Sonic Labs has launched USSD, a dollar-denominated stablecoin aimed at restoring a dependable pool of liquidity for trading and lending on its blockchain. The rollout comes as the network faces a steep contraction in onchain capital. Recent data cited by the project shows Sonic’s total value locked has dropped to about $34 million, down 97% from its $1.1 billion peak in May 2025. Its native token S was priced at $0.04074 on March 10, 2026, which is 96% below its $1.03 high.
US Treasury products form the backing structure
The defining feature of USSD is its reserve model. Sonic Labs says the stablecoin is backed one-to-one by U.S. Treasury products, with those assets managed by BlackRock, WisdomTree, and Superstate. That gives the token a reserve base tied to traditional financial instruments rather than relying only on crypto collateral or algorithmic balancing.
For the issuance framework, SLabs used infrastructure from Frax Finance. The setup is designed to support stablecoin minting in a streamlined format. At launch, users can mint USSD with zero fees by depositing USDC or USDT, lowering the cost of moving capital into the new asset.
LayerZero extends USSD beyond Sonic
USSD is also being positioned as a cross-chain liquidity tool instead of a token confined to one network. Through LayerZero, users can mint and use the stablecoin on more than ten blockchains, including Ethereum and Arbitrum. That design gives outside capital a more direct route into the Sonic ecosystem.
The token is also compatible with Circle’s USDC, allowing users to swap back into USDC when needed. For a network trying to recover liquidity, that kind of entry and exit flexibility matters. It reduces friction for users who want exposure to Sonic without being locked into a single settlement path.
Treasury yield is central to Sonic’s liquidity plan
The USSD launch also signals a broader shift in how Sonic Labs wants to address liquidity weakness. Based on the source material, income generated from the Treasury-backed reserves could remain inside the ecosystem instead of flowing to outside issuers. Sonic says that capital could be directed toward buybacks of the S token or developer incentives for builders on the network.
S remains far below its previous high, and TVL is still a fraction of its earlier peak. Whether USSD can reverse that trend will depend on user and developer adoption. What is clear from the launch structure is that Sonic is tying together stablecoin issuance, cross-chain access, and Treasury-backed reserves as one liquidity strategy.