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RON Farming for Investors and Axie Players

RON farming is currently a very attractive proposition for Axie players to consider. This includes NFT Geld scholars, other guild scholars, but also regular Axie Infinity players who have been earning SLP for playing the game, and earning AXS via leaderboard rewards and tournament participation. In this guide, we’ll break down why RON is attractive, and how you can start farming RON.

Before we jump into specifics, make sure you have read the official RON announcement from the Sky Mavis team.

Background on Ronin Sidechain and RON Token

Originally, Axie was built on Ethereum mainnet. However, today all Axie Infinity assets are on Ronin sidechain built by Sky Mavis. This helped tremendously in helping scale the userbase and has made Axie into one of the most profitable games ever built, sharing in the spoils with the community via SLP and AXS tokens.

The Sky Mavis team has big plans not just for Axie Infinity as a game, but also for Ronin sidechain. It could become the most definitive gaming sidechain on Ethereum. Other crypto games can build on Ronin and tap into the millions of users already using Ronin for Axie. The first steps towards this vision is the release and distribution of the RON token.

The most popular Ethereum sidechain today is Polygon (Matic). However, Ronin has a gaming niche that it could truly own. RON is central to that vision.

Currently, every registered user of Axie gets 100 free transactions a day. This is not sustainable as other games come on board. Instead, we need to move towards a gas model, similar to Polygon. This is similar to Ethereum gas, just much much smaller in $ amount. Every transaction on Ronin will consume a small amount of gas in the form of RON token.

RON Tokenomics

There will be a total of 1 billion RON tokens in existence (1,000,000,000 RON token supply). 10%, or 100 million RON tokens will be released in just 90 days (100,000,000 RON tokens).

RON will be used to pay gas on the Ronin network. This means as the value of Ronin sidechain grows – which can happen both as Axie Infinity grows and other games build on the Ronin sidechain, RON becomes more valuable to users.

RON is somewhat comparable to MATIC currently. MATIC has a native token too, which is needed to pay for gas. Several OG NFT projects like OpenSea support Matic. In addition, many “blue chip” DeFi projects like Sushi and Aave also support Matic. We could expect a similar thriving ecosystem on Ronin sidechain in the future, in addition to other gaming projects that share the decentralization vision.

We don’t have information on how the rest of the 90% of RON will be released. It will likely be a combination of further liquidity incentives on Katana, and incentivizing projects to build on Ronin.

Why RON token farming is currently attractive?

Let’s go back to the numbers again. 10% of all RON is released in the first 90 days. This is fairly aggressive but also means that you can own a good piece of the network early on. This is distributed via “yield farming” with AXS/ETH and SLP/ETH LP tokens.

Why distribute RON this way? Liquidity is an extremely important part of the overall value proposition for play-to-earn. Liquidity is also crucial for tokens like AXS so users can easily enter and exit the ecosystem.

With RON, the Sky Mavis team also launched Katana, their very own Automated Market Maker (AMM) which appears to be a fork of Uniswap V2. Katana allows users to buy and sell SLP and AXS for ETH or USDC (instead of having to rely on central services like Binance).

As a comparable, MATIC is currently at a $20 billion fully diluted market cap. If Ronin were to reach half this level, that would put it at a $10 billion valuation, or $10/RON.

Currently, 555,556 RON are emitted per day for each of the two pairs above.

Let’s take the SLP pool to start (you can run similar numbers for the AXS pool). There is currently 47,731 ETH in that pool.

If you were to add 2 ETH of liquidity (1 ETH + ~55,850 SLP), then you would own 1/47,731 fraction of the daily rewards, which comes to555,556/47,731 = 11.63 RON/day. This runs for 90 days, so your total earnings would be 11.63 * 90 = 1046.7 RON.

The biggest variable here is of course the price of RON. If you assume the $10 price above (half the marketcap of MATIC), then at the end of 90 days you would earn $10,467 in total. The 2 ETH currently cost around $9,000 so this is over a 100% ROI in 90 days.

Note that the calculation above assumes stable pool assets (TVL) which may not be the case. Also, before you try to become a liquidity provider, please read about Impermanent Loss.

What should Axie Scholars do?

Everyone’s situation is unique. However, here is a playbook that could be attractive to scholars saving up their SLP.

Step-1: Convert half the SLP you own to ETH by going to Katana Swap section.

Step-2: Add liquidity to the SLP ETH pair on Katana. You will have one of the tokens slightly in excess (SLP or ETH) due to fees and slippage. Use the max buttons on either of the tokens to check how much you can add. Note that you could always add a little less to ensure the transaction goes through.

Step-3: Go to Farm on Katana and stake your LP tokens. Don’t forget this step! Once the transaction is complete, you can check your RON balance here (shown in WRON – wrapped RON).

And that’s it!

Remember the goal here is to end up with around 50% SLP and 50% ETH. In case you already have some ETH, then you should convert less than half your SLP to ETH. If you don’t do it right the first time, you can always add more liquidity a second time. Remember to stake them in the farm section each time.

This is NOT financial advice. Please do your own research and make sure this is appropriate to your own personal situation before you proceed.

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