Deciphering how Ethereum Sidechain Ronin is becoming Axie Infinity's growth engine

introduction

Ethereum Series 1 is not dedicated to gaming. The gaming market is fast and inexpensive to measure and support the thousands or millions of microtransactions that occur every day. The user experience should be smooth and satisfying. However, Ethereum's Layer-1 blockchain exchange rate is as high as $50-100, and market speeds are also measured in minutes rather than seconds, so it's too expensive and unprofitable.

Ethereum insufficiency limits Axie Infinity's ability to attract new players and retain existing ones. High fuel costs and network connectivity can lag game performance, reducing the game's initial appeal.

The changes will require Axie Infinity to continue to grow and meet the needs of millions of players. The team started responding to these needs and decided to develop the Ronin backbone in February 2021.

What is Ronin?

Ronin is an Ethereum sidechain developed by the Axie Infinity community. The Sky Mavis team behind Axie Infinity needs a reliable, fast and affordable network to play. The team asked for a solution that would put the game forward, stand the test of time, and adapt it to the needs of fast-paced play. Ronin is their best answer.

What is a sidechain?

A sidechain is an independent blockchain that is compatible with Ethereum, has its own approved structure, the blockchain, and operates in parallel with the Ethereum backbone. Sidechains are one of Ethereum's main Layer 2 scaling solutions and can make products more commercially viable. Another example of a sidechain is the Polygon network. Another popular layer 2 scaling solution is optimistic rollup like Arbitrium.

Ronin is currently pursuing a Proof of Authority (PoA) approval process. These models are reputation-based applications that allow fast operation due to the limited and high number of validators. Users were carefully selected by the team based on their trust, and contrary to blockchain evidence, validators "control" their reputation, not their tokens.

Validators can lose their credibility if they misbehave or disrupt the network. Examples of devices available on the Ronin network include Binance, Ubisoft, and Animoca brands.

Why create your own blockchain?

Before sending Ronin, the team worked with another layer-by-layer, Loom Network. About a year later, the Loom team decided to improve the network, but more for enterprise solutions than for application applications.

This led to different goals for the two groups, and Sky Mavis decided to end the partnership and create their own blockchain to avoid similar incidents in the future.

Most Layer-2 solutions today are DeFi-based and pay more than games. Sky Mavis has created its own blockchain, allowing them to design and customize the features of the channels. The chain has adapted to the needs of the Axie community, reducing future measurement issues by using existing blockchains.

Other solutions, such as zkSync, which uses the ZK rollup consensus model, are too inefficient to meet Axie Infinity's requirements.

Ronin Wallet

A strong cryptocurrency wallet is essential for building user engagement when interacting with the blockchain. Skymavis has designed its own Ronin wallet without using any existing wallet. The team has partnered with Ramp to allow users to directly purchase Axie ecosystem tokens with fiat.

Ronin Wallet allows users to access Axie's treasures and use the wallet as a Chrome browser to connect between computers and build apps on mobile devices. Ronin Wallet supports over 300,000 locations that currently interact with the network, reaching 1.1 million by November 2021.

Ronin addresses everyday

Source: Nansen.ai of January 11, 2022

industry and petroleum

Ronin aims to become an industry-leading gaming blockchain that is best suited to support neighboring markets with incredible value to create millions of games in microtransactions. The Ronin Network is at the heart of Axie Infinity, supporting all trading and holding products, including Axies, Real Estate, SLP, AXS, and Wrapped ETH (WETH).

When it peaked in November, Ronin did over 560% of all Ethereum activity. No legit data yet provides the maximum TPS of the Ronin network, but the network has a blocking time of 3 seconds (average ETH of 13 seconds). Trading Axie Market and sending assets to the network can be done in seconds.

The number of exchanges between Ronin and Ethereum

Source: Nansen.ai of January 11, 2022

Ethereum oil prices fluctuate between 50 and 100 gwei, leading to bad microtransactions. In comparison, Ronin gives a wallet for being able to make 100 free trades in a day. In the future, there will be a slight price increase after the release of the $RON token, but it will be less than $1.

Average Ethereum gas price

Source: etherscan.io (as of January 6, 2022)

What is a Katana? (i.e. Ronindex)

Each blockchain has a decentralized exchange agent (DEX) that allows users to trade free tokens in the ecosystem. Ethereum is Uniswap, Matic is Quickswap, Ronin is Katana.

The katana, better known as the "Ronin DEX", allows users to easily trade tokens in the Axie Infinity ecosystem without leaving the Ronin blockchain. This reduces the need to tie up assets outside of the ecosystem and reduces friction when trading Axie tokens.

DEX has two pools of pools (SLP/ETH, AXS/ETH) and users can choose to become Traders (LP) by competing token pairs. 0.25% of all businesses entering the staking pool are won by vendors who benefit from their share of the staking organization.

