The Ronin DEX
Key Features:
- Swap: Katana allows anyone to easily swap between the various ERC 20 assets found on Ronin
- Pool: Users can provide liquidity to the DEX and earn swap fees
- Farm: Users can stake their Liquidity Pool tokens to earn RON
If you would like to get involved in the Sky Mavis ecosystem but aren’t interested in playing Axie Infinity then Katana is one of the options available to do so. Katana is the decentralised exchange (DEX) built on top of Sky Mavis’s Ronin chain, and allows its users to swap tokens (eg SLP for ETH), provide liquidity and farm the RON token all whilst staying within the Ronin ecosystem.
If you’re new to how a DEX works then you might want to check out this video/post, but to give you a very brief overview:
To be able to allow users better prices when swapping tokens, anyone can provide liquidity – this means that you provide the same value of two tokens. Using the supported pairs below you could provide an equal value of AXS & ETH, for example, let say the current value of ETH is 3,000 USD and the value of AXS is 100 USD and you would like to provide 1 ETH into the AXS-ETH pool, you’ll also need to provide 30 AXS as the pair.
Pairs that are currently supported:
- AXS/ETH
- SLP/ETH
- ETH/USDC
- RON/ETH (to be launched in the future)
Once you become a liquidity provider you generate LP (Liquidity Provider) tokens which represent the share of the pool you own.
The advantage of locking up your tokens and providing liquidity is that you will earn trading fees from trades that happen in the pool, proportionate to your pool share.
The other advantage, and possibly the main reason to provide liquidity is that you can then stake your LP tokens and farm Sky Mavis’s newest token Ron.
Please see the following video from Sky Mavis support that walks you through the process:
As you can see, the possibility of adding to your crypto portfolio can be done with minimal work when it comes to providing liquidity and farming tokens. This is similar to the fiat system of having a savings account where you would usually only be receiving a (very) small amount of interest on the funds you have in the bank.
Before you provide liquidity to any DEX you need to be aware that you are not always guaranteed to be profitable when providing, there is a phenomenon called Impermanent/Divergence Loss. This article explains how that happens.
You can access Katana here (always check the link to avoid scams) https://katana.roninchain.com/
Please note that you will need a Ronin wallet and at least one of the supported tokens to be able to use Katana.
