Introducing the Diamond Alliance: Managing Future Value in the Sonic Ecosystem
Within the Sonic ecosystem, protocols earn “Gems” throughout each season. These Gems convert into $S tokens at the season’s end, granting protocols tangible value that can be shared with their users. However, waiting until the final distribution can create uncertainty. The Diamond Alliance offers a structured way for protocols and their communities to realize value earlier, maintain transparency, and ensure fairness in the long run.
The Core Concept
The Diamond Alliance unites multiple protocols into a shared framework. Instead of waiting for the end-of-season $S airdrop, these protocols pool their future Gem claims into a single “Alliance Pool.” In return, they receive a newly issued, tradable token called CT (Carat)—a representation of their expected share of the final $S redemption.
By distributing CT from day one, each protocol gives its users a clear stake in future rewards. This early clarity empowers protocols to plan their incentives more effectively, encourages user participation from the start, and can boost engagement—ultimately leading to more Gems earned over time.
Why the CT (Carat) Token?
Just as a carat measures the weight of a precious stone, CT represents the “weight” of each protocol’s claim on future $S tokens. This single, unified token simplifies the complexity of multiple unknown future rewards into an immediately understandable asset.
For users, CT provides insight into potential future gains without waiting months for the final distribution. They can hold, trade, or speculate on CT, engaging more deeply with the protocols’ services, and thereby increasing overall ecosystem activity.
Initial Allocation: A Transparent, Weighted Approach
To fairly determine how many CT tokens each protocol receives upfront, the Diamond Alliance uses a transparent, formula-driven method. It considers each protocol’s category, Sonic-native factor, and their Sonic Boom tier (if applicable). This ensures that stronger or more specialized protocols receive initial allocations reflecting their expected contributions.
Key Factors:
• Category Weight (C_i): Each protocol belongs to a category (e.g., Bridges, Spot DEX, Lending Markets) and each category has a predefined weight. For example:
• Bridges: 5
• Spot DEX: 2
• Tooling, Misc., and Payment: 1
• Sonic-Native Weight (N_i): Depends on how “native” the protocol is to Sonic:
• Exclusive to Sonic: 2.0
• Primarily on Sonic: 1.0
• Multi-chain: 0.5
• Sonic Boom Tier Multiplier (B_i): Protocols performing well in Sonic Boom events may receive a multiplier:
• Tier 1: 1.5
• Tier 2: 1.3
• Tier 3: 1.1
• No tier: 1.0
Formula for Initial Multiplier (M_i):
M_i = C_i Ă— N_i Ă— B_i
Converting Multipliers into CT Allocations:
1. Compute the sum of all protocols’ multipliers:
M_total = ÎŁ M_i
2. Allocate CT tokens proportionally:
CT_(i, initial) = (M_i / M_total) Ă— CT_total_initial
Here, CT_total_initial is the initial total CT supply decided by the alliance. Each protocol receives a share of CT based on its relative multiplier.
In-Season Engagement and User Benefits
Distributing CT at the start of the season helps users understand what portion of future rewards they might receive. Since Gems are awarded in part based on protocol usage, this early clarity motivates users to participate sooner and more frequently—providing liquidity, trading, lending, or otherwise engaging with the protocol’s services.
As users become more active, the protocol’s metrics improve. Stronger engagement can lead to more Gems at the season’s end, creating a positive feedback loop: early CT distribution builds trust and activity, which can boost final rewards.
End-of-Season Accounting and Perfect Fairness
At the end of the season, when actual Gem allocations are known, the Alliance Pool converts those Gems into $S tokens. If a protocol earned more Gems than initially projected (i.e., its final share exceeds the initial estimate), the Alliance mints additional CT tokens for that protocol.
This final step ensures a perfectly fair alignment between expected potential and actual performance. Protocols that do better than their initial projection receive more CT, guaranteeing that their final share of $S tokens perfectly matches their real contributions.
A More Predictable and Engaging Ecosystem
The Diamond Alliance framework and CT distribution model create a more predictable environment for both protocols and users. Protocols gain the ability to manage their incentives from day one, while users receive tangible value and transparency throughout the season.
By providing clarity, fairness, and strategic flexibility, the Diamond Alliance supports sustained growth, vibrant user communities, and an ecosystem where everyone can understand and engage with future value well before the season’s final tally.
In Summary
• Early Clarity: Protocols estimate their likely end-of-season rewards and distribute CT accordingly, providing immediate insight and value to users.
• User Empowerment: With CT in hand, users know what they’re working toward, increasing engagement and platform usage.
• Transparent Allocation: A clear formula ensures initial CT distribution is fair, balancing category, nativeness, and Sonic Boom performance.
• Fair End-of-Season Adjustment: Any protocol surpassing its initial estimates gets additional CT minted, ensuring the final distribution of $S aligns perfectly with actual results.
• Unified Value Representation: One token, multiple benefits—CT simplifies the path from projected to realized value.
