Sophon shutters Layer 2, moves development to Base

Sophon will shut down its proprietary Layer 2 blockchain and move development to Base, the Ethereum Layer 2 incubated by Coinbase, to focus on consumer-facing applications. The company has raised $70 million to date and expects the change to reduce recurring infrastructure costs and free capital for product development.

Sophon reported it spent about $3.4 million a year maintaining the chain, covering chain infrastructure, rollup-as-a-service, data, analytics and tooling vendors. Sunsetting the network is estimated to cut annual burn by roughly $3 million, extend the company’s runway and reallocate engineering and marketing resources to apps built on Base.

The SOPH token will no longer function primarily as the blockchain’s gas token. The company plans to use a portion of revenues from its product portfolio to repurchase SOPH in the open market and burn those tokens, linking token supply reductions to commercial revenue. SOPH is trading near $0.0048 and has fallen about 86% over the past year.

Sebastien (Seb), a co-founder of Sophon, described the strategic rationale: “The bet is that the value has never been in who runs the rails, but rather always been in the products built on top.” He also outlined the token policy: “The new strategy centres on buyback and burn. Significant portions of revenues generated by Pyre, XP, SophEarn, SophPlay, SophAI will be used to buy back SOPH on the open market and burn it — tying the token directly to the commercial success of a growing portfolio of consumer products.”

Sophon plans five main consumer products on Base. Pyre, scheduled to launch early next month, is a DeFi-enabled, gamified neofinance app where every payment above $1 creates a game entry. At launch Pyre will include two games, Inferno and Splash, with a third game to follow. The app presents dollar-denominated flows so users interact without direct crypto complexity; the company says AI agents can act on users’ behalf.

Pyre will also aggregate DeFi yield vaults, offer fractional tokenized equities trading 24/5 through Dinari, provide leveraged perpetual futures via Avantis and Hyperliquid, and integrate prediction markets through Polymarket for users outside the U.S. An AI-powered quant signal product is under development for paying subscribers. Revenue channels include vault performance fees, trading and swap fees, and subscription tiers.

SophEarn, the standalone vault product, is set to launch next month. SophPlay, an API exposing the gamification tools to external developers, is expected in the third quarter. XP.app, a payments product aimed at high-net-worth users with custom payment hardware, is planned for the third or fourth quarter. SophAI, an AI-focused product the company has been developing, is expected to enter alpha later this year.

The company lists the immediate benchmarks as the launches of Pyre and SophEarn next month, SophPlay in the third quarter, XP.app later in the year and a SophAI alpha before year-end.