AC Exits Sonic’s Board of Directors; “DeFi Patriarch” Once Again Pulls Off a Strategic Exit
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AC Exits Sonic’s Board of Directors; “DeFi Patriarch” Once Again Pulls Off a Strategic Exit
DeFi’s “Godfather” is confident, but the token price lacks momentum.
Navigating Web3 tides with focused insightsAuthor: Kuli, TechFlow
This year’s sentiment for crypto participants has been roughly this: watching U.S. equities hit new highs daily, then opening your portfolio—silently staring for three seconds—before closing it again.
BTC is down nearly 20% year-to-date; ETH has fared even worse, and altcoins aren’t worth mentioning. In such a market, any L1 token falling 90% is hardly news. What’s colder than price, however, is the fading of human connection—the “tea grows cold once guests depart.”
On June 19, DeFi “godfather” Andre Cronje (AC), alongside two other founding directors, stepped down from the Sonic Labs board. At the time, the $S token traded at $0.028—just a sliver of its January high of $1.03. On-chain TVL plummeted from a peak of $1.14 billion in May last year to just $20 million. According to DefiLlama, that represents a 98% decline.
The crypto community barely reacted to AC’s departure. After all, he had previously exited the industry in 2022—only to return later. His latest resignation statement was also boilerplate: he “remains bullish on Sonic,” but will no longer participate in operational decision-making.
What stung, though, came next.
He revealed that over the past 18 months, his primary focus had been Flying Tulip. The project raised $200 million in a private round last August at a $1 billion valuation, followed by a public sale on CoinList this February. Backers included Brevan Howard, DWF Labs, and Susquehanna.
In other words, precisely while $S crashed from $1.03 to $0.028, AC was busy building infrastructure for an entirely new $1 billion project.
What stung even more was Flying Tulip’s token design.
Private-round investors received an NFT called ftPUT—a perpetual put option. If the token loses value, holders may burn their tokens and redeem principal at original purchase price. CoinList’s public sale page states this right explicitly: FT tokens purchased on open markets (fractional, standard tokens) carry no such redemption right—only private-round participants do.
By contrast, $S holders bought in secondary markets and absorbed the full loss—down to $0.028, with no floor, no redemption, and no safety net written for them…
“None of My Business”
AC posted his resignation statement on X. It was brief—but every sentence appeared carefully calibrated.
He noted that he joined Fantom as a technical advisor in 2018 and only became an official board director in December 2022. He was never Fantom’s founder—only its earliest technical architect. His responsibilities centered on core infrastructure, including Sonic’s foundational systems and cross-chain gateway.
Then came the pivotal paragraph, paraphrased:
“I take responsibility for the technical decisions I led—but migration strategies, airdrops, tokenomics, and legacy network disposal were neither initiated nor approved by me.”
With one sentence, he cleanly disassociated himself from $S’s 97% collapse. “The tech is mine—and it works. But why your token fell from $1 to $0.03? That’s someone else’s call.”
The author refrains from judging whether this claim holds water—but acknowledges the surgical precision of this separation is impressive.
Most project founders who exit either go silent or issue vague statements rife with “we” and “team,” dissolving accountability into a murky stew. AC is different: he draws his responsibility boundary with extreme clarity—so precise it’s hard to refute, because he truly never oversaw tokenomics.
And this wasn’t improvised.
In March 2022, AC announced his exit from crypto citing regulatory pressure and burnout. Fantom’s TVL collapsed nearly one-third within a week; community backlash was fierce. Months later, he quietly returned—specifically to lead Sonic’s technical re-architecture.
He left saying he was exhausted; he returned without fanfare; and now he leaves saying, “For the past 18 months, I’ve actually been focused elsewhere.”
Meanwhile, Sonic’s executive team rotated entirely in the six months before his departure. Mitchell Demeter, hired as CEO last September, resigned this February—alongside the head of business operations. After the CEO’s exit, the board temporarily assumed management duties for several months—until it too stepped down, replaced by Matt Visser, a new CEO with zero prior experience managing a live L1 chain.
In five months, Sonic’s entire leadership—from top to bottom—was completely overhauled. Sonic’s official statement didn’t sugarcoat it: “The token price fell—and so did community sentiment. We won’t pretend otherwise.”
This “flat-out candid” posture is rare in crypto. Yet the irony lies here: the ones telling the truth are the new team—while the person whose name still carries weight has already walked away.
