Axie Infinity is a mystery to thousands of studios that are working on and preparing to enter blockchain games. Why can the mediocre gameplay (gameplay) create a billion-dollar miracle? This article reveals an important aspect of Axie’s secret to success — the private blockchain. In February 2021, after three years of exploration, the Axie team launched their dedicated chain, Ronin, to provide players with free and fast blockchain interaction, which immediately exploded in popularity. Thousands of hard work will eventually be rewarded. Ronin is a ronin, a warrior without a master. Axie is named after this to demonstrate its determination to control the blockchain infrastructure independently. Although time has passed, the environment has not changed. The improved performance of the new public chain and layer2 is being exhausted by the outbreak of DeFi, NFT and chain games. However, the public chain is congested and the cost of use is rising. The first to be hurt is the chain game. Only those who have a customizable dedicated chain and keep low costs are eligible to participate in the main game of chain game competition - the competition of gameplay.
--Founder of Octopus Network: Liu Yi
Ethereum's Layer 1 cannot meet the needs of blockchain games. Thousands or even millions of micro-transactions occur in the game every day, so it has certain requirements for transaction speed and cost, so as to ensure the further expansion and development of the game. At the same time, the user experience of the game must also be guaranteed, and gamers need to have a smooth and enjoyable gaming experience. However, Ethereum's Layer 1 charges transaction fees ranging from $50 to $100 per transaction, and its transaction processing speed is measured in minutes rather than seconds. Therefore, Ethereum's Layer 1 chain is not only slow for chain games, but also quite expensive.
Ethereum has limited the development of Axie Infinity, making it difficult to attract new players and retain existing players. In addition, the high gas fee and network congestion have caused the game economy to stagnate, or even waste all previous efforts. If Axie Infinity is going to grow and accommodate millions of players, someone has to step up and make a difference. So, to solve this problem, the team decided to take matters into their own hands and launched the Ronin mainnet in February 2021.
Ronin is a sidechain for Ethereum, created exclusively for the Axie Infinity community. Back in the day, Axie Infinity's team, Sky Mavis, wanted a reliable, fast, and cheap network to support game development. They needed a game-first scaling solution that would not only stand the test of time, but also meet the high demands of the game's rapid growth. Thus, the Ronin chain came into being.
Sidechain is an independent Ethereum-compatible blockchain that has its own consensus model, block parameters, and Runs in parallel with the Ethereum mainnet. They are one of the main Layer 2 scaling solutions on Ethereum, enabling transactions to be processed more efficiently. In addition, the Polygon network is also one of the side chains, which also includes Arbitrum and other popular Layer 2 scaling including Optimistic Rollup plan.
Ronin currently adopts the Proof of Authority (PoA) consensus model, which is a reputation-based system that can Close the transaction quickly. Validators are a group of people carefully selected by the team based on their reputation, and unlike the "proof-of-stake" blockchain, validators "stake" their reputation instead of Token. If validators misbehave or negatively impact the network, they risk losing their reputation. Validators for the Ronin network include platforms such as Binance, Ubisoft, and Animoca Brands.
Before the Ronin chain was created, the team I have cooperated with Loom network, which is a Layer 2 alternative expansion solution. After about a year, the Loom team decided to move away from optimizing the network for user-facing applications and instead explore new solutions for enterprises. This decision also means that the two teams of Sky Mavis and Loom have a disagreement on the goal, so Sky Mavis terminated the partnership between the two teams. Then to prevent such problems from happening again, they decided to create their own blockchain.
Today, most existing Layer 2 solutions serve DeFi and payment functions, not games. After creating its own chain, Sky Mavis can decide and design the functions and characteristics of this chain by itself. This chain can fully address the various needs of the Axie community, thereby avoiding the expansion problems that will arise in the future when using the existing blockchain. In contrast, other potential solutions, such as zkSync using the ZK-rollup consensus model, Not yet mature enough to provide a proper infrastructure for Axie Infinity.
