Everything you need to know about the $RUNE Token

TLDR

- Token utility & value accrual mechanism
- Token distribution, unlocks & supply schedule
- Investors and funding
- RUJI Merger, RUNEPool, token burn
- Roadmap (App Layer, Smart Contracts, IBC)
- Solana & Base integration
- And lot's of graphics and charts

What is THORChain?

THORChain (TC) is a decentralized cross-chain liquidity protocol designed to facilitate native asset swaps between different blockchains like:

- Bitcoin, Ethereum, BNB Chain, Cosmos Hub and others.

It's also a sovereign L1 chain built on the Cosmos SDK.

What makes THORChain so special?

a) Token swaps on TC happen without the need for wrapping tokens or centralized intermediaries.

b) Users can swap native BTC for native ETH or vice versa, without interacting with any centralized parties such as CEXs or bridges.

c) Fully self-custodial!

THORChain's History

- 2018: Initial Ideation & Conceptualization
- 2019: Project Funding (Seed, Private, IDO)
- 2020: Development & Testnet
- April 2021: Mainnet Launch
- 2022: ThorFi & THORName
- 2023: Integration of more chains (AVAX, BCH)

Token Overview

- Max supply: 500M
- Circulating supply: 335B
- Market Cap: $1.36B
- FDV: $1.67M
- Token Price: $4.05 / ATH $20.9
- Rank: #60

$RUNE Token Utility

1) Security: RUNE can be staked to secure the network & all assets on it

2) Governance: Partizipation in on-chain governance

3) Liquidity: Each asset on TC is paired with RUNE

4) Incentives: Tx & swap fees + block rewards go to LPs & node operators

RUNE Value

The protocol uses incentives to ensure that $3 of RUNE is locked for every $1 of non-RUNE assets on the network.

a) Liquidity Pools: $1 of RUNE for every $1 of non-RUNE asset

b) Node Bond: $2 of RUNE for every $1 of non-RUNE assets in the liquidity pools

On top of the baseline value ($120M), the market adds a premium or multiple based on the potential future value of assets on the network.

This baseline multiple has been 3-5x on average.

This 3:1 ratio of locked RUNE to other assets on the network makes the demand for locked RUNE responsive to the price movement of the crypto assets it secures.

The more non-RUNE assets (BTC, ETH, ATOM) are on Thorchain, the more RUNE has to be locked, maintaining the 3:1 ratio.

RUNE Supply

- Max supply (hard cap, minted at genesis): 500M

- Current total supply = Max supply - burnt RUNE = 414M

- Circulating supply = Current total supply - Reserve = 335M

*Reserve: pays block rewards to LPs & node operators over time

RUNE Burn

There're 3 way to burn RUNE:

1) RUNE Killswitch: 13.9M burnt after July 2023

2) ADR12 Burn: 60M burnt in March 2024

3) Lending Burn: 12.3M Rune burnt via lending (Lending has been sunset, hence no more tokens will be burnt via lending)

Total Burn: 86.2M RUNE

RUNE Token Distribution

- Seed investors: 6%
- Pre-Sale investors: 7%
- Initial DEX Offering (IDO): 2%
- Team & Advisors: 10%
- Reserves / Initial network bootstrapping: 25%
- Service Nodes: 50% (used to pay block rewards to LPs and stakers)

Token Unlocks

All token vesting has been completed. The final unlock to VCs and team occurred on Dec. 19th 2021.

The only tokens that are not in circulation yet, are 78M RUNE held by the Reserve. These funds are used to pay block rewards to LPs and stakers over 10 years.

RUNE Rich List

Here's a list of the Top 12 holders of $RUNE:

- Bond Module = all staked/bonded RUNE
- Reserve Module = RUNE put aside for block rewards for LPs and nodes
- Pool Module = RUNE deposited in LPs (RUNE/BTC, RUNE/ETH etc.)

RUNE Current Distribution

From Jan 1st 2023 until today RUNE distribution has changed the following way:

>= 100 Rune: +4.4K wallets (+30%)
>= 1k Rune: +1.26k wallets (+24%)
>= 10k Rune: +220 wallets (+18%)
>= 100K Rune: +37 wallets (+22%)

Healthy growth of holders across the board!

Investors and Funding

Composable Foundation which oversees the development of Picasso has completed two funding rounds to date:

Seed Round:
- Money Raised: $600K
- Tokens sold: 30M
- Price per token: $0.02

Private Round:
- Money Raised: $1.4M
- Tokens sold: 70M
- Price per token: $0.02

Public Sale (IDO):
- Money Raised: $320K
- Tokens sold: 10M
- Price per token: $0.032

Total money raised: $2.3M

RUNE Value Accrual

A 0.15% (15 BPS) swap fee is taken on every swap on TC and distributed to node operators and liquidity providers.

The average weekly swap volume in 2024 is somewhere around $1B.

The more trading volume there is on THORChain, the more revenue accrues to the protocol.

Swap Fees aka Protocol Revenue

This chart below showcases the weekly protocol revenue of TC. In trading-rich weeks, THORChain accrues around $1M in protocol revenue per week.

In this chart we can clearly see an uptick in revenue after the swap fee was raised from 5 to 15 BPS on August 24th.

