Ronin: Calm Before The Storm, As Axie Origin Approaches

Ronin is Sky Mavis’ answer to Axie Infinity’s scaling problem. Or rather problems, as there were more than a few that pushed the team to take matters into their own hands. Ethereum’s generalized nature, clunky player onboarding, high gas fees, and slow transaction speeds each played a role in catalyzing Ronin, Sky Mavis’ custom scaling solution, chiefly for, but not exclusive to Axie Infinity. In this piece, we explore what Ronin is, how it’s performed since its launch as a scaling solution, its token RON, and further catalysts for growth that warrant attention in the coming months.

RON is the ecosystem token of the Ronin blockchain. Users pay transaction fees in RON, which are then distributed to the active validators and their respective delegators in exchange for securing the network. 

RON staking will incentivize holders to lock up their tokens to help secure the Ronin network in exchange for RON rewards. Validators will be required to stake 50,000 RON once Ronin DPoS is live. This will be fairly gated in early phases so it will likely be an available option only for select participants. The majority will instead delegate their RON to their preferred validator to stake on their behalf in exchange for a portion of their RON staking rewards. Revenue generated by validators will comprise of Ronin gas fees, Dapp revenues, and RON staking issuance.

Delegator staking rewards can be understood with the following equation:

((Staking issuance reward + gas fees + dapp fees) – commission)

RON has not fared well in terms of price since its launch for a few reasons. Firstly, RON was being farmed by users adding liquidity to the ETH/AXS and ETH/SLP pools on Katana for 90 days prior to its release. This is significant because all of the accumulated RON rewards of those LPs were unlocked with the commencement of RON trading. Naturally, this creates sell pressure as participants look to lock in farming profits. Additionally, RON launched at a time when risk assets have bee