Rebranding Strategies in Web3 Projects: A Closer Look
Rebranding in Web3 projects involves more than simply updating names or logos; it often represents a strategic initiative aimed at enhancing user adoption, attracting new liquidity, or introducing technological advancements. Nevertheless, the effectiveness of rebranding varies greatly—some initiatives capture significant interest, while others face criticism or apathy. This article seeks to uncover the factors that contribute to successful and unsuccessful rebranding efforts.
Overview of Rebranding in Web3
This article delves into the rebranding strategies of three prominent Web3 projects: Sonic, Sky (formerly MakerDAO), and Polygon. It highlights that successful rebranding typically hinges on technological innovation, relevant incentives, and a narrative that resonates with users. In contrast, rebranding can falter when it is overly complex and fails to provide immediate benefits to users, as illustrated by the case of POL.
Case Studies: Sonic, MakerDAO, and Polygon
A growing trend among Web3 projects is the move toward rebranding, which transcends mere cosmetic changes and aims at capturing market interest while improving user experience. This shift signifies a broader industry focus on user-centric applications, seen in wallets like Phantom and Solflare in the Solana ecosystem, alongside Sui Wallet, which rebranded to Slush. To remain competitive, established projects like Fantom, MakerDAO, and Polygon have also embraced rebranding, aligning their narratives and strategies with the evolving demands of their user bases.
1. Fantom’s Transformation to Sonic
Fantom, a notable Layer-1 project from the previous market cycle, transitioned to Sonic in August 2024. This rebranding brought significant enhancements, including faster transaction speeds and a revised ecosystem strategy. A key highlight was the return of Andre Cronje, the former lead developer, whose re-engagement with the project stirred both excitement and debate within the community.
Sonic’s Rebranding Strategy:
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Technological Innovations: Sonic introduced three foundational pillars:
- SonicVM: An efficient virtual machine compatible with EVM, designed for quicker smart contract execution.
- SonicDB: A data storage solution aimed at low latency and operational costs.
- Sonic Gateway: A cross-chain integration tool that simplifies the migration of decentralized applications (dApps) and attracts new liquidity.
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Enhanced User Experience: Sonic revamped its user interface to create a more intuitive and accessible experience while offering robust infrastructure for developers.
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Incentive Programs: The project initiated a large-scale airdrop program, allowing users to earn rewards through various activities, totaling 190.5 million $S coins distributed. Additionally, Sonic launched a $200 million Innovator Program to support developers and new projects.
- Developer Incentives: Through the Fee Monetization mechanism, 90% of transaction fees are allocated to dApp developers, incentivizing their continued contributions to the Sonic ecosystem.
Market Reception and Metrics Post-Rebranding:
According to TradingView, the $S token faced an initial price correction after the Sonic mainnet launch but rebounded impressively, increasing by 213.6% within two months. By May 2025, Sonic recorded 9.5 million monthly transactions and 91,300 active addresses, marking a significant uptick in user engagement since the mainnet’s inception.
2. MakerDAO’s Shift to Sky
On September 18, 2024, MakerDAO, a trailblazer in the DeFi sector, rebranded to Sky, aiming for an ambitious goal of scaling its stablecoin ecosystem to $100 billion and competing directly with Tether. This rebranding encompassed a complete overhaul of its product offerings, tokenomics, and growth strategy.
Sky’s Rebranding Strategy:
The "Endgame" initiative introduced two new core tokens:
- $SKY: A governance token replacing $MKR, with a conversion ratio of 1 MKR to 24,000 SKY.
- $USDS (Sky Dollar): A new stablecoin pegged 1:1 to DAI, providing an alternative within the Sky ecosystem.
Conversion to the new tokens is optional, allowing users to continue using legacy tokens. The new tokens unlock products like the Sky Savings Rate and Sky Token Rewards, enhancing user engagement and rewards.
Market Response and Metrics Post-Rebranding:
In the three months following the rebranding, the $SKY token surged by 125.05%. However, the Total Value Locked (TVL) in the Sky ecosystem stands at $6.14 billion, which reflects both new and legacy infrastructures. The ongoing transition from old to new tokens has led to a slower uptake in liquidity and user activity. The Sky team has also initiated a buyback program for $SKY, demonstrating their commitment to maintaining token value.
3. Polygon’s Transition from MATIC to POL
As part of its Polygon 2.0 framework, Polygon introduced $POL as a new token to replace $MATIC. This transition is not merely a cosmetic change but signifies a strategic shift in the ecosystem’s direction and structure, with a 1:1 conversion process currently in progress.
POL Rebranding Strategy:
The migration aims to solidify Polygon’s status as a competitive multichain infrastructure through:
- User Accessibility: $POL is designed to function without mandatory ownership or staking, simplifying access for users and developers.
- Multi-Functional Utility: The token serves several purposes, including staking, validation, governance, and incentive distribution across the Polygon network.
- Scalability Goals: Polygon 2.0 aims for infinite scalability, allowing a single validator network to support numerous interconnected chains, facilitating blockchain integration across various sectors.
Market Response and Metrics Post-Rebranding:
From January to May 2025, the $POL token experienced a notable decline, dropping approximately 51.8%. This suggests a lukewarm market reception to the rebranding, despite the technical advancements introduced. Additionally, data indicates a significant decrease in user activity on the Polygon PoS network, with daily active addresses and transactions declining sharply over the past year.
Key Success Factors in Rebranding
Successful rebranding transcends cosmetic changes; it hinges on delivering strategic enhancements that resonate with the community. The Sonic and Sky cases illustrate that effective rebranding involves:
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Technological Upgrades: Sonic’s introduction of innovative solutions like SonicVM and SonicDB exemplifies how rebranding paired with meaningful technological advancements can succeed.
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Compelling Incentives: Sonic’s generous airdrop and rewards system contrasted with Sky’s new governance structure and products, showcasing the importance of early incentives in driving user engagement.
- Clear Long-Term Vision: Both projects reinforced their missions through strong narratives—Sonic focused on ecosystem growth, while Sky outlined its ambitious "Endgame" vision to build a competitive stablecoin framework.
Challenges in Rebranding Reception
Not all rebranding initiatives achieve their intended outcomes, as evidenced by Polygon’s experience. Several factors may hinder positive market reception, including:
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Lack of Migration Urgency: The optional nature of transitioning from $MATIC to $POL has resulted in a passive user response, with many lacking motivation to migrate.
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Absence of Tangible Incentives: Unlike Sonic’s proactive incentive rollout, Polygon’s rebranding has not introduced compelling rewards for early adopters, which is critical for generating momentum.
- Focus on Technical Aspects: A lack of new user-facing products accompanying the technical upgrades has contributed to a muted response, as users typically seek more immediate and tangible benefits.
Conclusion
Rebranding in the Web3 sphere is not a simple remedy for regaining market attention; it requires a strategic approach that delivers real value through technological advancements, compelling products, and community engagement. The examples of Sonic and Sky demonstrate that rebranding, when paired with meaningful changes, can rejuvenate interest and broaden adoption. Conversely, Polygon’s experience illustrates that an overly technical focus without immediate user benefits can lead to a lackluster reception. In a competitive landscape, the projects that align their new identities with the genuine needs of their communities are more likely to secure lasting trust and support.
