1./ $RUNE is a value-capture masterpiece, but why?
@THORChain enables cross-chain, decentralized, permissionless swaps. And because of how it's designed $RUNE will always have value.
Vague? I understand, a small thread 🧵👇
2./ To enable the cross-chain swaps, @THORChain made liquidity pools with native assets.
What are native assets?
$ETH for @ethereum
$AVAX for @avalancheavax
$ATOM for @cosmos
$BNB for @BinanceChain
And a few more...
3./ In every liquidity pool the second asset next to the native one is $RUNE.
So if I deposit $100 of $BTC I have to pair it with $100 of $RUNE. I could also only deposit the $100 of $BTC, but it will be converted to $50 $BTC and $50 $RUNE behind the scenes
4./ What does this mean?
For every dollar non $RUNE liquidity deposited in @THORChain, one dollar of $RUNE will be deposited as well.
The more liquidity enters the protocol, the more buy pressure for $RUNE
5./ But that's not all.
For every dollar deposited in liquidity pools, nodes must bond one dollar in $RUNE as well. This is done to keep everything secure. We could have an in-depth look at this later.
6./ So, for every dollar of non $RUNE liquidity deposited into @THORChain, three dollars of $RUNE need to be locked.
This creates massive buy pressure once more liquidity enters.
7./ Since @THORChain is the only protocol in existence that does not make use of bridged assets or anything like that to perform cross-chain swaps, it's in a unique place to attract users.
8./ Next to that, it's the only place where you can earn yield on your native $BTC while it remains completely under your control.
9./ Also, with #THORFI around the corner many new possibilities are coming which will very likely make the volume on @THORChain grow further.
10./ With more volume, there will also be more fees to be distributed over liquidity providers which will give them an incentive to add more liquidity or for new liquidity providers to join.
11./ And more liquidity means... More buy pressure for $RUNE.
I hope I have been able to explain why $RUNE is a value-capture masterpiece.
If you have any questions, drop them below. Thanks for reading!
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