RUNE (Thorchain) - Boring but Important

I bought quite a lot of RUNE (@ $0.40) in the finest tradition of 'copy people on LEO who know their shit', and I've been getting quite excited recently watching its price go up to > $5.

Now, having finally found the time to research it, you know what: I've concluded that for all the hype it's probably not a moonshot coin, but rather it really is just a very solid coin for securing a reasonable yield for minimal risk from the value of your other crypto assets.

In other words, Rune is boring but important!

It's currently floating at around $5 - which i think is a reasonable price for it, and I also think it's a reasonable 'hold' coin, given the pretty unique offerings it will bring to the DEFI landscape, but despite the hype I can't see it going to the moon, rather just steadily increasing in value.

Screenshot 20210225 at 20.35.14.png

Ironically, despite the 'fun' presentation and meaning absolutely no disrespect to the coin or the protocol, I just think this is going to be a no-frills, no nonsense platform which will be a secure place to pool some of my BTC, some of my ETH and so on - secure in the knowledge that the token I'm pooling with is kind of hedged with all other tokens, so this should keep slippage and impermanent loss to a minimum, at least in the larger pools.

As I understand it Rune/ Thorchain have the following features which make this likely (there is a lot of thought behind all of this!):

Rune will be the sole base pair coin on Thorchain Mainnet

Every pool will have RUNE in it - which means RUNE will capture the value of all the assets pooled with it.

This also means there will be fewer pools and it should be easier to achieve deep liquidity.

But there won't be any of the fun-pools like you get on Pancake, and I read in the Docs that the returns are going to be quite low for DEFI projects - from 3-10% depending on the pool. Although this I understand could vary. It might be higher to incentivise pooling for example....

Pooling of native assts and cross chain swaps

None of this wBTC or (even worse) bTBC or renBTC nonsense - You'll be able to pool actual BTC, or actual ETH or LEO (I assume) or whatever, and you'll be able to swap straight from BTC to ETH, and do this from any major wallet (or so some bloke from the Rune Telegram chat told me).

THIS is what I think is going to attract people to add liquidity to the pools, this a place where people can store their native assets, NOT the wrapped versions.

The Test net is already live BTW:

Screenshot 20210225 at 20.41.00.png

Deterministic Rune - The value of Rune will be 3 times the TVL

Because of the way node operators are incentivised to lock up twice as much Rune as is pooled (they get higher rewards that way) the value of Rune should always be 3 times that of the Total Value of other Assets locked - thus you can work out the value of a coin by dividing that figure by the total circulating supply.

Screenshot 20210225 at 20.36.28.png

If we assume a circulating supply of 250M Rune (which isn't that far off) then we'd need $750 M of assets captured in the chain in order to reach a Rune price of $10.

That doesn't seem to infeasible to me - that would be 1.5% of the DEFI market ATW.

USDr - the Rune stable coin could be a winner

There is going to be a Rune stable coin (USDr) - linked (somehow) to other stable coins.

And I'm just thinking - buy Rune, pool 50-50 with the stable coin - I could see a lot of people going for this, sucking more Rune into the network.

It's an alternative to ETH and BSc

THIS I think is important - as I understand it, Thorchain Main will have lower fees than ETH, and it will be actually genuinely decentralised, unlike BSc, AND native assets - people are gonna love it, right?

Lower fees than ETH

I may have misunderstood this but my interpretation of this section of the Docs was that fees will be partially paid by node operators, who will then be compensated with Rune - all behind the scenes.

Decentralisation and anonymity

Unlike Binance Smart Chain, Rune just feels ore like a pure blockchain project - the operators are anonymous, the nodes are what are played to.

Security

Node operators are incentivised to bond 2 times the value of pooled assets, there should eventually be almost 100 nodes and the system can handle up to a third malicious actors. Sounds pretty secure to me.

Screenshot 20210225 at 20.37.12.png

The minimum bond you need to run a node is $1 Million dollars worth of Rune.

Final thoughts - Rune: Boring but Important,

I'm glad I'm in on Rune, but don't believe the hype - 'all' it means is you've got a relatively secure place to get a relatively average yield of yer main crypto assets, I think.

Or maybe that is exciting?!?

You can pool Rune now on BEPSWAP

You can find out more about RUNE on the Thorchain website.

28 Comments