Ronin Network’s native token, RON, recorded 5x gains since the start of the year thanks to the network’s plans to shift to a delegated proof-of-stake (DPoS) consensus mechanism and expand its gaming portfolio beyond Axie Infinity.
The gaming-focused layer-2 Ethereum blockchain will change its current proof-of-authority to the DPoS consensus mechanism on April 12.
The previous mechanism had around six to nine participants securing and validating transactions on the network, which put the network at a centralization risk. It was the leading cause of the $650 million hack on the Ronin Network on March 29, 2022.
The new DPoS consensus mechanism allows RON stakers to earn from the network’s fees and vote on the set of validators operating the network.
Additionally, Sky Mavis, the team behind Axie Infinity and the Ronin Network, is also working on expanding the gaming portfolio of the network’s portfolio. On March 30, they announced that four new gaming studios are building on the Ronin Network, including Tribes Studio, Bali Games, Directive Games and Bowled.io.
The team also launched a developer portal to attract blockchain game designers to its platform. Sky Mavis aims to become the launchpad for Web3 games, competing with the likes of Immutable and Avalanche subnets.
The team announced the Ronin upgrade to a delegated proof-of-stake (DPoS) consensus algorithm on August 30, 2021. They rolled out the first testnet of the DPoS chain in January 2023.
RONs committed toward staking currently make up 30% of the token’s circulating supply. This is encouraging as the staked tokens are less likely to be sold.
Does RON have room for further upside?
RON price suffered significantly after the hack in March 2022, with its price declining around 90% from $2.10 to lows of $0.22 in a couple of weeks after the attack. Since then, RON has traded below $0.50 throughout the rest of 2022 before surging up almost a year after the incident.
The Ronin team deployed the DPoS consensus mechanism on the network’s testnet on Jan. 5, grabbing the market’s attention, which was evident in its price rise. The RON token also benefited from its listing on the MEXC exchange on Feb. 7.
RON also faces dilution risk due to an upcoming token unlock seeing 4.15% of its total supply going toward the Sky Mavis team and ecosystem funds on April 27.
Technically, buyers have the upper hand as the RON/USD pair broke above the resistance from the February 2023 peak at around $1.01. As the resistance flips to support, buyers will likely target the 2022 breakdown levels at around $2.10.
Additionally, a liquidity mining incentive by the Ronin team launched in January 2023 also pushed the prices of Axie Infinity tokens AXS and SLP. Liquidity providers who paired RON with AXS or SLP received between 12,000 and 25,000 RON, worth around $13,500 to $28,250 at last trading prices.
Related: Polygon, Immutable zkEVM to tackle ‘huge incumbents exploiting players’
The Axie Network also witnessed an uptick in usage in January after the launch of land gameplay and new earnings mechanics for players, according to DappRadar. However, the trading volumes have dipped slightly after the land gameplay hype subsided in February.
Per DappRadar data, Axie Infinity is currently the 11th-ranked blockchain game in terms of unique active users in a 30-day time period since March 11. Concerning the total value of NFTs and tokens in the game, Axie is still on top with a balance of $804.9 million.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.