Ronin has outlined its first community governance proposal, asking RON token holders to vote on whether treasury assets should be used to provide additional liquidity on Katana, the network’s decentralized exchange.
Called RGP-1, the proposal sets the initial step as to how some of the treasury’s funds could support Ronin’s token economy as well as generating income for the ecosystem.
The plan would deploy approximately $185,000, equivalent to 17% of the treasury’s estimated $1.1 million value. Around $92,000 of existing WETH (22 WETH) and USDC tokens (39,500 USDC) would be paired with an equal value of RON across Katana’s RON/WETH and RON/USDC pools.
Liquidity pools hold assets that users can trade against. Providers deposit two tokens and receive pool tokens representing their share of the reserves. On Katana V2, trading fees accrue within the pool, and providers receive their share of these fees on a pro rata basis to their holdings compared to the overall value of the liquidity pool.
More importantly, in terms of the ecosystem, adding reserves means larger trades have less impact on price.
Ronin estimates the positions could generate $14,100 in additional trading fees over 12 months, based on recent volumes. Its modeled range runs from $6,100 to $16,000. The treasury would retain ownership of the liquidity positions.
However, providing liquidity also creates exposure to impermanent loss. As relative token prices move, trading changes the mix of assets held by the pool, hence the resulting position can be worth less than simply holding the original tokens. Fee income can compensate for this difference, but the outcome depends on trading activity and price movements. Earning fees alone does not establish profitability.
Ronin’s own six-month historical backtest illustrates the risk. The positions would have earned $6,200 in fees against $8,000 of impermanent loss, generating a loss of $1,800. Quarterly reports would track performance.
The governance framework gives each RON held one vote, with a 66% supermajority required for approval. More generally, proposals must also pass through community discussion and an ecosystem team review before reaching a ballot, giving holders influence within a process that retains institutional oversight. Because voting power follows token ownership, larger holders have greater influence over outcomes. Ronin says its screening process and supermajority requirement are intended to limit the risk of governance capture.
There’s no date for the vote yet, but the ballot will last for seven days. Approval requires a quorum of 20 million RON, including abstentions. If it passes, the treasury must execute the deposits within 14 days of the vote closing.
Assuming the proposal is passed and is successful in its goals, the plan is other game projects on Ronin will be able to submit similar proposals, using their own token reserves matched with treasury RON. Ronin is also considering expanding the liquidity available for AXS and SLP tokens.
Read the full proposal here.
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