Weekly Gauge #82: Sonic Rings
The Governance Flywheel
Since the post of Weekly Gauge #80 introducing Rings, the protocol has surpassed $36M in TVL. Our previous article covered how Rings works as a stablecoin and ETH wrapper within the Sonic ecosystem, generating yield through Veda vault farming strategies.
A key feature of Rings is its yield redistribution mechanism, which directs rewards not to individual users, but to Sonic applications via veUSD and veETH solidly like NFTs. These governance tokens are unique in that they do not expose holders to a project’s native token, making them more liquid, less volatile, and better suited for long-term holding.
To enable Sonic applications to capture and redistribute these rewards as they see fit, Paladin is launching Quest for Rings. Quest will serve as the exclusive vote market for Rings, capturing and redirecting scUSD and scETH yield, much like Ethereum's governance wars, but with increased economic efficiency tailored to Sonic ecosystem.
Rings Metrics
Rings is experiencing rapid growth supported by strong APRs and a great spotlight within the Sonic ecosystem. Let’s review some of the meaningful metrics to highlight the protocol successful go to market:
TVL growth
Rings TVL chart
After its first month of production, Rings has already hit an impressive $36M in TVL which represents around 12% of Sonic TVL, showing rapid growth and strong demand. This milestone sets the stage for even more success as the platform continues to gain momentum.
The TVL is split almost evenly between ETH and USD vaults, demonstrating the balanced appeal of Rings across both major assets, and optimizing the Veda vault farming strategies across different assets. This ensures Rings always generates the best possible yield available on the market.
Staking / Lock rate
Rings scUSD & scETH distribution
Although both represent the same TVL dollar wise, and generate with a small margin the same APRs, the distribution of scUSD and scETH tokens are showing very different patterns.
The scUSD supply is roughly half liquid, 40% staked and 10% locked ; whereas the scETH supply is only 15% liquid for 83% staked and only 2% locked. As a result the governance market on top of scUSD is currently more granular and vote incentive friendly.
scToken yield
Rings’ scETH and scUSD tokens are now integrated within more than 10 partner protocols, including well-known projects like Pendle, Spectra, Beets, Silo, and more... Some partner protocols are seeing jaw-dropping yields, with APR reaching up to an incredible 3368% on Metropolis.
Moreover, the Sonic Airdrop program has further amplified the points allocation to Rings, boosting scUSD and scETH point multipliers up to 6x. This incentivizes users to participate and engage with Rings as the main meta stable primitive on Sonic..
Quest release
As we teased in conclusion of weekly gauge #80, the launch of Quest Rings this week comes right in time before the first round of Veda Vault rewards distribution. As of now, veUSD and veETH governors can be incentivized through Quest, by every app of the ecosystem willing to capture a share of Rings rewards redistribution.
Veda vault APR
When minting scUSD or scETH aka depositing into Rings protocol, users deposits are sent to a Veda vault allocating funds to farming strategies. Currently scUSD backing is almost fully farming on AAVE in various assets such as aETHUSDT and aETHUSDC. scETH backing is also essentially providing liquidity on AAVE in various LSTs and LRTs.
veUSD efficiency
The yield farmed by Veda vaults is compounded directly into scUSD to be redistributed as rewards through the veUSD gauge governance. The first epoch of framing accrued 28,000 scUSD, controlled by a current total supply of 213,395 veUSD.
That is 0.13$ controlled per veUSD, to properly visualize the potential APR for veUSD based on the efficiency realised by bribers, the following table:
