Ronin Migrates to Ethereum Layer 2, Introduces New Proof-of-Distribution Model

Ronin has officially completed its migration to Ethereum, marking one of the biggest upgrades in the network’s history. Its blockchain was originally created as a separate Ethereum sidechain for Axie Infinity, now a Layer 2 solution as part of the Ethereum ecosystem.

The move is actually a “homecoming” from Ronin to Ethereum and was announced directly from the Ronin team. The project says the migration enables Ronin to retain its gaming-centric infrastructure and leverage Ethereum’s security, scalability, and expanding Layer 2 infrastructure.

The network will remain the same as before for users, but with improved security assurances and faster transactions based on Ethereum technology, said Ronin.

Ronin Integrates With OP Stack Ecosystem

Additionally, the migration also puts it within the OP Stack ecosystem. The network announced its partnerships with multiple infrastructure providers, such as Optimism, Conduit, Boundless, and EigenDA.

Instead of the old model in which the chain was responsible for most of Ethereum’s security and transaction processing, it is now part of the operational engine, said Ronin. The team added that further enhancements will supplement ZK fraud proofs via Boundless Kailua, help increase finality speeds and general capital efficiency.

It illustrates how gaming chains are increasingly integrating Ethereum L2, while preserving their own ecosystems, apps, and experiences.

Massive Reduction in RON Inflation

The migration will focus on the tokenomics of Ronin’s updated model, which is one of the most crucial elements. The network discovered that prior estimates have been made for RON emissions, which were around 45 million RON per year. Since the migration was done, emissions have been lowered to 5 million RON per year.

The change is 9x lower than the emissions and the lowest inflation rate in the history of Ronin. The reduced supply growth is expected to make the RON token’s long-term value proposition stronger and could lead to a more sustainable ecosystem, says Ronin.

The network will be replacing passive staking rewards with a new “Proof of Distribution” incentive structure. A game-based system, where rewards are likely to be focused on builders and projects in direct support of the ecosystem’s growth.

Developers who generate value by engaging in the game, application, and ecosystem will see larger allocations in the reward pool, said Ronin. Switching was a merit-based process with the aim of incentivizing network growth, the team said.

Treasury Revenue Streams Receive Major Upgrade

There are also some new revenue streams for the Ronin Treasury due to the migration. The team claims the treasury has millions of digital assets in RON, but previous models failed to demonstrate a correlation between activities in the ecosystem and treasury growth.

With the latest design, now the treasury will receive the remaining 90 million RON, previously designated for staking rewards. The platform will additionally take in gas fee revenue after expenses and blob fees from its net sequencers.

In addition, the network raised the Ronin Marketplace treasury fees from 0.5% to 1.25%, a 2.5x increase in the amount of the marketplace-related revenue generation.

The changes would be expected to make the ecosystem more sustainable in the long term, and to increase the compounding of the value that ecosystems deliver to the treasury and to the users of that value.

Ronin Continues Expanding Web3 Gaming Ecosystem

Ronin is still one of the most popular blockchain gaming ecosystems in the crypto market. The network began by being the home for Axie Infinity but has since seen games like Pixels, Wild Forest, Craft World, Cambria and Fableborne gain popularity as well.

Ronin pointed out that the entertainment market around the globe has become an annual industry of over $200 billion today. Even though the blockchain gaming space has amassed about $4.2 billion in revenue from Axie Infinity over the years, the project sees this adoption standing in its infancy.

Ronin’s target is still the same: to take millions of gamers onchain via more seamless onboarding, reduced transaction fees, and gaming-focused infrastructure, the team said.