In the previous crypto cycle, AXS pulled off a 60x from May to November 2021, right after Axie Infinity migrated to Ronin in April. While RON has seen comparatively lackluster price action (down ~50% since its launch at $4.29 in January 2022), could this upcoming bull market be RON’s time to follow in AXS’ previous footsteps?

The blockchain for game developers

Ronin is an Ethereum sidechain built specifically for gaming, and is developed by Sky Mavis, the same team behind Axie Infinity. Ronin was envisioned to scale Axie Infinity with cheaper and faster transactions, and to also serve as an ecosystem to facilitate the building of future NFT games.

Since the launch of Ronin mainnet, Ronin has released its own DEX (Katana), NFT Marketplace (Mavis), and more. But with the decline of the P2E industry, Ronin’s TVL has dropped nearly 90% from its all-time highs of just under $1.5 billion at the end of 2021, to its present value of $168 million.

Despite this setback, the Ronin team has been consistently building and shipping, having announced Ronin Forge, a grant program that aims to onboard game studios to build on Ronin.

More recently, Ronin’s head researcher unveiled plans to enable zero-knowledge Ethereum Virtual Machines (zkEVM) on Ronin, with the first zkEVM chains slated to launch sometime in Q1 2025. This transition allows game builders to leverage the Polygon Chain Development Kit (CDK) to launch their own zkEVMs on top of the Ronin mainnet, thereby opening the door to smoother gaming experiences on Ronin.

Token distribution and utility

Out of Ronin’s max total supply of 1 billion tokens, total unlocked supply is just over 500 million tokens, of which nearly 340 million are in circulation. The token supply is earmarked as follows:

• Rewards: 25%.
• Community incentives: 30%.
• Sky Mavis: 30%.
• Ecosystem fund: 15%.

This gives Ronin sufficient capacity to incentivize the development, growth, and usage of its network, and with tokens being unlocked on a continual basis til the start of 2031, excessive and sudden dilution is kept at bay.

As for token demand, RON is used for community governance as well as paying for transaction gas fees on Ronin. RON is also paired with new tokens for liquidity provisioning on Katana, and it serves as the transaction currency on Mavis.

Games built on Ronin typically also use RON as payment currency for transactions such as game item purchases, and RON holders/stakers may additionally receive airdrops, whitelist opportunities, and launchpad allocations for projects building on Ronin.

Of course, RON is also instrumental in network security, with validators needing to hold and stake RON to participate in validating blocks.

Users can also stake their RON through validators to earn a share of their RON rewards, which currently stands at an APR of 12-13%, higher than StakingRewards’ reported industry average of 5.08%.

Finally, with the launch of zkEVM, 250,000 RON will also be required for developers to run a Ronin validator before launching their chain.

Bull and bear cases for RON

Clearly, as a network token, there is significant organic demand for RON, but it should be noted that this demand is proportional to activity on the Ronin Network. If the Web3 gaming industry does pick up again, transaction activity (NFT, in-game item purchases) on Ronin will likely follow suit, generating more demand for RON to pay for transactions. To substantiate this claim, the first three days of Moku’s Genesis NFT Launch on Ronin led to a trading volume of nearly 200,000 RON.

As the network collects more fees from increased transaction volumes, staking yield may become even more attractive, thereby intrinsically motivating ecosystem participants (holders, stakers, validators) to stake RON.

Moreover, post-Ronin Forge, more games may be built on Ronin, resulting in users stacking RON to gain exposure to airdrop/launchpad allocations. Current games in Ronin’s pipeline include the hyped Lumiterra and the Forgotten Runiverse. And the final tailwind lies with the launch of zkEVM, as buying pressure on RON will be further ignited with developers needing RON to launch their chain.

With these bullish sentiments around RON, it is not surprising to observe RON dominating mindshare within the blockchain gaming industry.

On the flipside, the contrary has to be acknowledged. Narratives in the crypto space are ever vacillating, and there is a non-negligible chance that the blockchain gaming theme fails to return to the height of the 2021 P2E peak.

Furthermore, competition is rife given the myriad of blockchain gaming chains on the market, such as Immutable, Skale, and Beam.

It would also be instructive to note that Ronin’s planned zkEVM rollout does not render it a special snowflake, as both Immutable and Skale support ZK scaling with Immutable zkEVM and Skale’s Levitation Protocol.

In totality, while RON’s tokenomics and use cases are pretty decent, I find it hard to convince myself that the blockchain gaming industry will run it back turbo and return to its heyday.

In the crypto economy, narratives change faster than the blink of an eye, and I am of the belief that this cycle’s narratives will be grounded in memes, RWA, AI, and DEPINs (but hey, that’s just my opinion). Hence, RON is a token that I will not be looking to accumulate anytime soon.

That being said, gun to my head, if I had to choose a gaming infrastructure coin, I would instead go with Skale (SKL) given its partnership with Unity, zero gas fees and recent introduction of Chain Pricing, AppChain and ZK-Rollup scaling approach, and AI integrations (Exorde and PaLM AI).