Thread by @SlawTeh

1/ Thorchain raised its cap on it’s Multi-Chain Chaosnet (MCCN) LPs from 750k to 1.5M RUNE. Within several hours, the LPs quickly hit the new cap.

2/ Here’s a before / after breakdown of the impact:



nonRUNE TVL: $112M, 128
deterministic value: $336M, 384
in-network RUNE: 32.1M, 33.0

market price: $16.70, 18.70
baseline: $10.47, 11.64
speculation: $6.23, 7.06
spec %: 37, 38

3/ Thornchain increased the LP cap by a trivial number of RUNE - 750k. The nonRUNE TVL increase by 14% almost immediately, and the baseline price (which is determined by the nonRUNE TVL) jumped 11%.

4/ With one trivial increase, the core value of RUNE jumped 11%. In mere hours.

Are you getting this?

Remember, Thorchain is not providing community rewards to these LPs. The current level of income is strictly from swap fees, averaging roughly 12% on the BTC, ETH and BNB LPs.

5/ BTC, ETH and BNB are the three largest LPs with $14M, 10 and 5, respectively. These are three tokens each with their own chains. What to move some BTC to put in the latest YFI yield farm? Now much easier. Want to ape into a BSC shitcoin? Now much easier.

6/ The cross-chain use case is obvious. Now it’s implemented. It creates demand to deposit into LPs.

That demand soars once the LPs receive block rewards. A planned lending product will pay interest to the LPs. Other ThorFi products will boost LP economics further.

7/ If token inflation and embedded leverage are stripped from LP yields, the Thorchain LPs will likely have the highest economic yield of any LPs available throughout crypto.

All liquidity are belong to Thorchain.

8/ Each bump in MCCN RUNE cap has material impact on its core value. The last one: +11%

Are you getting this?

When now can measure what happens when the caps are increased. And course, we want to know: will the next bump happen?

9/ There are several bugs addressed in the next update to MCCN, so the path to the upgrade will likely involve deploying new code to the testnet, then to MCCN. Observe for 24-36 hours to make sure it’s stable, then bump.

10/ Cap bumps may occur once a week for now. Any acceleration of the pace is certainly a good sign.

How big will the next bump be? Until Thorchain spins up block rewards and is closer to adding its borrow product, I believe the bumps will be on the small side.

11/ The LP yields need to be attractive after all.

Once the economic enhancements come on line and network stability is proven, then the cap increases will happen in much larger chunks. And soon enough, no cap! But until then, keep the drum beats going.

#RAISETHECAPS