Thread by @laowrey

My investment thesis and why RUNE⚡ ticks all my boxes for a high conviction bet.

1. Inspiring vision which addresses a need 👁️
2. Large TAM 💸
3. Great tokenomics 💰
4. History of execution 🏃
5. Strong community and adoption 👨‍👩‍👧‍👦

Time for a 🧵 - let's dive in

1/20

2/20 Inspiring vision – Just as a decentralised economy needs a decentralised stablecoin, it also needs a decentralised exchange. Most trading is done on centralised exchanges (Coinbase, Binance, Kraken) but they are custodial where you do not have full custody of those tokens

3/20 There is a risk you take when holding your tokens on CEXs or anything that is not self-custodial – see the tweet below from Kraken CEO in response to Canada’s regulators actions regarding the protests in Ottawa

https://twitter.com/jespow/status/1494462097161220104?s=20&t=CRmzILR_5r9MRY_W_J373A

4/20 Yes, there are plenty of DEXs but they all trade either tokens on a single chain or wrap the native tokens which requires you to trust another third party. See Vitalik tweet here on cross-chain risks and why the future is multi-chain.

5/20 “it’s always safer to hold Ethereum-native assets on Ethereum or Solana-native assets on Solana than it is to hold Ethereum-native assets on Solana or Solana-native assets on Ethereum”.

6/20 Thorchain is the only protocol (that I know of) that allows you to trade native BTC and other major protocols without having to wrap it and allows you to trade native BTC in a non-custodial way. On top of that you can earn yield on your native BTC!

7/20 TAM – There are two ways to think about the total addressable market

8/20 Firstly, trading volume - CEX and DEX trading volume was $1.1t in Jan this year according to The Block Crypto, Thorchain is currently only $370m which is 0.03% so the upside is huge theblockcrypto.com/data/decentral…

9/20 Secondly, the value of native assets locked on Thorchain (this is important to the tokenomics) - Thorchain is multi-chain and trades native assets, so its addressable market is the entire crypto market (currently $2t assuming it integrates all major chains).

10/20 Currently non-native assets that are in LPs are $80m which is 0.04%. Again, huge upside

11/20 Tokenomics – RUNE’s price is deterministic and should be 3X the value of all non-RUNE assets locked into Thorchain’s LPs + a speculative premium. 1X is the value of the native assets and 2X the amount of bonded RUNE required to secure and underwrite the network.

12/20 History of execution - The product actually works! Building multi-chain is very hard… not only is Thorchain dealing with one protocol, but they are also dealing with the nuances of dealing with many protocols – currently at 6 and counting (#Terra is coming next!!).

13/20 The team knew this and purposely limited the amount of assets that would enter its ecosystem (Chaosnet) via liquidity caps – these caps have been continually raised as the protocol was battle tested

14/20 Yes there were a series of hacks that occurred in 2021, but it’s the reason why protections were put in place and no user actually lost money. The team continued to build and secure the network

15/20 Strong community and adoption - The #Thorchads community is awesome. Despite the hack, there continues to be patience and positivity from the community. Everyone knows that this vision is too important to get right, so rather the short term pain for the long term gain

16/20 There is a great synergy in the #LUNAtics and #Thorchads community - both groups believe in a similar vision

17/20 There are a number of interfaces that are adopting Thorchain as the backend so users may not even know they are using Thorchain e.g. @THORSwap, @xdefi_wallet, @ShapeShift_io, @RangoExchange, @BrokkrFinance etc.

18/20 Risks - This play is much higher risk than my other bets so need to consider the risks. Most people may not care about counter-party and custodial risk. This is a leverage bet on the crypto market, if market does enter a bear market price will likely follow

19/20 - Please let me know if I have missed anything, got something wrong or feel free to add anything else!

20/20 Whilst I speculate on several different tokens, I only have a handful of high conviction bets that I can hodl for the long term – RUNE, LUNA, BTC and ETH. If you like what you read, please like, comment or re-tweet and follow me. $RUNE #Thorchain #RUNE