$SOPH The token from Sophon under the ticker SOPH lost more than 33% of its value in just one day after debuting on the Binance platform.
The main reason for the decline was the distribution of 900 million SOPH tokens, which is 9% of the total volume of 10 billion, unlocked at launch.
Listing on Binance
Sophon is a second-layer (l2) blockchain using ZK (zero-knowledge) technology and Validium.
It is part of the ZKsync's Elastic Chain project.
The platform is focused on consumers and entertainment applications.
The blockchain provides high throughput, low fees, and security at the level of Ethereum.
The project raised over $70 million from prominent investors, including Binance Labs.
Last week, on May 23, Binance announced the listing of SOPH via a post on X (formerly Twitter).
“We are pleased to announce that Binance will be the first platform to feature SOPHON (SOPH),” Binance announced.
Trading began at 13:00 UTC on May 28. On the same day, SOPH started trading on other major exchanges such as OKX, KuCoin, Upbit, Bitget, and MEXC.
At the Sophon token generation event, 9% of the total supply of SOPH was unlocked for distribution.
Of these, 6% was allocated to first-level farmers and 3% to early participants, zkSync users, and NFT holders.
Why is the price of SOPH falling?
According to Co****** data, the token reached an all-time high of $0.11 shortly after launch but then fell sharply.
In the last day, the price of SOPH decreased by 33.3%. At the time of writing, the altcoin was trading at $0.06.
The decline also wiped out over $80 million in market capitalization.
Additionally, trading volume increased by 2,724.8%, indicating active distribution of tokens by early airdrop recipients.
Currently, the direct utility of SOPH is limited to paying gas fees and decentralizing sequencers.
Thus, it may not yet provide sufficient demand to counteract the sell-off triggered by the airdrop.
And that's not all.
In three months, an additional 20% of the SOPH supply, allocated as rewards for nodes, will begin to unlock weekly.
If market sentiment does not improve, it may exert additional pressure on price declines.
Despite this, on-chain activity instills some optimism.
Data from DefiLama showed that the total value of locked assets (TVL) in Sophon peaked today at $20.28 million.
This represents a 14.1% increase compared to the previous day.