The pros and cons of Crypto wallets are crucial to creating a good user experience . Instead of using an existing wallet, Sky Mavis created its own Ronin Wallet. With the efforts of the team and Ramp, users can directly use legal currency to purchase Tokens of the Axie ecosystem . At the same time, the wallet allows users to keep custody of their Axie game assets and is available as a Chrome extension on desktop and as an app on mobile devices. Not only that, the number of daily active interaction addresses of the wallet has exceeded 300,000, and reached a peak of 1.1 million in November 2021.
Source: As of January 11, 2022 Date Nansen.ai website data
Ronin chain is the industry-leading The emergence of the game blockchain, which makes real-time transactions possible, not only greatly reduces transaction fees, but also allows millions of game micro-transactions to proceed smoothly. It can be said that this network is the core of Axie Infinity. While improving transaction efficiency, it also keeps various game assets, such as Axies, Land, SLP, AXS, and Wrappped ETH (WETH).
At its peak in November, Ronin processed more than 560% of Ethereum's total transaction volume. While we haven't seen official documentation on the Ronin network's maximum TPS yet, its block time is 3 seconds (13 seconds on average for ETH), which means it can execute Axie market transactions and network assets in seconds send.
Source: Nansen.ai website data as of January 11, 2022< /blockquote>
Ethereum’s gas fee has been hovering between 50-100gwei, which is still a lot of money for all parties involved in microtransactions cost of. With Ronin, the first 100 transactions per wallet per day are free. Even if the transaction fee will increase after the RON coin is released, it will not exceed $1.
Ethereum average gas fee
< p style="text-align: center;">Source: as of 2 022 Data from etherscan.io website on January 6th
Katana - Ronin Decentralized Exchange
Each blockchain has its own flagship decentralized exchange (DEX), which is a place where users can freely exchange tokens within the ecosystem. and Ethereum's Uniswap and Matic's Quickswap, Ronin also has its own DEX——Katana. In Katana (perhaps the name Ronin DEX is more familiar to everyone), users can easily exchange Tokens within the Axie Infinity ecosystem without leaving the Ronin chain. With this feature, assets within the ecosystem no longer need to be transferred across chains, and the friction generated during the Axie Token exchange process is also reduced.
There are two pledge pools in this DEX, namely SLP/ETH pool and AXS/ETH pool. Users can become Liquidity Providers (LP) by staking the corresponding Token pairs, and each LP can obtain 0.25% income from each staking pool transaction, which is proportional to their share in the pool. 10% of RON coins will be distributed to liquidity providers within 90 days as an incentive, and this is also a way to distribute RON coins to the Axie community. Currently, becoming a liquidity provider is the only way to earn RON, a mechanism that brings $900 million in liquidity to the two aforementioned staking pools.
Liquidity on Katana
After the initial run, the dollar value of these pools has gradually declined. However, we can see the full picture by digging into the on-chain data. If we look at the AXS-WETH pool, the token balance has been increasing over time. This situation shows that there are liquidity providers joining the pool all the time, and the decrease in the value of USD in the pool is due to the fluctuation of Token price, rather than the reduction of the number of Token pledges.
AXS balance in the AXS-WETH pool changes over time
Source: As of 20 11 Jan 22 Nansen .ai website data
The WETH balance in the AXS-WETH pool changes over time
Source: As of 20221 Nansen.ai website data on January 11
In addition to the liquidity pool on Katana, it also has a separate AXS staking pool, users can earn income by staking AXS. This pool is different from the liquidity provider pool on Katana in that it does not require users to pledge the corresponding amount of WETH while using AXS.
The expected annual rate of return on staking is 87%, which does not include the benefits of compound interest. The staking pool will generate returns every day, and users can either choose to withdraw it from the fund pool or put it back into the AXS staking pool to further increase the final return.
AXS Pledge Statistics
Source: https://stake.axieinfinity.com/website data< p>
At present, the total amount of pledged AXS exceeds 20.7 million, accounting for about 30% of the circulation. While the price of AXS has generally trended downwards and sideways during this period, the USD amount has been growing steadily since the pool was launched in October. Not only that, but the number of wallets holding AXS has also been increasing since May, and 90% of them have a holding period of more than 90 days.
