KATANA DEX: BULLISH AXIE INFINITY NEWS
"Ronin DEX" has finally arrived!
On November 4, 2021, Jihoz has made a shocking announcement on discord with regards to the Ronin Dex. It all started with his post in the Axie Discord server’s general channel. It was a gif wherein Ron Weasley makes an introduction. This led to a massive hype by those online at the moment. One could clearly feel the tension at that moment since the day we have all been waiting for has arrived. Everyone knew at that moment, Ronin Dex is coming.
An hour later, KATANA, Ronin’s decentralized exchange was finally unveiled.
In a substack post, the developers have introduced the DEx. Katana is a decentralized exchange(DEx) wherein assets in the Ronin Wallet can easily be swapped with other assets such as AXS, SLP, USDC and WETH. This process is comparable with swapping of assets in Binance but without the need for KYC or “Know-Your-Customer”.
Players can now safely swap assets without the risk of getting scammed since the swapping process is a trustless experience achieved through the use of smart contracts.
Benefits of Katana Dex
Now you know that Katana Dex can be used for swapping with other assets, but what else can it give you? Are there other benefits that it will bring to Axie Infinity? Do you feel confused about what Katana Dex?
Worry not, we have a summary of its uses and benefits:
- Katana Dex enables trustless swaps between SLP, AXS, WETH and USDC - Trustless means that there is no middleman required for the swapping of assets. Before, a middleman was required to ensure the protection of the buyer and seller. Now, we get to use “smart contracts” in a blockchain which makes the process entire fast, safe and decentralized.
- Liquidity Pools generate passive income - Before the Dex was implemented, scholars and investors could only HODL or stock up SLP. Now they could also use that SLP to add liquidity to the Ronin ecosystem. By adding assets in a liquidity pool, the providers earn from the transaction fees generated by the Katana Dex as well as $RON rewards. Aside from all of that, this also means that SLP has another utility other than breeding. This should increase the value of SLP.
- Reduction of circulated SLP and AXS - Less assets circulated means the game's economy is going to be healthier long-term. When supply of an asset decreases while demand remains the same or increases, the result is an inevitable increase of the value of said asset. SLP which is currently still in a downtrend is now more likely to stabilize in value than ever before.
- Ronin will be the new home/launchpad for more projects - When there is less volatility to the Ronin Ecosystem, new investors and developers will be more attracted to it. This means that new projects could be added aside from those made by Sky Mavis. Furthermore, Ronin has high liquidity, fast transactions and cheap transaction fees which makes it even more attractive to both developers and investors. All of this should snowball and make the entire ecosystem grow exponentially.
RON?
Aside from seamless swapping of assets, liquidity pools have also been introduced.
Liquidity Pool is a “pool” of paired tokens that is necessary to facilitate trading in a decentralized exchange. This liquidity for the DEX is used during swapping of assets. Providing liquidity will give rewards to the liquidity provider in the form of transaction fees. According to the substack article, RON will also be rewarded to liquidity providers by adding LP tokens to the “farm”.
But what is RON?
RON is the ecosystem token for the Ronin Chain. Its primary purpose is to be used as transaction fees in Axie Infinity. It is also stated that in the future, RON fees will replace the free transactions. For now, it is not possible to purchase RON. So if you want to earn RON, be sure to add liquidity to the pool.
Though it is quite risky to provide liquidity due to the impermanent losses.
In short, impermanent losses occur once the price of pooled tokens start to fluctuate. The more volatile they are, the more pooled tokens are lost in the process so do your own research first! Here's an article that goes more in depth on the topic of impermanent losses.
Also, be warned, it is not possible to purchase RON so be sure not to get scammed!
KATANA USER INTERFACE
SWAP
Swap is a means to convert from one asset to another. To do this, one has to connect a Ronin Wallet first. Select the asset you wish to "swap" to the desired asset. Only SLP, AXS, WETH and USDC are available for now.
The confirmation of "swap" shows the fees that will be deducted from the swap. The fees will be deducted from the original asset you own. Compared to ETH gas fees which range around 50-100$, swapping in Katana is super cheap.