In the last week of August 2024 TC hit a crucial sustainability milestone!

For the first time ever, swap fees were greater than block rewards.

This metric is key, as swap fees are real protocol revenue and should eventually fully eclipse and replace block rewards.

Affiliates

Any crypto wallet or exchange can integrate with THORChain to provide cross-chain swap services to their users.

Of the $770M volume in the last week of August, $253M volume came in via affiliates.

Affiliates Earnings

Affiliates earn a portion of the fees (10-70 BPS) from the txs facilitated through their integration.

This is a simple but genius mechanism for aligning incentives between TC and it's partners.

Cumulatively, affiliates have earned $14.5M in fees on TC.

Swap Volume by Affiliate (in 2024)

- TrustWallet: $2B (32.6%)
- ThorSwap: $1.93B (31.3%)
- ShapeShift: $917M (14.9%)
- Ashardex: $534M (8.7%)
- THORWallet: $467M (7.6%)

Affiliates account for approximately 15% ($6.1B) of the total swap volume in 2024 ($40.9B).

Saver Depth

As of Sept. 1, 2024, $69M of liquidity was deposited into Saver Pools.

- 618 BTC => $36M (52%)
- 5,35K ETH => $13M (19%)
- Stables => $7.35M (10%)
- Others (BCH, AVAX, DOGE, BNB) => $12.65M (19%)

Saver Pool Cumulative Yield = $3.91M (2.8% APR)

Total Value Pooled

Total value locked in THORChain liquidity pools.

57M RUNE (17% of circulating supply)

Total Value Bonded

Total value bonded by nodes to secure the THORChain network.

104M RUNE (31% of circulating supply)

Total Value Locked (TVL)

TVL is the sum of pooled and bonded assets on THORChain.

57M + 104M = 161M RUNE locked (48% of circulating supply) => $625M TVL

RUNEPool

RUNEPool is a feature that allows RUNE holders to contribute to the protocol's liquidity by depositing RUNE into a pool that distributes across multiple protocol owner liquidity- enabled pools, offering diversified yield opportunities to users with reduced impermanent loss risk vs. single-pool liquidity positions.

In just one month after the RUNEPool launch (July 31, 2024), 4M RUNE has been deposited.

Depositors have to lock up their RUNE for 30day, in order to earn yield on their pooled tokens.

RUNEPool currently holds around 1.2% of circulating RUNE, adding a third feature to TC for earning yield by locking up tokens.

As displayed in the chart below, locked RUNE (bonded + pooled + RUNEPool) are steadily increasing, while RUNE in wallets is slowly trending down.

User Activity

Despite the prolonged bear market, weekly active users are on the rise since Q4 2022 and have found a stable equilibrium around 9000 since Q2 2024.

Some more Network stats

- Total swap volume: $72.4B
- Total TC swaps: 20M
- Total swappers: 526K
- Total Protocol Revenue: $183M
- Average slippage: 0.007%

Future Plans / Roadmap

- Launching an App Layer on top of TC
- Kujira migration to THORChain's app layer
- RUJI Merge (RUNE + KUJI)
- CosmWasm integration (smart contracts)
- Enabling IBC
- Solana & Base integration
- OKX wallet integration
- Vultisig integration

RUJI Merger

RUJI = RUNE + KUJI

The $RUJI token will become the main token of the THORChain app layer and will earn 50% of the total fees generated by protocols participating in the merge.

Projects that will merge into RUJI are:

a) Kujira
b) Fuzion
c) Wink
d) Unstake.fi
e) Levana

The $RUNE token is not involved in this merge and will not change in any way.

In fact, RUNE stands to benefit greatly as 50% of the fees generated by RUJI dApps will go to Thorchain nodes and LPs to pay for the chain's security.

For more details about the RUJI Merger, check out this thread: RUJI Merger

CEX and DEX listings

1) Rune is listed and can be traded on most CEXs like Binance, Bybit, Gati-io, KuCoin, Kraken and many others.

2) Or natively on THORChain via THORSwap or other trading interfaces.

To sum it up: The Good

a) All vesting has been completed - no more token unlocks
b) Battle-tested protocol that has been around for years
c) Burn mechanism causing deflationary pressure
d) Protocol Revenue via swap fees
e) Exciting roadmap: App Layer, IBC integration, CosmWasm smart contracts
f) Integration of Solana and Base
g) Very engaged & passionate community

The Bad

h) Protocol is not super intuitive to use and interact with
i) Relative encapsulated ecosystem (this is about to change though)
j) RUNE staking is pretty intricate for retail users

Conclusion

THORChain is an innovative cross-chain DeFi protocol supporting native token swaps across different ecosystems in a fully self-custodial manner.

The upcoming App Layer on top of TC will further extend the protocol's DeFi capabilities, introduce smart contracts and interoperability with other chains.

$RUNE Tokenomics are sound, generating real revenue for the protocol with no more token unlocks on the horizon.

If the team keeps executing on its roadmap, THORChain has all the fundamentals in place to emerge as one of the leading DEXs in crypto, fully decentralized and self-sustaining, becoming the DeFi Hub for native cross-chain swaps.

Thanks for reading folks, we hope you've found this article helpful.

Disclaimer

This article is intended to educate readers about certain topics and should not be considered financial advice in any way.