Cumulative USD Value of AXS Staking
Source: Nansen.ai website data as of January 11, 2022blockquote>
Token distribution of AXS holders
Source: Deadline 2 January 11, 022 Nansen.ai website data
Holding an independent address of AXS
< br>Source: Nansen.ai website data as of January 11, 2022
Asset direction Transfer of Ronin chain
Currently, there are two main ways to transfer the Token of the Axie Infinity ecosystem to the Ronin network: 1. Cross-chain from the Ethereum wallet Transfer out ERC-20 ETH, AXS and SLP; 2. Transfer out Ronin AXS and SLP from Binance.
Ronin cross-chain bridge
As a side chain, Ronin needs a cross-chain bridge to integrate ERC -20 Token to access the network. If users want to use the Ronin cross-chain bridge, they need to set up an Ethereum wallet such as MetaMask. Calculated by the total number of transfers, the Ronin cross-chain bridge currently ranks third, second only to Polygon and Avalanche. The advantage of the Ronin cross-chain bridge is that it not only supports two-way transfer, but also has simple operation and high efficiency, and each transaction usually only takes 10-15 minutes to complete. (A video guide by the Sky Mavis team can be viewed here )
The EVM cross-chain bridge with the highest total transaction volume
Source: Nansen.ai website data as of January 11, 2022
However, cross-chain behavior will generate Ethereum network fees, and Fees for sending tokens to Ethereum wallets. So, for microtransaction parties and most users, this is not a small hindrance. So if possible, we can directly use Binance to send Ronin to/from Ronin wallets AXS and SLP.
YesBinance account users are able to send Ronin AXS and SLP directly to or from their Ronin wallet. Since these transactions are network rather than Ethereum, so its fees are also much lower, typically less than $1. Compared to using the Ethereum network, sending SLP to a Ronin wallet costs only 1 SLP ($0.03) or the transaction 1/1116 of the price.
SLP Binance withdrawal and deposit fees
Source: Binance.com website data as of January 4, 2022
The withdrawal process is similar to other tokens , users only need to key in their Ronin address, select the amount and send the token. (BinanceHere there is a specific operation guide)
Current deficiency and future planning
Under the PoA consensus model, the network will become relatively centralized because the network has a limited number of verifiers and ordinary people cannot run a node. While using this model allowed the team to quickly roll out upgrades and fix any issues that might arise, it defeats Axie Infinity's original intention of giving players ownership of the game. In order to alleviate people's concerns, Sky Mavis plans to gradually decentralize the network after Ronin develops more complete and stable. They recently launched their first community-managed validator node, supported by the AxieChat community managed by 50 members, this node also marks their first step towards decentralization.
In addition, the team is also actively paying attention to various developments in the blockchain field. Once there is a consensus model that can be changed to a decentralized model They will be more than willing to make this adjustment in the future. One such example is zkSync, which uses a ZK-rollup consensus model.
Once Ronin becomes mature and stable, other game developers will choose to build their games on Ronin. In this way, Ronin will not only serve the game Axie Infinity, but may become the preferred blockchain for future blockchain games.
Although it has been live for less than a year, the Ronin network has proved to us It is an effective game expansion solution. Its birth not only achieved the rise of Axie Infinity, but also set off a GameFi and Play-to-earn. With the continuous improvement of user experience, new users are more willing to try to get in touch with blockchain games. At the same time, with the blessing of faster speed and lower cost, the game economy is becoming more and more vibrant, and its daily transaction volume even exceeds that of Ethereum.
While the network has some shortcomings and is more centralized than the community expected, Sky Mavis is already working on decentralizing it. They first expanded the team of community validators and distributed RON coins to liquidity providers on the Katana decentralized exchange, and these are only the first steps of Ronin towards decentralization. At present, Ronin is still in its early stage, and it is very exciting to see how the blockchain will develop in the future. As for whether Ronin will become the preferred blockchain for chain games in the future, I believe time will tell us the answer.