A Cicada-Like Exit Script
Looking back at AC’s trajectory over recent years reveals a clear pattern.
In 2020, he built Yearn Finance—the defining product of DeFi Summer—with TVL briefly surging into the billions. He largely stepped aside early on; Yearn continued independently, performing reasonably well—but with diminishing ties to him.
Next, he architected Fantom’s tech stack—Fantom rallied accordingly. In March 2022, he announced his exit; Fantom entered a prolonged downtrend. Later rebranded as Sonic and relaunched, he returned—this time as CTO. Sonic’s initial TVL soared past $1 billion—then steadily collapsed to today’s level.
Each time, he exited precisely when hype peaked—or just as it began cooling—to pivot to the next project. And each time, holders of the prior project bore the brunt of the subsequent decline.
Flying Tulip is his fourth project to date. The author suspects this time, he’s fully internalized lessons from prior cycles—and baked them directly into token design.
If you participate in Flying Tulip’s public sale on CoinList—paying $0.10 for one FT—you don’t receive the token outright. Instead, you get an NFT named ftPUT, which locks the token inside. This NFT embodies the perpetual put option. You have three options:
First: leave the token locked in the NFT. It cannot be traded—but the redemption right remains intact indefinitely. Whenever you choose to exit, burn the token and reclaim your USDC or ETH at original purchase price—regardless of how low FT trades on secondary markets. Your principal is floor-protected.
Second: extract the token from the NFT for free trading. But the moment you do, the redemption right is permanently forfeited—and the extracted portion of principal is released to the protocol for buybacks and burns.
Third: partially extract, partially retain. Retained portions keep protection; extracted portions are exposed.
In an interview with The Block, AC made an intriguing remark: due to the perpetual PUT, “none of the raised capital can actually be spent.”
Effectively, the amount raised is zero. So where does operational funding come from?
All raised funds are deployed conservatively into lending protocols like Aave and Ethena—targeting ~4% annual yield. Assuming full $1 billion fundraising, that generates ~$40 million per year in interest—used to fund the team, development, and buybacks. The team receives zero initial token allocation; all FT tokens must be acquired by the protocol using revenue earned on open markets.
The author concedes this design is remarkably elegant—especially within DeFi. It tackles crypto’s most notorious problem: teams raising funds and vanishing—or squandering capital—leaving investors with nothing. AC’s solution effectively binds his own hands: capital is untouchable, no pre-allocated tokens exist, and investors retain full exit rights.
Elegant though it is, this protection applies exclusively to the primary market. Once FT hits exchanges, secondary-market buyers receive tokens without ftPUT—CoinList’s page highlights this in bold.
Public-market buyers see the same ticker—but enjoy radically different rights.
An Industry Microcosm
That capital is fleeing crypto this year is no secret.
BTC is down nearly 20% YTD; median altcoin losses far exceed that figure. Insiders watch Nasdaq hit new highs—then switch to their portfolios. No description needed.
Many real-world actions this year involve gradually shifting positions into U.S. equities or stablecoin yield products—on-chain activity visibly shrinking.
In this environment, AC’s exit from Sonic is merely the tip of the iceberg. The entire L1 sector is undergoing identical dynamics: collapsing TVL, user attrition, founder turnover—or outright disappearance. Sonic simply stands out due to its name recognition and extreme drawdown—making it a convenient case study.
Yet AC’s situation contains something absent in most other projects.
Flying Tulip’s current valuation sits around $1 billion. Sonic’s market cap today is approximately $100 million. Same person. Same timeframe. Tenfold difference. Why? Because AC’s name is attached to one—not the other.
This reflects a rarely acknowledged reality in DeFi:
Many project valuations aren’t grounded in revenue, users, or technological moats—they’re anchored to an individual’s name. As long as the name stays, capital stays. When the name leaves, capital follows.
The bear market has ripped away this veil. In bull markets, all L1s rise—you can’t tell whether fundamentals or fame are driving gains. When the tide recedes, what remains is unmistakable.
One final detail feels especially telling.
Flying Tulip’s initial deployment chain is Sonic. AC has exited Sonic’s board and ceased involvement in business decisions—yet his new project launched first on Sonic.He left—but his business remains.
The captain disembarked—but opened a new shop on the dock, selling goods pricier than those aboard the ship.
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