AC steps down from Sonic’s board of directors, the DeFi pioneer once again slips away like a cicada shedding its shell

Author: Curry, Deep Tide TechFlow

This year’s crypto experience, in my gut feeling, is basically: watching U.S. stocks hit new highs every day, then opening your own position, silently counting three seconds, and closing it.

BTC is down by nearly 20% since the start of the year. ETH is even worse—altcoins aside. In this kind of market, any public-chain token dropping 90% isn’t news. And colder than the price is the “people leave, the tea goes cold” effect.

On June 19, DeFi godfather AC and two other founding directors exited the Sonic Labs board. At the time, the S token was trading at 0.028—down to just a fraction from the 1.03 peak at the start of the year. On-chain TVL fell from last May’s peak of 1.14 billion to just twenty million. According to DefiLlama data, it evaporated by 98%.

The news that AC left didn’t cause much reaction in the space. After all, he had already stepped back once in 2022, then later returned. This time, his resignation statement was also very standard: he said he still “remains bullish on Sonic,” but would no longer participate in business decision-making.

But what stings is the next part.

He said that over the past 18 months, his main focus had been on Flying Tulip. Last August, this project raised $200 million in private funding with a $1 billion valuation, and in February this year it also opened a public offering on CoinList. The investors included names like Brevan Howard, DWF Labs, and Susquehanna.

In other words, during the period when S dropped from 1.03 to 0.028, AC was busy putting the stage together for an entirely new, $1 billion project.

What stings even more is Flying Tulip’s token design.

In the primary subscription, investors receive an NFT called ftPUT. In essence, it’s a perpetual put option: if you lose, you can destroy the token at any time and redeem the principal at the original price. CoinList’s public offering page spells it out clearly: the FT (the splitable token—i.e., the normal token) bought in the open market does not come with this right; only primary participants have it.

By contrast, S holders who take the bag in the secondary market, when the price falls to 0.028, it’s just 0.028. No floor, no redemption, and nobody is going to write you a way out...

None of my business.

AC’s resignation statement was posted on X—very short—but every sentence looks measured.

He said that when he joined Fantom in 2018, he was a technical advisor, and it wasn’t until December 2022 that he officially became a director. He is not a founder of Fantom—he was never one. He was simply the earliest technical architect. He was responsible for the underlying technology, including Sonic’s core systems later on and its cross-chain gateway.

Then comes the key paragraph, roughly as follows:

“I’m responsible for the technical decisions that I led, but the decisions regarding migration, airdrops, tokenomics, and the disposal of the old network were neither initiated by me nor approved by me.”

With a single sentence, he removed himself from the story of S tokens plunging 97%. The technology is mine—the technology is fine. As for why the coin you bought went from $1 to $0.03, that’s someone else’s decision.

The author doesn’t comment on whether this claim holds up, but admits the separation is so clean it’s impressive.

When most project founders run away, they either pretend nothing happened and stay silent, or issue a vague statement full of “we” and “the team,” turning responsibility into a big messy pot. AC is different. He draws the boundary of his responsibility with extreme precision—so precise it’s hard to argue with, because he truly does not control tokenomics.

And he didn’t come up with this on a whim.

In March 2022, AC announced his exit from the crypto industry, citing regulatory pressure and burnout. At that time, Fantom’s TVL evaporated by nearly one-third within a week, and the community was up in arms. A few months later, he quietly returned—returning to do Sonic’s technical restructuring.

When he left, he said he was tired; when he came back, he said nothing. When he left again, he said, “Over the past 18 months, I’ve actually been busy with other things.”

As for Sonic: in the half year before he left, the executive team changed over and over. The CEO Mitchell Demeter, hired just last September, resigned in February this year, along with the head of business. After the CEO left, the board took over and managed for a few months—then the board stepped down as well, replaced by a new CEO, Matt Visser, who had never handled matters on the front line of a public chain.

In five months, the entire management layer was replaced from top to bottom. Sonic’s official statement didn’t sugarcoat anything; it directly wrote: “The coin has fallen, and community sentiment has fallen too. We won’t pretend it isn’t like that.”

This kind of “lie-down honesty” is rare in crypto. But the problem is: the team telling the truth is new, while the person who left is the one whose name was valuable.

The script of slipping out while keeping the shell

Looking back at AC’s trajectory over the past few years, you can see a pattern.

