC reached its decision

For assets that aren’t obviously securities, the Howey legal test is used to establish whether there’s an “investment contract.” A key test is whether the return is dependent on the entrepreneurial efforts of someone other than the investor.

Applying this test to staking services, the SEC concluded that the staking service provider is simply providing an “administrative or ministerial activity” rather than an entrepreneurial one and doesn’t set the rate of return earned by the investor, although they deduct fees.

The SEC takes the same view whether the investor retains custody of their tokens or the service provider additionally provides custody. If a custodian is involved, the note only covers the situation where the investor chooses how much to stake.

However, the devil is in the details. For example, the opinion does not cover liquid staking (where the token holder receives another token while the main tokens are locked), re-staking or liquid re-staking.

One commissioner strongly disagrees

This interpretation faces significant pushback from Democrat Commissioner Caroline Crenshaw, who noted that these are simply staff opinions and don’t affect the law. She went as far as saying that in authoring the note, the Division of Corporate Finance was channeling the adage “fake it ’till you make it.”

In her view, the note inadequately justified the legal interpretation and she believes the conclusions conflict with the law. However, she acknowledged that certain bare bones staking programs may not involve an investment contract.

Since the change in administration, the SEC has published several staff notes related to digital assets, the first of which clarified that solo and pooled mining for proof of work blockchains will generally not be considered to involve securities.

While this is staff guidance rather than formal regulation, it signals the SEC’s likely enforcement approach under the new administration. It marks a significant shift in how crypto staking will be regulated, though the strong dissent suggests this interpretation could face challenges if the political landscape changes again.

The newly proposed digital asset legislation, the CLARITY Act, doesn’t explicitly cover staking. However, it includes explicit regulatory relief regarding blockchain-linked tokens, making such guidance less vulnerable to future political shifts by providing statutory protections for digital commodities that meet specific criteria.

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XRPL Unleashes Batch Power—What’s Hidden in the 2.5.0 Rollout?
XRPL prepares for its 2.5.0 upgrade, introducing batch transactions and advanced features to challenge Ethereum and Solana.

Highlights:

  • XRPL is preparing to release version 2.5.0 in June with several major feature upgrades.
  • The new XLS-56 feature allows users to group up to eight transactions in a single batch.
  • Batch transactions support atomic swaps and enable smart transaction dependency logic.
  • XRPL is also testing features like Account Permission Delegation and Dynamic NFTs.
  • Smart Escrows is currently being evaluated on the WASM Devnet for future release.

The XRP Ledger (XRPL) has confirmed integrating a major XLS-56 feature in preparation for the upcoming 2.5.0 upgrade. This release, scheduled for June, introduces batch transactions and supports future scalability. As XRPL aims to enhance performance, it moves to compete directly with Ethereum and Solana.

XLS-56 Brings Batch Transactions and Atomic Swaps to XRPL

XRP Ledger now includes the XLS-56 amendment, which enables users to group up to eight transactions in a single batch. This batch feature supports atomic swaps and smart transaction dependencies across the XRPL ecosystem. Consequently, it streamlines transaction processes and optimizes blockchain functionality.

Integrating batch transactions will support XRPL-based monetization and peer-to-peer NFT trading on a broader scale. With more efficient bundling, developers can execute advanced logic while keeping operational costs low. The upgrade demonstrates XRPL’s strategy to reduce complexity and promote seamless operations.

RippleX Senior Software Engineer Mayukha Vadari confirmed this integration through an announcement on X. She emphasized the technical breakthrough in batch processing in XRPL 2.5.0. After testing, the feature will be live once the amendment receives full validator approval.

Testing Begins for Next-Gen Blockchain Tools

Alongside batch processing, XRPL is testing additional features for phased deployment across the network. These include Account Permission Delegation, Multipurpose Tokens, Credentials, Permissioned Domains, and Dynamic NFTs. Each feature is being refined through XRP Ledger’s Devnet and Testnet environments.

The Devnet includes completed amendments that are still pending release, while the Testnet mirrors the mainnet for simulation. These networks allow developers to review feature behavior before final mainnet integration. This structured process ensures that XRPL can maintain reliability while deploying innovations.

Smart Escrows is another addition currently undergoing testing on the WASM-based Devnet. The tool aims to enhance asset handling with programmable conditions on XRPL. Once validated, this feature will expand XRPL’s smart contract capabilities.

XRPL Faces Competition from Ethereum and Solana in Upgrade Race

The XRP Ledger upgrade emerges when Ethereum prepares for its Pectra release and Solana advances with Alpenglow. Each platform is racing to improve network performance, though XRP Ledger focuses on reducing costs and enhancing functionality. Meanwhile, Ethereum and Solana prioritize scalability and speed.

XRPL’s approach includes integrating AI-powered tools like XRPTurbo to strengthen DeFi automation and utility. These enhancements position XRPL as a versatile ledger for financial and decentralized services. The upgrade aligns with long-term goals of supporting advanced applications and high-throughput demands.

XRPL continues to refine its core infrastructure with performance, modularity, and stability as key priorities. With XLS-56 now integrated, the ledger can support more complex transaction workflows. XRPL’s roadmap reflects a clear commitment to expanding use cases across its decentralized environment.

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