Ronin has announced significant changes to its economic model as it prepares to upgrade to an Ethereum Layer2 by the end of March. The network will eliminate passive staking rewards and the original validator model, transitioning to a Proof of Distribution mechanism. This new system will allocate five million RON tokens annually to incentivize metrics like total value locked (TVL), gas consumption, user retention, and trading volumes of NFTs and ERC20 tokens. Additionally, approximately 90 million RON tokens previously used for passive staking will be redirected to the treasury. Treasury revenues will also be bolstered by adjustments in Ronin Marketplace fees, sequencer profits, and SkyMavis-related distribution proceeds. Governance will shift from a validator-based model to a RON token-weighted voting system, allowing token holders to influence decisions on buybacks, allocations, and reward adjustments.