Sophon Is Evolving. Here’s What It Means for SOPH.
The chain-era utility for SOPH is being replaced by a buyback-and-burn programme funded by real product revenues.
Sophon’s chain is being wound down. With it, the current architecture that underpins SOPH’s utility becomes obsolete. The gas token model, staking mechanics, and node reward infrastructure were all built for a chain that will no longer exist. So they need to change.
Over the past year it has become evident that blockchain network token models are structurally weak for long-term token holders and L2s are particularly exposed. Most L2 tokens trade at multiples that bear no relationship to the fees their chains actually generate. Too many chains have been built chasing a market that hasn’t yet materialised. This is the structural issue. Gas token value accrual depends almost entirely on chain growth — a bet that has not paid off for the vast majority of L2 communities. Sophon was not immune to this.
Many chains lather on incentives to attract this activity, but very rarely does it have any lasting impact. Ecosystem funds get distributed, diluting token supply and hurting holders; all while undifferentiated projects benefit from a short period of usage that can be attributed primarily to incentives rather than real demand.
Instead, SOPH’s new utility will be materially better: a buyback-and-burn programme funded by real product revenues.
Below is a full account of what changes, what stays the same, and what comes next.
SOPH Token: New Utility
As things stand, SOPH serves two purposes: gas fees on the Sophon network and staking. Both utilities will be phased out alongside the chain.
The new model is instead designed around buybacks and burns, funded by revenues from Sophon’s products.
Our upcoming neobank, Pyre, generates revenue across three distinct streams:
- Interchange fees on card transactions
- Vault performance fees on all vault usage
- PYRUSD reserve yield — earned on the reserves underlying our custom stablecoin and primary settlement currency across Pyre’s neobanking products
Each of these is a recurring, volume-driven revenue stream. As Pyre scales, the revenues feeding the buyback programme scale with it. A portion of profits from each stream will be used to purchase SOPH from the open market on an ongoing basis.
We believe this is the most durable token mechanism available, and the evidence bears that out. Even during a bear market, tokens like HYPE have continued to grow due to protocol revenues directly funnelling into buybacks. And this is only the most prominent example amongst many over the past year.
The reason it works is straightforward. A buyback programme funded by real revenues creates a direct link between product performance and token value. The better the product does, the more SOPH gets purchased. Unlike emissions-based models, a buyback model is self-reinforcing: growth tightens supply rather than expanding it.
One distinction worth making explicit: bought-back SOPH will not be redistributed to token holders. Redistributing buybacks to holders creates sell pressure with no net reduction in circulating supply. Instead, tokens acquired through the buyback programme will be permanently burnt. The circulating supply contracts continuously.
To kick off the buyback and burn programme, we will be burning over 46.5 million SOPH on June 28. This SOPH comes from the unutilised staking rewards pool and node buybacks. Rather than let this supply sit idle, it will be the first act of the burn strategy. Ongoing buybacks funded by Pyre’s revenues will follow throughout the year.
SOPH Staking
With the chain being decommissioned, SOPH staking will be discontinued at the same time. Without a chain and gas fees, staking has no real purpose. Until then, staking will remain available.
Any SOPH you unstake will now be claimable on Ethereum mainnet. Please visit claim.sophon.com to access staking.
Node Rewards: Transition to Ethereum Mainnet
The Sophon Guardian node programme, through which holders of Guardian NFT memberships earn a pro-rata share of 20% of the total SOPH supply over 3 years, will continue as is.
The transition works as follows. Guardian NFTs will be locked for transfers on Sophon chain, snapshotted and duplicated on Ethereum on June 25th. Current reward streams will continue vesting on Sophon for the next three months until September 29, 2026 at 12AM GMT. Once that cycle ends, new rewards will begin accruing on Ethereum mainnet.
Practically speaking, there is nothing Guardian holders need to do differently. Claiming node rewards and bridging tokens out of Sophon via the canonical bridge will be accessible through a single unified portal at claim.sophon.com, which supports both the Sophon and Ethereum networks.
Deposits to the Sophon chain will be blocked from June 25. There is no hard decommission deadline — the chain is expected to remain live at least until the end of year, giving holders time to withdraw and bridge their assets. Further details will be communicated in the coming months as we finalise details around the chain decommission.
The Bigger Picture
L1 and L2 chain tokens have been trading at P/E multiples that are unsustainable relative to the fees and revenues their networks generate. We are now moving to a better mode: real revenue, aggressive buybacks, contracting supply.
The buyback-and-burn mechanism is funded by product revenue. The circulating supply is set to contract.
Node holders can claim rewards, access staked SOPH, and bridge assets at claim.sophon.com. The June 25th Guardian NFT snapshot date is subject to final confirmation — follow Sophon’s official channels for updates.
