Andre Cronje Shares Blockchain Running Costs for Sonic Labs

Understanding the Real Costs of Running a Blockchain

In a recent disclosure, Andre Cronje, co-founder of Sonic Labs (previously known as Fantom), shed light on the significant costs associated with operating a blockchain. Even when partially successful, the expenses can be substantial. Here’s a detailed breakdown of these costs and what they mean for the blockchain industry.

Initial and Annual Costs at Sonic Labs

According to Cronje, the initial costs for critical components such as oracles and stablecoins can reach a staggering $7.5 million. Furthermore, the annual upkeep costs add an additional $3.5 million. Below is a detailed financial overview:

• Oracles and Stablecoins: Initial costs - $7.5 million, Annual costs - $3.5 million
• RPC, Indexing, and Dashboards: Initial costs - $200,000, Annual costs - $70,000
• Other Annual Costs: VRF, Keepers, Wallet Support, Governance - $50,000
• Explorers, Custody, and Risk Management: Annual costs - $80,000

This totals approximately $13.2 million in operational expenses for Sonic Labs, underlining the significant investment required to maintain blockchain functionality.

Last Year’s Expense Breakdown

In addition to initial costs, Cronje revealed the complete expenses incurred by Sonic Labs during the previous year:

• Research and Development: $10.9 million
• Ecosystem Expenses: $10.7 million
• Legal Fees: $410,000
• Compliance Costs: $3.8 million
• Infrastructure Expenses: $2.4 million
• Marketing Costs: $1.4 million
• Bounties: $1.2 million
• Sponsorships: $400,000
• Media Expenses: $350,000
• Regulatory Costs: $200,000
• Event Costs: $100,000

The total expenses for the year equated to a formidable $35.6 million. These figures reveal not just the financial investment needed, but also the complexity involved in managing a blockchain ecosystem.

Ongoing Financial Considerations

Cronje also pointed out that these costs do not factor in the expenses related to listing on exchanges, which Sonic Labs has fortunately avoided this year. This highlights a significant advantage for them compared to other blockchain projects aiming to gain visibility and liquidity.

Conclusion

As the blockchain industry continues to evolve, the insights shared by Cronje serve as a vital reminder of the financial realities behind successful blockchain projects. For developers and investors, understanding these costs is crucial for making informed decisions about the future of blockchain technology and investments.