This article comes from: Bankless; original author: 0xSim0
Compiled by Odaily Planet Daily ( @OdailyChina ) ; Translated by Azuma ( @azuma_eth )
In June, Sonic will distribute 190.5 million S tokens, 25% of which will be immediately available and 75% will be released gradually in the form of tradable NFTs. There are two ways to qualify: Points (for network participants) and Gems (for builders), both of which may bring returns far beyond speculative airdrops.
Ready to boost your score? Here are three strategies to help you capture Sonics June airdrop more efficiently.
Preparation
To start interacting with the following Sonic protocols, you need some starting funds to perform interactions, and some S to pay for gas fees. You can choose to use any standard EVM wallet (such as Rabby or Metamask) and connect to Sonic through a cross-chain bridge such as deBridge.
Strategy 1: Silo revolving loan
This is probably the most popular and relatively simple strategy on Sonic right now, which aims to maximize the points reward while earning basic income. This strategy will utilize Silo v2, the mainstream lending protocol on Sonic.
The core of this strategy lies in the following operating cycle:
Get some stS by staking S or exchanging any token for stS on DEX.
Depositing stS in Silo Finances S/stS lending market will earn you Sonic Points, Silo Points (points redistributed by Silo through Gems), and yield (stS currently generates a base yield of about 5%, plus Silos deposit APY).
Borrow S from the market (if you want to earn income, the borrowing APY should be lower than the sum of the base yield of stS and the above deposit APY).
Exchange the borrowed S for stS.
Repeat from step 2.
Since stS and S are so tightly correlated, the risk of liquidation is low for borrowing the maximum amount, so you essentially get 20x leverage (on both points and base return) with a loan-to-value (LTV) of around 95%.
For every $1 you deposit, you can get 8 times Sonic points and 1 Silo point (which can be magnified 20 times after leverage), and for every $1 you lend, you can get an additional 0.5 Silo point (which can also be magnified 20 times).
In addition, you can currently earn a 2% basic return through stS deposits. If Ss borrowing rate is too high or stSs deposit rate is too low, you can also reverse the cycle (deposit S, borrow stS).
Note: This strategy can also be used on Euler, but due to the 90% LTV limit, the leverage is only 10x. However, Euler is simpler to operate and is suitable for users who seek convenience.
Strategy 2: Euler Finance + Rings Protocol combination strategy
This strategy will use two major protocols, Euler Finance and Rings Protocol.
Euler is another lending protocol that has been extended to Sonic and has provided additional incentives to the network; Rings is a new asset protocol on Sonic that now supports USDC, ETH, and BTC. Users can deposit these assets into Rings (which are then deposited into the Veda Strategy Vault to earn yield) and mint Rings versions of liquidity derivative tokens that can be staked/locked for additional yield or used in the Sonic ecosystem.
The highlights of this strategy are as follows:
Minting Rings liquidity derivative tokens can earn Sonic Points and Rings Points (i.e. Gems);
These Rings assets can be used in various protocols on top of Sonic to earn income + incentives;
Euler provides a one-click revolving loan function that can quickly obtain 10x leverage in highly correlated strategies.
The specific steps are as follows:
Select a market on Euler that currently has additional incentives (such as USDC.e/scUSD or scETH/wstscETH).
Compare the maximum ROE on the Euler strategy page to decide what assets to deposit and lend.
If you choose to deposit the Rings version of liquidity derivative tokens, you must first mint them in the Rings protocol.
Use Eulers Multiply function to implement revolving loans with one click and obtain the required leverage.
The strategy also enjoys other additional opportunities, such as Rings is rumored to be airdropped, which adds more profit expectations to this strategy.
Strategy 3: Shadow LP
Shadow is one of the most commonly used decentralized exchanges (DEX) on Sonic. It has a huge trading volume and an interesting economic model. Providing liquidity on Shadow can earn native tokens SHADOW, Sonic points, and Gems incentives.
First let’s review the first two strategies. If a large number of users choose to revolve their S/stS on Silo and other protocols, where will they redeem these assets?
The answer is Shadow!
If they do this frequently, they will incur a lot of transaction fees, which will go to the liquidity providers. Coupled with the fact that liquidity providers can also be rewarded with Sonic Points, Sonic Gems, and SHADOW tokens, this will naturally form an extremely capital-efficient strategy.
At the most aggressive price range setting (which is possible due to the high correlation between S and stS), the pool currently offers an APR of 169% and 16x Sonic Points.
It should be noted that you can also use vfat.io (a liquidity management tool powered by Sickle, now compatible with Sonic and Shadow) to automatically balance LP positions. You can also perform one-click entry and exit, automatic compounding, etc., but it is not yet certain whether Sonic points can be obtained in this way.
Hedge Insurance
Most of the above strategies rely on volatile assets such as S or ETH. If the prices of these assets fall, it may seriously affect the actual rate of return or even lead to losses. For this reason, we need to perform certain hedging operations.
The specific method is as follows:
Open a short position of 1x capital through a perpetual contract exchange. If the price falls, the profit from the short position will offset the capital loss of the airdrop strategy.
Sometimes these perpetual positions can also earn (or pay) funding rates.
Recommended Platforms:
HyperliquidX: Supports S transactions (requires cross-chain from Arbitrum).
Vertex protocol: A relatively new perpetual contract exchange that runs directly on Sonic.
It should be noted that this hedging mechanism, while suppressing losses, will also sacrifice potential profits brought about by rising prices of tokens such as S.
Looking ahead
There will be more and more opportunities to earn points and benefits on Sonic. With new protocols being launched on the chain every day, such as the rumor that Pendle will be deployed on Sonic soon (Odaily note: it has actually been deployed, you can participate in U-based Financial Management Guide for Lazy People (Phase 2) to use stablecoins to efficiently brush points), there will be more and more new strategies.
For users who are interested in participating in the Sonic June airdrop, they need to pay close attention to the development trends of the ecosystem and promptly find and adjust the most efficient “scoring” operations.
