Cover Image for Thorchain

Thorchain

Swap native ETH for BTC without intermediary. The RUNE token ties together a blockchain, liquidity providers and node operators to enable a decentralized Cross-Chain Liquidity Network.

Categories:

Layer1

Updated:

2023-04-03

Tags:

Cross-Chain

Ticker:

RUNE

Token Strength.

Token Utility:

$RUNE
Fee mechanisms for swaps: RUNE is used to pay for fees associated with swaps on Thorchain, incentivizing liquidity providers and validators.
PoS-Token: As a PoS token, RUNE holders can participate in network governance and earn rewards for staking their tokens.
Deposit and bonding token: RUNE is used as a deposit and bonding token for liquidity providers who earn rewards for providing liquidity to Thorchain's AMM pools. LPs can also participate in governance by bonding their RUNE.

Demand Driver:

Swap Fees: 
Traders will need to buy and hold RUNE to pay for swap fees on the Thorchain protocol.

Liquidity Providers: LPs need to pair their token liquidity with RUNE at a 1:1 ratio, creating demand for RUNE.

Node Operators: Node operators must bond RUNE based on 2x the total LP pool amount, leading to increased demand for RUNE.

Total Value Locked (TVL): The above factors result in a 3x RUNE demand per $TVL on the Thorchain protocol, making it attractive for investors to hold RUNE.

Value Creation:

Provide the infrastructure for completely decentralised cross chain swaps of crypto assets. Wallet to wallet without leaving your custody.

Value Capture:

Value accrual to token:
RUNE token accrues value through its use as a native asset for cross-chain swaps, providing liquidity to other networks, and as a settlement currency.

Value accrual to protocol:
Thorchain protocol captures value through a treasury that is funded by a portion of the swap fees. This treasury is used to fund development, incentivize liquidity providers and node operators, and buy back RUNE tokens. The more swaps and liquidity provision, the more value is captured for the protocol's treasury.

Business Model:

The business model for Thorchain protocol:

Revenue comes from: 
Transaction fees paid by users for swapping cryptocurrencies, a portion of which is distributed to LP and Node operators as rewards.

Revenue is denominated in: 
RUNE token.

Revenue goes to: 
LP and Node operators as rewards for providing liquidity and securing the network, with a percentage allocated to the Community Pool for network upgrades and development.

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Protocol Analysis.

Problems & Solutions
Problem:
Crypto traders face increased costs and security risks when relying on intermediaries to swap their native ETH for BTC.

Solution:
Thorchain's Cross-Chain Liquidity Network eliminates intermediaries and enables secure and direct swaps between native ETH and BTC. The RUNE token unites liquidity providers and node operators to ensure reliability and cost-effectiveness for crypto traders.
Predecessors
Ren Protocol: Enables decentralized cross-chain liquidity for various assets, including Bitcoin, Ethereum, and Zcash, using RenVM.

Kyber Network: A decentralized exchange protocol that facilitates the swapping of various cryptocurrencies without the need for intermediaries.

Investment Take

... coming soon

Tokenomics Timeline.

  1. 2018-11-13

    Initial supply of 1bn RUNE minted

    Pre mint

  2. 2019-10-01

    Burned 50% of tokens

    Unused reserve is burned amounting to 50% or 500m of all tokens.

  3. 2021-06-23

    Mainnet Launch

    Rune goes live on Mainnet.

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Ecosystem Users.

Resources.

Author.

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