Ronin to transition to Ethereum layer 2 from gaming sidechain on May 12

The Ronin gaming blockchain, the framework behind popular crypto gaming franchise Axie Infinity, has announced plans to transition to an Ethereum Layer-2 network built on the OP stack (Optimism) via a hard fork on May 12. 

The transition will happen at block height 55,577,490, with the migration expected to begin around 15:16 UTC on Tuesday May 12 bringing with it about 10 hours of network downtime. During the outage, all transfers, swaps, smart contract interactions, and on-chain gaming activity will be suspended. The network has urged users to wrap up any and all pending transactions before the migration process begins.

Why has Ronin given up its sidechain independence

Ronin launched in 2021 because Ethereum’s scaling infrastructure couldn’t support the throughput the Axie Infinity gaming service demanded. Now, four years later, the entire landscape of Ethereum’s infrastructure has changed.

Ethereum transaction costs have fallen, layer-2 tooling has developed to its most matured state, and the argument for an integration with the mainnet to further tighten the network’s security has only grown stronger.

That security argument carries particular weight for Ronin. In March 2022, attackers linked to North Korea’s Lazarus Group compromised five of the network’s nine validators and drained approximately $625 million from the Ronin bridge, an exploit which still remains the largest cross-chain bridge exploit in DeFi history. The network then suffered a second, smaller attack in August 2024.

By adopting the OP Stack and inheriting Ethereum’s mainnet security, the network aims to close the vulnerability gap that provided the platform for such exploits. The network also plans to use EigenDA for data availability, which should reduce scaling costs while maintaining high throughput.

RON Tokenomics: inflation drops from 20% to under 1%

The migration carries a significant restructuring of RON tokenomics. Annual inflation is expected to see a major drop from more than 20% to below 1%, a change Ronin described as “fundamentally bullish” for the token.

This drop is expected to occur simply because 90 million RON tokens that were earmarked for staking rewards will be redirected into the Ronin Treasury instead. Marketplace fees will also reduce by more than double, going from 1.25% to 0.5%.

Ronin is also replacing its staking model with what it calls a “Proof of Distribution” model. Rather than rewarding passive validators, the new system will allocate rewards based on actual contributions to the network, incentivizing developers and builders over token holders who only aim to lock funds on the network.

What this means for RON

RON is currently trading at around $0.11 with a market cap of roughly $89.5 million. The token has climbed about 30% over the past 30 days as investors continue to speculate price rises due to expected supply dynamic shifts post-migration.

Ronin intends to join a very short list of networks, including Celo, that have moved from independent chain status to Ethereum layer-2 architecture. The trend reflects a broader consolidation around Ethereum’s security model, even as competition from alternative layer-1 networks like Solana continues to intensify in the short-term.

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