RON's "first show" was cold, Ronin and Axie Infinity "one loss and one loss"?
In the field of public chains, Ronin Chain is a special existence. It was born due to the lack of performance and experience of Ethereum, and it is difficult to support the Axie Infinity game. The game developer Sky Mavis created Ronin and migrated Axie to this chain in May 2021 superior.
Closely linked to the phenomenal game Axie Infinity, Ronin has attracted attention since its inception. On November 5, 2021, Ronin launched the distribution of the on-chain token RON in the form of liquidity rewards. Since the reward period lasts for 3 months, current liquidity contributors can only view the amount of rewarded RON, but cannot claim it. On January 6, FTX launched the RON perpetual contract. After market games, the futures price of RON remained at around $4.3.
This price did not perform as well as participants expected. During the liquidity reward stage, the rewarded “shovels” dropped sharply——AXS, SLP, and ETH dropped by 50.3%, 79.5%, and 29.3% respectively. According to the current futures price of RON, the benefits of contributing liquidity are far from being able to compensate for the losses caused by the decline in assets.
Ronin's "first show" in the market has been cold. Looking at Axie Infinity, its recent operating conditions are not good. The data shows that the game’s single-day revenue has dropped from the peak peak of 17.5 million US dollars to about 5.8 million US dollars, and the trading volume of the NFT market has also dropped from more than 30 million US dollars in a single day to around 6 million US dollars.
Some followers believe that if Ronin wants to develop further, it should not only rely on Axie Infinity, but also strengthen the layout of other applications on the chain as soon as possible.
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RON "First Show" Futures Price Drop
As the exclusive sidechain of the phenomenal blockchain game Axie Infinity, Ronin Chain has attracted much attention since its inception. It is different from Solana and other new public chains that aim to cover everything. Ronin's goal from beginning to end is to become the most commonly used Ethereum side chain for NFT games.
This vision has long been believed by many, and for no other reason than GameFi leader Axie Infinity has migrated to Ronin in May 2021. Both are developed by the Sky Mavis team.
When Axie Infinity was in its prime, the expectations carried by Ronin were infinitely magnified. Until November 2021, Ronin launched the distribution of the native token RON, attracting a large number of players to contribute liquidity to obtain mining rewards.
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RON Liquidity Mining Page
The initial liquidity mining will last for 3 months, during which 10% of the total RON will be generated, which is 100 million RON. As of January 6th, RON is still in the reward stage. Players can only view the number of rewarded tokens, but cannot claim them. On the same day, the FTX trading platform launched the RON perpetual contract, which means that before RON officially enters circulation, the futures price after the game will be generated in the open market.
At 10:00 p.m. on January 6, the RON perpetual contract officially appeared on the FTX market. RON futures opened at US$4.95 and rose to US$5.36 at the highest, but then showed a downward trend. As of January 7, RON futures fell to US$4.3, a drop of 13% from the opening price.
This market performance upset liquidity contributors. At the beginning of liquidity mining, many participants expected RON to be $10, but today's futures price is less than 50% of the expected value.
You should know that players don't contribute liquidity for free, but they need to hold or purchase two tokens, AXS and SLP, in the Axie Infinity game, and then pair them with WETH for pledge. Since November 5th, the prices of the three assets have all dropped to varying degrees. Among them, AXS fell from $145 to $72, a drop of 50.3%, SLP fell from $0.095 to $0.0195, a drop of 79.5%, and ETH It fell from US$4477 to US$3165, a drop of 29.3%.
The "shovel" of mining has fallen sharply, causing considerable losses to liquidity contributors. Just when people pinned their expectations on RON, the "first show" of the RON futures market poured cold water. Mining players found that based on the current futures price of RON, the mined mines are far from being able to make up for the losses caused by the price drop of the "shovel".
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Axie Infinity operating figures slip
Ronin, who has a halo on his head, was criticized by some participants for his mediocre market performance. This result seems to have been foreshadowed. In the early days when Ronin started token distribution, GameFi was still a market hotspot in the encryption circle, but now the popularity of this sector has dropped significantly. Coupled with the recent sharp correction in the entire encrypted asset market, RON’s poor performance can also be expected.
Of course, the decline in Axie Infinity's operating conditions is undoubtedly the main reason for RON's poor performance. At present, the ecosystem on the Ronin chain is particularly single. The largest application is Axie Infinity, followed by DEX Katana. However, users lack transaction needs on this DEX, and mining RON is the first application scenario. In addition, there are only infrastructure tools such as cross-chain bridges and blockchain browsers left on the Ronin chain.
