Games require fast and cheap transactions and those on Ethereum (ETH/USD) cost $50-100 and take minutes, making its blockchain too expensive and too slow. Things had to change if Axie Infinity (AXS/USD), a blockchain-based trading and battling game that is partially owned and operated by its players, was going to grow and cater to millions of users.
To this end, the team launched Ronin’s mainnet in February of 2021.
An Ethereum sidechain with the community in mind
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Axie created Ronin as an Ethereum sidechain with its community in mind. Sky Mavis, the team behind Axie Infinity, needed a cheap, fast, and reliable network that could meet the demands of the game. Sidechains are independent blockchains, which are compatible with Ethereum and have their own block parameters and consensus model. They run parallel to the Ethereum mainnet.
More efficient transaction processing
Sidechains also enable more efficient processing of transactions. Other examples are Polygon (MATIC/USD) network is and Optimistic Rollups such as Arbitrum. At the moment, Ronin adopts a Proof-of-Authority (PoA) consensus model, a reputation-based system enabling swift transactions due to its centralized nature and limited number of validators.
Binance and Animoca Brands are validators for Ronin
The team selects validators based on their credibility. Validators are staking their reputation, not tokens as with Proof-of-Stake blockchains. Ubisoft, Binance, and Animoca Brands are three examples of validators for the Ronin network.
Most L2 solutions are built with DeFi in mind
The majority of Layer-2 solutions that exist today are developed with payments and DeFi in mind, not gaming. By creating their own blockchain, Axie can be fully optimized for its users’ needs, limiting potential scaling issues that might arise by using existing blockchains. Solutions like zkSync were too new and not properly equipped to fulfill Axie Infinity’s requirements.
Estimated staking yield is 87% APR
Users can stake their AXS to earn yield in a separate AXS staking pool. The estimated yield is 87% APR without taking compounding into account. Rewards are paid out on a daily basis. Users can claim them, taking them out of the pool to increasing their expected APY.
67% of retail CFD accounts lose money