utility-first value.
It was designed to be most used in its own network.
Utility creates value. Value creates an ecosystem.
(ᚱ) RUNE Powers & Secures the Network.
It Has 5 Distinct
Liquidity: As a settlement asset.
It Avoids Diluting Pair Liquidity
(ᚱ) RUNE is the base currency and is required to be provided along side every asset in pools.
Without a native settlement currency, each asset would need to be pooled with every other asset, which would eventually result in hundreds of new pools to be created for just one new asset, diluting liquidity.
If THORChain supported 1,000 chains, it would only need 1,000 pools. A competitor would need a whopping 499,500 pools… try to make those deep and useful.
Illiquid pools are the enemy (ᚱ) RUNE fights.
Liquidity: As a settlement asset.
It Inherits Value of Pooled Assets
Since (ᚱ) RUNE is bonded to assets in its pools, then as the value of those assets increase, then the (ᚱ) RUNE value will also increase.
This means the system can become "aware" of the value of the assets it is trying to secure.
Once it is aware of the value of the assets it is securing, it can use incentives to ensure security of those assets.(ᚱ) RUNE is worth 3X the value pooled of assets like BTC, ETH or BNB in its network.
Security: As a sybil-resistant mechanism.
It’s Used by Nodes as Bond
Sybil-resistance refers to the ability to prevent someone masquarading as many identities in order to overcome a network.
THORChain could be called a Proof of Bond network. In THORChain the nodes commit a (ᚱ) RUNE bond i.e. minimum of 1,000,000 (ᚱ) RUNE in order to be churned into the network.
If the node attempts to steal assets, then their bond is deducted to the amount of the assets they stole (1.5X), and the pools are made whole. Additionally, nodes have to perform a lot of mandatory services, else their (ᚱ) RUNE bond is deducted.
Security: As an asset to underwrite.
It’s Used to Secure Assets
The Incentive Pendulum ensures that nodes are incentivised to continually buy and bond enough (ᚱ) RUNE each time to maximise their gains - which is a maximum when there is 67% of RUNE bonded and 33% pooled in pools. If the pools are holding $1M in capital, then the value of RUNE in the aggregrate bond is $2M. Thus all assets can be underwritten.
The bond is extremely liquid - any (ᚱ) RUNE holder can immediately enter or exit their position since (ᚱ) RUNE is the settlement asset in all pools. Thus, when a node churns in, the cost basis of their bond is known to them and not an arbitrary "paper" figure. This means a node bonding $1M in RUNE will never contemplate making a decision to steal <$1M in capital from the network, else they will lose overall.
Governance: To signal asset & chain priority.
It Signals Listing and Delisting
While THORChain strives to be governance-minimal, there are some parts of the protocol that use committed capital to signal priority. This is the case for the asset listing process, where every three days a new asset can be listed as a pool. In a queue of standby assets, the one with the deepest commitment of RUNE is the one that is listed first.
Additionally, if a connected chain is no longer economically valuable, then all Liquidity Providers in that chain can leave. If a pool is empty, it will be delisted, and this will cause the network to immediately sever ties with that chain in a process called a "ragnarok".
Incentives: Fees, Subsidise Gas & Emissions
It Incentivizes The Network
(ᚱ) RUNE is the native currency of THORChain and is consumed as transaction fees on the network. All swaps are charged both a fixed network fee, as well as a dynamic slip-based fee. This prevents various attack paths such as denial-of-service attacks, as well as sandwich attacks on a pool.
The network continually consumes gas as it makes transactions. Nodes are free to use at-will the base assets BNB.BNB, ETH.ETH, BTC.BTC, etc in order to pay for gas. These assets are used directly from the vaults. THORChain then observes outgoing transactions, reports on the gas used, and then pays back the Liquidity Providers in those pools to the value of twice the amount of gas used, in (ᚱ) RUNE.
After fees are charged and gas is subsidised, THORChain computes the block reward, divides it based on the Incentive Pendulum algorithm, and then pays out to Bonders and Liquidity Providers.
This drives Nodes to bond the optimal amount, and pays Liquidity Providers for their contribution of liquidity.
Amplifier: To Elevate Assets.
It Amplifies the Pooled Assets
The price of assets is decided by the exchange which is most liquid. It’s also the reason why THORChain will set its own price, as it (ᚱ) RUNE will be most liquid within its own network.
(ᚱ) RUNE will pull in liquidity from every corner of the cryptosphere, creating incredibly deep pools. Eventually these pools will become so liquid they’ll start to affect the price of the paired asset in the same way as BTC and ETH currently do.
This phenomenon will first be observed on pooled assets which are very illiquid outside of THORChain. Larger market cap assets will follow once the liquidity pools become deeper.
500M Supply For You
Once the network has fully emitted its supply, over 50% of RUNE will have been emitted to participants like you.
But sir, are the payments a fixed amount?
The amount emitted by the THORCHain protocol is fixed to a schedule based on the block reward calculation. Typically the payment is 67% to Nodes and 33% to Liquidity Providers, but that split can change depending on the way the Incentive Pendulum is swinging.
BET ON TVL
If 80%+ of RUNE gets locked into THORChain pools, by economic design, RUNE's market cap will be minimum 3X
the value of all non-RUNE assets locked into THORChain.
Some call it deterministic RUNE.
But sir, can deterministic RUNE be calculated?
(3 * Non-RUNE TVL) / RUNE Circulating Supply
| Exchange | Pair | Price | Spread | +2% Depth | -2% Depth | 24h Volume |
|---|---|---|---|---|---|---|
| Uniswap (v3) | ETH/0X3155BA85D... | $7.9 | 0.60% | $73,090 | $72,870 | $128,474 |
| Sushiswap | 0XC02AAA39B223F... | $8.01 | 0.60% | $53,201 | $53,041 | $285,203 |
| Uniswap (v2) | 0XC02AAA39B223F... | $8.03 | 0.60% | $36,230 | $36,121 | $117,124 |
| Bancor Network | BNT/RUNE | $8.14 | 0.60% | $5,740 | $6,581 | $10,449 |
| Sushiswap | 0X6B3595068778D... | $7.96 | 0.71% | $73 | $73 | $76 |
| Sushiswap | 0X3155BA85D5F96... | $7.74 | 0.60% | $4,066 | $4,054 | $3,467 |
| Sushiswap | 0XA1FAA113CBE53... | $7.79 | 0.63% | $292 | $291 | $0 |
| Sushiswap | 0XC011A73EE8576... | $8.03 | 0.88% | $29 | $29 | $0 |
| Sushiswap | 0XDAC17F958D2EE... | $11.02 | 2.50% | $4 | $4 | $0 |
| Data from CoinGecko | Show more | Last updated a few seconds ago | ||||
But sir, is THORChain Protocol an Exchange?
The interfaces which connect to the THORChain protocol are technically the exchanges. This includes BEPswap, ASGARDEX, community-written apps, interfaces or even bots i.e Mjölnir Telegram bot.
THORChain is a permissionless liquidity network, meaning that anyone can tap into it and provide swapping or pooling services (and even earn fees from it). A network of 99+ distributed, public and anonymous nodes power the whole.
But sir, why not just HODL my (ᚱ) RUNE?
The more (ᚱ) RUNE is locked into THORChain (80%+), the more its deterministic value becomes accurate. (ᚱ) RUNE also becomes more stable, transparent and manipulation resistant.
