A look at Axie Infinity’s ailing sidechain – Is there some good news?
Since the Ronin Bridge was re-opened in June 2022, its TVL has climbed by over 30%. However, the persistent decline in its network activity raises concern.
- Ronin’s TVL has climbed by 66% this year.
- User count during the same period has, however, dwindled.
Ronin [RON], the Ethereum sidechain created to power the play-to-earn game Axie Infinity [AXS], has experienced significant growth in the past few months, particularly in terms of its total value locked (TVL).
Quick update on Ronin Network ($ron).
Been very satisfied with the progress that $ron has made over the past few months. Here is why. A thread…
🧵(1/12) pic.twitter.com/h5WgIWwAq0
— SpaceG.ron (@magicians1029) July 15, 2023
Read Axie Infinity’s [AXS] Price Prediction 2023-24
According to a Twitter user, despite not focusing on DeFi, the Ronin network has maintained a strong TVL of around $80 million for the past two months. This TVL surpasses several popular Layer 1 (L1) networks, such as Aptos [APT], Near [NEAR], Algorand [ALGO], Tezos [XTZ], and Stacks [STX], despite the latter having higher market capitalizations than Ronin.
To put this into perspective, even though $ron does not focus on DeFi at all, it still has a much higher TVL than most of your favorite L1s such as $apt, $near, $algo, $xtz, $stx etc who all have a much higher market cap than $Ron 🤔
🧵(9/12) pic.twitter.com/YpFbA5RXnb
— SpaceG.ron (@magicians1029) July 15, 2023
For additional context, data from DefiLlama revealed significant growth in the sidechain’s TVL since the year began. As of 1 January, Ronin’s TVL was $44.86 million. At $74.66 million at press time, it has since grown by 66%.
Although TVL has been on an uptrend year-to-date, it was noteworthy that it has fallen by 78% since the Ronin Bridge hack on 23 March 2022. Since it reopened on 28 June of the same year, TVL has rallied by 35%.
TVL might be up, but other metrics hint at an ailing chain
While Ronin’s TVL might have increased in the past few months, an on-chain assessment of the sidechain’s network activity revealed a steep fall in network activity during the same period.
Data from Nansen revealed a significant drop in the count of daily active addresses on Ronin since 23 March. After peaking at 186,403 active addresses that day, the daily active user count has since plummeted by 92%.
Further, there has been a decrease in the number of transactions processed on Ronin since the year began. Axie Infinity relies on Ronin to facilitate all transactions and store its digital assets, such as Axies, Land, SLP, AXS, and Wrapped ETH (WETH). During its peak in November 2021, Ronin handled an impressive 560% of the total number of transactions on Ethereum.
Realistic or not, here’s AXS’s market cap in BTC’s terms
However, as the game’s popularity has diminished from its peak, the number of transactions has decreased considerably, currently averaging less than 100,000 transactions per day in 2023.
With a persistent decline in interest in the play-to-earn game, the number of new Axies minted daily has plunged to new lows, while new holders are practically nonexistent.