It is no exaggeration to say that the market valuation of Ronin at this stage is highly dependent on the operation of Axie Infinity. In recent months, Axie Infinity's total revenue and NFT transaction volume have fallen sharply, and the popularity of the game has been greatly reduced.
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Axie Infinity's total revenue continues to decline
The volume of NFT transactions on the Axie marketplace has also continued to decline. In August last year, the single-day NFT transaction volume could exceed 30 million US dollars, and the recent single-day transaction volume was only about 6 million US dollars.
Some players commented that Axie Infinity has entered a downward spiral, the price of Axie elf NFT keeps falling, and the main source of income of "earn while playing" SLP (Love Potion) has also dropped sharply, making it difficult for players to easily earn income from it. Gaming isn't as active as it used to be.
In August 2021, Axie Infinity also repeatedly attracted media reports because its monthly revenue exceeded US$334 million, surpassing the mobile game Glory of Kings.
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Ronin ecological application to be expanded
Ronin's single ecology is a phased fact, and it has to face the situation of "one damage and one damage" with Axie Infinity. In a short period of time, this situation is difficult to change.
Some Ronin followers believe that if the public chain wants to develop further, on the one hand, it needs Axie Infinity to boost its performance, and on the other hand, it needs to strengthen the ecology on the chain as soon as possible.
In the past year, Axie Infinity has accumulated 2.9 million users. Although its current situation is much lower than its peak period, Axie is still the vane of the GameFi field, and every move attracts the attention of the outside world.
Some players once pointed out that the limitation of Axie Infinity is mainly the single gameplay and lack of playability. The most important thing is that the activity of the game is related to the price of SLP. When the price of SLP is too low, players will leave due to insufficient income from "gold". Judging from the latest trends of Axie Infinity, it is starting to solve these two major problems.
On December 31, Axie Infinity released a game upgrade notice on the official forum. It will introduce a gameplay code-named Project K in 2022, where "K" is the abbreviation for Kingdom. In the new "Elf Kingdom" product, the game of virtual land transaction will be introduced and a new game scene will be established.
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Axie "Project K" game design sketch
According to the plan, Project K will gradually be deployed in existing games in multiple stages in the future.
In the first phase, there will be more focus on virtual land management (production, resource gathering, construction and trading); There will be more focus on team strategy games (defense, combat, conquest) etc. In addition, in order to achieve a good game experience and visual effects, the team no longer uses the previous 2D art style, and rewrote the core engine with 3D technology, allowing players to enter a more realistic elf world.
The emergence of more gameplay and new elements will help Axie Infinity recall lost old players and attract new users in the future. In terms of the economic model of the game, especially the output of SLP, the Axie team also plans to change.
In the current game version, there is no limit to the output of SLP. Although the elf breeding in the game needs to consume SLP, the speed of minting SLP is still far faster than the speed of destruction, which leads to the continuous increase of SLP selling pressure and the continuous decline of asset prices. On January 5th, Axie Infinity released the "Economic Balance" development log, stating that it will reduce the inflation rate of SLP by reducing the supply of SLP and increasing demand.
In terms of supply reduction, Axie will reduce the SLP release rate of daily tasks, PvP and PvE, and replace the reward output of SLP by increasing AXS rewards; at the same time, it will reduce the SLP generated through automation and robotics, making it easier for real players make money. In terms of increasing demand, Axie will set up a repurchase mechanism and expand the usage scenarios of SLP in terms of gameplay.
Gameplay upgrades and improvements to the economic model are a positive signal for Axie Infinity, which is stuck in a downtrend. When the operation of Axie starts to recover, the Ronin chain is also expected to win more expectations.
Of course, as a public chain perpendicular to NFT games, Ronin still needs to accelerate the development of its own ecology and build more applications and games.
Judging from the current performance, compared with Ethereum, Ronin has greatly improved in terms of transfer efficiency and transaction speed, and its user experience is similar to blockchains such as BSC and Solana. Since RON has not yet been officially circulated, transfers on Ronin do not require gas fees, and the gas fee consumption level of the chain is not yet known. However, it is certain that as a public chain that needs to carry high-frequency game operations, the gas fee on Ronin’s chain must be relatively high. Only when Ethereum is greatly reduced can it have the competitiveness of the chain.
Some GameFi industry observers pointed out that Ronin has a unique positioning vertical to NFT games. At the same time, with the help of Axie Infinity, it became famous at the beginning of the mainnet launch, laying a good foundation for subsequent development. Both GameFi and Metaverse are in the early stages of development, and are expected to usher in more intensive deployment and iteration in 2022. If Ronin can become the birthplace of popular chain games in the future, its imagination space will also expand accordingly.