10% RON coins will be distributed to LP in 90 days to support LP and RON tokens will be distributed to the Axie community in the form of two bets. Becoming an LP is now the only way to get RON tokens, and this benefit is enough to generate $900 million in revenue for both pools.

already fluidity

Source: https://katana-analytics.roninchain.com/home (as of January 11, 2022)

The monetary value of these lakes has steadily decreased since their creation. However, more accurate results can only be obtained by digging into the string data. If you look at the AXS-WETH pool, you can see that the equivalent token has grown over time. This means that the LP sank net into the pool, and the loss in the value of the USD is not due to the devaluation of the tokens, but to the exchange rate of the tokens.

Changes in the WETH balance in the AXS-WETH pool over time

Source: Nansen.ai of January 11, 2022

AXS Staking

In addition to the Katana Liquid Pool, there is a separate AXS Staking Pool that users can earn by staking AXS. Unlike Katana Pool LP, this pool does not require users to share the same amount of WETH as AXS.

The expected staking return is 87% annual rate (APR) excluding interest. Freebies are released daily and users can request freebies, remove them from the pool, or join their AXS freebie in the pool to increase their income or annual (APY).

AXS Staking Kanban

Source: https://stake.axieinfinity.com/ As of January 11, 2022

Currently, more than 20.7 million AXS have been committed, representing approximately 30% of shipments. The lake's dollar price has risen steadily since lake staking began in October, but the AXS price has generally declined and consolidated. The number of AXS wallet holders has increased steadily since May, with 90% of tokens held for at least 90 days.

Save USD value on staked AXS

Source: Nansen.ai of January 11, 2022

Distribution of tokens for AXS keys

Source: Nansen.ai of January 11, 2022

Unique address number with AXS

Source: Nansen.ai of January 11, 2022

Transfer Assets to Ronin

There are two ways to convert Axie Infinity Ecosystem Tokens to the Ronin Network. One is to connect ERC-20 ETH, AXS, and SLP through your Ethereum wallet, and the other is to replace Ronin AXS and SLP through Binance.

Ronin Choj

As Ronin is a sidechain, the bridge will need to convert ERC-20 tokens to the Ronin network. Users must have an Ethereum wallet such as MetaMask to interact with Ronin Bridge. The Ronin Bridge is now the third largest bridge of its type after the Polygon and the Avalanche.

The interface makes it easy to switch between two methods, is easy to use, and typically completes the switch in 10-15 minutes. Watch a video produced by the Sky Mavis team here.

Superior to EVM deck

Source: Nansen.ai of January 11, 2022

In addition to the cost of sending tokens to your Ethereum wallet, connecting will increase the cost of the Ethereum network. This makes small business unattractive and creates a negative impact on most users. We recommend sending Ronin AXS and SLP directly from your Ronin Wallet at Binance at all times.

Binance

Users with a Binance account can send Ronin AXS and SLP directly from their Ronin wallet. Because the exchange was done on the Ronin network and not on Ethereum, the cost was low, usually less than $1. It costs 1 SLP ($0.03) to send SLP to the Ronin wallet, which is 1/1116 of the price of using Ethereum. network.

Binance SLP Deduction and Deposit Fees

Source: Binance.com, January 4, 2022

The withdrawal process is similar to any other token, the user enters the Ronin address, selects the value and sends the tokens.

Current events and future plans

Standardization of PoA means that the network is essentially middle-of-the-road as users are limited and ordinary people are unable to run nodes. This allowed the team to release patches quickly and resolve any issues that might arise, but it tested the "creative gamer" spirit that Axie Infinity wanted to be. .

To remedy this situation, Sky Mavis plans to gradually reduce the network as Ronin becomes more efficient and stable. The team recently took the first step in the difficult decentralization process by announcing the first community-managed electricity management platform by 50 AxieChat community members.

Beyond that, the team is committed to adapting the transformation of the blockchain space and is willing to shift the consensus model to a more distributed model rather than a broader solution. An example is zkSync, which uses the ZK rollup trusted model.

If Ronin is mature and stable, other game developers can make games on Ronin. This allows the network to scale beyond Axie Infinity and potentially become a blockchain for future blockchain games.

Therefore

Launched less than a year ago, Ronin Network has already proven itself to be a powerful solution. The birth of Ronin led to a boom in Axie Infinity and Chain Games (GameFi) / Play-for-earnings. As users discover improvements, new users can have fun for the game. Ultra-fast and low fuel costs make the game market vibrant and the volume of modern transactions far beyond that of Ethereum.

The Ronin network is still mediocre and punchier than the community needs, but Sky Mavis has taken similar steps to determine the network. Adding community proofs and distributing RON tokens to LPs on the Katana DEX is just the first step in the distribution process.

Ronin is still in its infancy, but he will be excited to see how blockchain develops over time. Is Ronin a good choice for blockchain in games? Let's wait.