1. SkyMavis’ much-anticipated $RON token went live last night at 8pm Manila time. The price on FTX’s perpetual futures jumped from $3.20 to $3.80 as the launch drew closer, bringing it directly in line with the USDC price on Ronin’s native Katana DEX. If you started farming $RON around three months ago when Katana first launched, you should be seeing paper returns of about 30% right now in USD terms. This may sound small when compared with AXS returns back in November, but that’s because the entire SkyMavis ecosystem (and nearly all cryptos) also dropped 60% in price since then. Honestly, this might be the one thing that’ll save my portfolio this quarter.
   

   

2. The launch of $RON has finally also answered the question of what the actual returns are for lending your tokens to the Katana DEX. The SLP/WETH pool is by the far the more lucrative one (we already knew this even without $RON) and it’s currently sitting at an APR of over 500%. This is because there’s only about $129M worth of SLP and WETH in that pool, whereas the AXS/WETH pool has over $440M in contributions. Consequently, the AXS/WETH pool is sitting at a much smaller 160% APR. If you didn’t quite get that: the bigger the pool is, the more people you are sharing the $RON rewards with. In this case, the SLP/WETH pool is only about 30% of the size of the AXS/WETH pool, so the $RON rewards are being split amongst fewer contributors.

3. So does that mean you should be contributing to the SLP/WETH pool? It really depends. Generally, I don’t think the average person should be investing in SLP, because it has a much lower up-side than AXS. That said, if you understand its limitations and want to accumulate more $RON rewards, then I guess the SLP/WETH pool is the fastest way to do it. Just be warned that you run the risk of “impermanent loss,” a concept that I don’t have time to explain today, but is worth learning about BEFORE you start lending your funds to the DEX.

4. Now that you finally have your $RON, what do you actually do with it? My personal strategy is to take 50% of all my $RON rewards, convert it into WETH, and then add all of it to the new RON/WETH pool in Katana. Why am I doing that? Because I believe that that’s going to be an extremely active side of the exchange, and since you can also earn from the trading fees, it’s yet another way to increase my RON holdings. The downside, of course, is that if RON goes up in value a lot faster than ETH does, this would not be the optimal strategy. I’d love to hear what everyone else’s personal strategy is for their RON!

   

5. Quick reminder before I close today’s newsletter: my #TRESE x #CRYPTOPOP NFT collab is auctioning off a 1/1 “Alexandra Trese” genesis piece and the auction closes at lunchtime today 28 January, Manila time. Please check it out and check out the other pieces in the series at https://opensea.io/collection/trese-cryptopop.

See you all next week, cryptofam! Have a great weekend.