Sophon is shutting down its Layer 2 blockchain and migrating to Base

Comparing news, Sophon, which has raised $70 million, is shutting down its Layer 2 blockchain and turning to Base to build consumer apps, claiming that the cryptocurrency infrastructure era is over.

Sebastien (Seb), co-founder of Sophon, told The Block: “We believe value has never been about who runs the infrastructure, but about the products built on top of it. Sophon chose to develop these products in depth rather than maintain infrastructure.”

Seb notes that Sophon spends around $3.4 million a year to maintain its blockchain, covering all aspects of chain infrastructure, aggregation as a service, data, analytics, and tool vendors. Seb also pointed out that shutting down the blockchain is expected to save around $3 million in operating costs each year, thereby extending the capital turnover period and freeing up funds for direct application development.

As part of the new strategy, the role of the Sophon (SOPH) token will also change. Seb said the token was previously a gas token for the Sophon blockchain. As this blockchain shuts down, the focus will shift to directly accumulating value through product revenue. “The core of the new strategy is buyback and destruction,” Seb said. A significant portion of the revenue generated by Pyre, XP, SopHearn, SophPlay, and SopHai will be used to buy back SOPh tokens on the open market and destroy them — directly linking the tokens to the commercial success of the growing consumer product portfolio. The more successful the product, the more value SOPH holders get.”