In 2020, he wrote Yearn Finance, a signature product of DeFi Summer, and TVL once surged to tens of billions of dollars. He didn’t manage it much and just stepped back; later, Yearn ran on its own and did fine, but it no longer had much to do with him.

Then he went to do the technical architecture for Fantom, and Fantom rose for a while. In March 2022, he announced his exit from the scene, after which Fantom entered a long period of downward drift. Later, it was renamed to Sonic, rebranded, relaunched—and when he returned, he hung the title of CTO. In Sonic’s early launch phase, TVL broke through one billion, then collapsed all the way down to its current state.

Each time, he withdrew either at the peak of attention or right when the hype was starting to cool, then moved on to the next thing. Each time, the holders of the old project bore most of the losses after he left.

Flying Tulip is his fourth project so far. The author believes that this time, he may have truly absorbed the lessons from those previous experiences and built them into the token design.

When you participate in Flying Tulip’s public offering on CoinList, you pay $0.10 to buy an FT. But what you receive is not the token itself—it’s an NFT called ftPUT, and the token is locked inside this NFT. This NFT is the perpetual put option. You have three choices.

First, do nothing. Leave the token in the NFT; it can’t be traded, but the redemption right remains. When you want to exit, you destroy the token and get your USDC or ETH back at the original price. No matter how far the FT drops in the secondary market, your principal has protection.

Second, withdraw the token from the NFT and trade it freely. But the moment you withdraw, the redemption right is permanently voided. Whatever portion you withdraw becomes principal that the protocol uses to execute buybacks and burns.

Third, withdraw partially and keep partially. What remains in the NFT continues to have protection, while what you withdraw is left exposed.

In an interview with The Block, AC said something very interesting—roughly: because of the existence of the perpetual PUT, none of the money raised can actually be spent.

In reality, the funds raised are zero. So where do operating costs come from?

All raised funds are put into lending protocols such as Aave and Ethena to run conservative strategies, targeting an annualized return of about 4%. If fully raised at $1 billion, that’s roughly $40 million in interest per year. That interest is used to support the team, development, and buybacks. The team has no initial token allocation—every FT must be bought back from the open market using the protocol’s income.

The author has to admit: this design is quite ingenious when applied to DeFi. It solves what has arguably been the most notorious problem in the crypto industry over the past few years—project teams taking the money and running, or using it recklessly, leaving investors with no chance of recovering their capital. AC’s plan is like tying his own hands: the money can’t move, the team doesn’t pre-allocate tokens, and investors can exit at any time.

But clever as it is, this protection only exists in the primary market. Once FT is listed on exchanges and bought on the secondary market, the tokens do not come with ftPUT. On CoinList’s page, this is stated in bold.

Buyers in the open market see the same token, but enjoy completely different treatment.

A snapshot of the industry

It’s not a secret that money in the crypto market is flowing outward this year.

From the start of the year to now, BTC is down by nearly 20%, while the median drop of altcoins is far beyond that figure. People in the space open U.S. stocks and watch the Nasdaq hit new highs, then switch back to their own holdings—no need for me to describe what that feels like.

A lot of people’s real moves this year amount to gradually shifting positions into U.S. stocks and stablecoin yield products, and on-chain activity is visibly shrinking.

In this environment, AC leaving Sonic is only a small part of the iceberg. The entire L1 track is going through the same story: shrinking TVL, user outflows, founder team turnover, or outright disappearance. Sonic is merely singled out as a sample because it has a big name and an extreme drawdown.

But AC’s case has something that other projects don’t.

Flying Tulip’s current valuation is about $1 billion. Sonic’s current market cap is about $100 million. Same person, same period—one $1 billion versus one $100 million: a tenfold difference. What’s the difference? It comes down to which side AC’s name is attached to.

This is a fact about the DeFi industry that very few people are willing to say outright.

Many projects’ valuations are not built on revenue, users, or technological barriers—they’re built on the name of a certain person. As long as the name is there, the money is there. When the name leaves, the money follows.

The bear market ripped off that last layer of disguise. In bull markets, all L1s go up—you can’t tell whether it’s fundamentals propping them up or the name propping them up. When the tide goes out, what remains is crystal clear.

And there’s another detail the author finds most interesting.

Flying Tulip’s initial deployment chain is Sonic. AC exited Sonic’s board and no longer participates in any business decisions—but his new project’s first stop is still built on Sonic. He left, but his business is still there.

The captain has left the ship, but he opened a new shop at the dock—selling things even more expensive than those on the ship.