Power Rings are powerful golden bands which contain a vast amount of energy. Power Rings are natural bi-products of Chaos Emeralds, though they do not contain the limitless power the Chaos Emeralds do. Power Rings were artificially created by the brilliant Overlander scientist Nate Morgan as a clean alternative to fossil fuels to protect Mobius' environment. After his banishment from his home city when his original tests failed, the Mobian Sir Charles Hedgehog aided him in mass producing Power Rings to be used by the Kingdom of Acorn. Following this, the city of Mobotropolis entered a new Golden Age as the Power Rings had brought their kingdom out of the medival ages. Since then, Power Rings have been used not only as power supplies for technology, but also as a means to increase the power and capabilities of certain individuals such as Sonic the Hedgehog, Miles "Tails" Prower and Knuckles the Echidna.
Years before the Great War, Nate Morgan was the head of a team of underground scientists in the city of Megapolis which were studying to create a clean alternative for the fossil fuels that had been polluting the Overlander cities for years. One of the science team members, Julian Kintobor, sabotaged the calibrations of one of the early prototypes and encouraged the unsuspecting Nate to go ahead with the test. Due to Julian's tampering, the test resulted in a massive explosion, which would later cause Nate to be banished from Overlander territory forever.
While wandering in exile, Nate Morgan was located by the current monarch of the Kingdom of Acorn - Frederick Acorn. The king offered his hand of friendship and brought Nate back to the kingdom where he became very close with the royal family. Finally, using the energies within a Chaos Emerald, Nate was able to properly test and perfect the Power Ring and create it as a new energy source. Following this, the Kingdom of Acorn, which had remained as a pre-industrial state for centuries due to the Mobians wishing to preserve nature, rebuilt Mobotropolis as a post-industrial city booming with technology run on the energy of the Power Rings.
After a plot by Kodos and Ixis Naugus to have Nate banished from the kingdom, Nate imposed self-exile, feeling he had brought too much trouble to both the Overlanders and Mobians. Realizing the technology of the Power Rings could be used for evil if Kodos or Naugus got their hands on it, Nate brought the sole Ring Forge with him when he left. While wandering through the Great Forest, Nate stumbled upon a hollow stump and decided to bury the Ring Forge beneath a lake near the hollow stump he fell through. This was what produced the Power Rings used by Sonic and the Knothole Freedom Fighters in Knothole years later during their war against Dr. Ivo Robotnik.
During their war again the despot Dr. Ivo Robotnik, the Power Rings aided the Knothole Freedom Fighters by providing their main fighter Sonic to increase his speed and other capabilities. After finding himself in an alternate zone, Sonic discovered that by collecting fifty power rings and seven Chaos Emeralds he could achieve a super transformation of himself called Super Sonic. In this form, Sonic was virtually invulnerable and his powers were dramatically increased. In his Super Sonic form, Sonic managed to make short work of Universalamander.
When Sonic gathered his One Billionth Power Ring he was transported to a unique zone where he found himself face to face with the Ancient Walkers. The ancient gods felt that Sonic gathering one billion rings was a milestone worth rewarding. Thus, after putting Sonic through a series of tests, the Ancient Walkers empowered Sonic's One Billionth Power Ring with more energy than any other.
Since then, Power Rings have been used for numerous purposes. Dr. Ivo Robotnik gathered and used a large number of them to power his massive aerial weapon known as the Death Egg. The Freedom Fighters also used the immense magical powers of the power rings to stop the process of King Max's crystalization, though the Power Rings merely slowed down the process.