POOL
Pool or Liquidity Pool is where one can ad liquidity into the Ronin Ecosystem. One must add a pair of asset (SLP, AXS, WETH, USDC) of equal fiat value to add into the pool. Adding liquidity will generate passive income based on what one has added to the pool. It will also give a "LP Tokens" for the added liquidity.
The available Liquidity Pool pair for now are AXS-WETH, SLP-WETH, and USDC-WETH. Liquidity pool using AXS, SLP and WETH are more riskier than pool requiring USDC. This is because former assets are more volatile when compared to a stable coin such as USDC. However, using USDC-WETH cannot be used for farming "RON" tokens
FARM
a.) Staked LP Token; b.) RON rewards
Farming is the only way to earn "RON" or "WRON" tokens. This token is the ecosystem token for Ronin. It is not available in the market for now. "LP Tokens" are required to be staked into the farm in order to earn "WRON" or wrapped RON.
AXS and SLP Pump
Katana has brought life to the stagnant economic situation of Axie Infinity. When it went online, players have started buying SLP in bulk in Binance. Some players decided to swap the SLP to WETH to purchase Axies. Others purchased SLP for trading to make profits during the FOMO. While others decided to purchase SLP to add liquidity to Katana. This has led to a massive spike in value of SLP up to 80% in the following hours. Though a correction in value or a pull-back in fiat value was seen the following hours. All players now hope that SLP will now stabilize its value rather than go further in a downtrend.
But the pump did not stop with SLP. AXS has also made a decent rally when Katana went live. This may not be surprising to veteran players since economic announcements have always created a pump in AXS value. It has a reached a value up to $163.99 in just a few hours after the announcement before making a correction the following hours.
Alongside the glorious rally of SLP and AXS, Katana has also brought a massive delay in transactions. Since a lot of players used the Ronin Chain simultaneously, over an hour or more delay was noticed by the entire community. Even the marketplace of Axies went to a massive lag though this did not deter players from purchasing Axies in bulk. This means that the floor price of Axies could soon go up.
ZYORI: MASSIVE SLP MINTING & BULLISH ON $RON
On the same day that Katana Dex was launched, a lot of SLP was "minted" or claimed.
In fact, it was the single largest amount of SLP minted in any given day since Axie was first released. Needless to say, this was a point of concern for many players and investors as they thought all of this new SLP will flood the market. Thankfully, Andrew chimed in at just the right time to clear up the confusion and help us regain confidence.
His explanation might mean that this is not such a big deal after all.
Yes, a lot of new SLP was created but we can safely assume that most of it was added into a liquidity pool. Sure, there are some people that decided to sell their SLP when it peaked at 0.13$ but the general sentiment is that most of this newly minted SLP went into liquidity pools where it generates an income.
Andrew has also tweeted about his position in the liquidity pool. Though he is a team member himself, it seems that no one really knows the true value of RON just yet. Could this be a sign for some bullishness of RON? Who knows. But we sure as hell will add some liquidity to farm RON.
Katana DEX is another big step towards Axie Infinity mass adoption.
Though it has created a massive short term waves for the ecosystem’s economy, it has a long lasting, positive effect on its growth. The massive inflow of assets to the Ronin Ecosystem is a big indicator of its future growth and potential. It is also a step towards decentralization. This means that the community will benefit more from the game and its economy. We can all see that the future of Axie Infinity is getting brighter by the day.
Axie ecosystem is set to explode in following years as it further develops and as more liquidity pours into the DEX. Once the entire infrastructure is coded out, and other NFT games start entering the Axieverse to claim the benefits Ronin brings to projects building on top of it, SKY IS THE LIMIT!
That about wraps it up!
Hope this article was informative, and hope you'll join us in our next Axie Infinity News Report.
Thanks for this! I just started providing liquidity in the SLP/WETH pool. Let's see how much I get!
Thrilled to be able to help. Best of luck on your LP-ing journey because it can be a bumpy ride at times due to IL.
Thank you!
I just wonder if and to what extent they'll speculate on the price.
Good buying opportunity?
No?
I'm still trying to wrap my head around it!
The speculation will be crazy.
Think it will pump like mad but the question is, at what price will it stabilize?
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Thanks a lot man😍