1.
Day 12/30 of @THORChain threads
Subject : Why $rune acts a leveraged long index token with no liquidation risks.
Today : $rune, the asset
Day 12/30 of @THORChain threads
Subject : Why $rune acts a leveraged long index token with no liquidation risks.
Today : $rune, the asset
2.
I will give a random @ThorGuards from my vault among everyone who retweets the first part of the thread.
I will give a random @ThorGuards from my vault among everyone who retweets the first part of the thread.
3.
Overview of $rune
✅ Acts like an index fund
✅ Capture more value than any other crypto asset
✅ Has more utility, TAM and potential than any other crypto asset
Overview of $rune
✅ Acts like an index fund
✅ Capture more value than any other crypto asset
✅ Has more utility, TAM and potential than any other crypto asset
4.
Let's start with 3x TVL
Adding any asset to a liquidity pool exposes you to at least two assets. In @THORChain's case it's always $rune. This is mandatory because of the security design : everything is always collateralized and has no externalities like oracles.
Let's start with 3x TVL
Adding any asset to a liquidity pool exposes you to at least two assets. In @THORChain's case it's always $rune. This is mandatory because of the security design : everything is always collateralized and has no externalities like oracles.
5.
That creates a situation where @THORChain itself is capital inefficient but everything built on top of it has unbelievable value capture and capital efficiency.
That creates a situation where @THORChain itself is capital inefficient but everything built on top of it has unbelievable value capture and capital efficiency.
6.
I have a full thread on my investment thesis, why why $luna and $rune value capture are unparalleled.
Here's $rune main value capture mechanism :
For every $1 of non rune TVL in liquidity pools, there's $3 of $rune to collateralize it.
I have a full thread on my investment thesis, why why $luna and $rune value capture are unparalleled.
Here's $rune main value capture mechanism :
For every $1 of non rune TVL in liquidity pools, there's $3 of $rune to collateralize it.
https://twitter.com/THORmaximalist/status/1503438975561875467?s=20&t=N2VB3ESY7FtS-IL8BtTP2g
7.
Every feature built on top of it requires users to pool more $rune or to buy it and burn it.
- Synths, IBC and bridgeable assets that are always redeemable for a L1 token.
- Borrowing and lending
- Minting a collateralized + algorithmic stablecoin
Every feature built on top of it requires users to pool more $rune or to buy it and burn it.
- Synths, IBC and bridgeable assets that are always redeemable for a L1 token.
- Borrowing and lending
- Minting a collateralized + algorithmic stablecoin
8.
Every time any asset is deposited in a liquidity pool, 50% is automatically sold to buy $rune.
For each $, the minimum value of $rune goes up by $1.50.
Every time any asset is deposited in a liquidity pool, 50% is automatically sold to buy $rune.
For each $, the minimum value of $rune goes up by $1.50.
9.
$rune acts like an index fund based on pool weight :
Everytime assets like $btc, $eth and $luna move in price, the pools get rebalanced.
The percentage represented by the minimum deterministic pricing is 100% correlated with non $rune asset prices.
$rune acts like an index fund based on pool weight :
Everytime assets like $btc, $eth and $luna move in price, the pools get rebalanced.
The percentage represented by the minimum deterministic pricing is 100% correlated with non $rune asset prices.
10.
It has multiple levers to capture more value :
Swaps LPs: Higher TVL = Higher $rune price
The $rune market cap has a minimum pricing is deterministic. More exogenous TVL = higher $rune price.
$10B in non $rune TVL = $15B in $rune market cap
It has multiple levers to capture more value :
Swaps LPs: Higher TVL = Higher $rune price
The $rune market cap has a minimum pricing is deterministic. More exogenous TVL = higher $rune price.
$10B in non $rune TVL = $15B in $rune market cap
11.
Synths : They allow you to deposit single sided in the pools and redeem a token, an alternative to custodial wrapped assets. They are a fully decentralized, composable wrapped asset like $wbtc. It's multichain & you can always redeem it for the real L1 asset at any time.
Synths : They allow you to deposit single sided in the pools and redeem a token, an alternative to custodial wrapped assets. They are a fully decentralized, composable wrapped asset like $wbtc. It's multichain & you can always redeem it for the real L1 asset at any time.
12.
Synth space is limited to a percentage of the pool. Everytime space becomes available, synths are minted very quickly.
Track record shows low redemptions rate on wrapped assets. How many $wbtc $usdt or $usdc gets redeemed ? Almost none.
This is permanent value capture.
Synth space is limited to a percentage of the pool. Everytime space becomes available, synths are minted very quickly.
Track record shows low redemptions rate on wrapped assets. How many $wbtc $usdt or $usdc gets redeemed ? Almost none.
This is permanent value capture.
13.
Borrowing and lending will create massive value capture.
You will be able to have 0% interest, yield bearing self repaying loans with no liquidation by giving your liquidity pool position as collateral.
Borrowing and lending will create massive value capture.
You will be able to have 0% interest, yield bearing self repaying loans with no liquidation by giving your liquidity pool position as collateral.
14.
Thor.USD will have a $rune mint and burn mechanism, similar to $luna. This ensure the value captured by the network collateralized the stables. This has been a massive value capture mechanism for $luna.
Thor.USD will have a $rune mint and burn mechanism, similar to $luna. This ensure the value captured by the network collateralized the stables. This has been a massive value capture mechanism for $luna.
15.
Now the question is : Why sell your crypto assets when you can be long without a margin call ? Why wouldn't you exit a position that way when you need liquidity ?
Each time someone mints a Thor.USD using LP collateral, $rune market cap goes up 1.5x.
Now the question is : Why sell your crypto assets when you can be long without a margin call ? Why wouldn't you exit a position that way when you need liquidity ?
Each time someone mints a Thor.USD using LP collateral, $rune market cap goes up 1.5x.
16.
There's $400+B sitting in exchanges, $100B borrowed on DEFI and CEFI crypto platforms, $20B+ in DEXes earning yield.
A lot of that capital will move to @THORChain.
There's $400+B sitting in exchanges, $100B borrowed on DEFI and CEFI crypto platforms, $20B+ in DEXes earning yield.
A lot of that capital will move to @THORChain.
17.
Here's some quick maths :
$10B in non $rune assets in pools means $30B in minimum deterministic value.
With a 3.5x speculative premium, the lowest it has ever been it would mean $280 $rune price.
Here's some quick maths :
$10B in non $rune assets in pools means $30B in minimum deterministic value.
With a 3.5x speculative premium, the lowest it has ever been it would mean $280 $rune price.
18.
As more protocol, services and product get built on top of Thorchain more value will be accrued in the pools.
$rune has the potential to become the alpha asset in crypto.
As more protocol, services and product get built on top of Thorchain more value will be accrued in the pools.
$rune has the potential to become the alpha asset in crypto.
19.
The complexity of recruiting millionaires sysadmins to onboard enough collateral in nodes creates a very big MOAT.
The only way to fork @THORChain is through a friendly fork with the support of the DEVs. Nobody has done it yet.
The complexity of recruiting millionaires sysadmins to onboard enough collateral in nodes creates a very big MOAT.
The only way to fork @THORChain is through a friendly fork with the support of the DEVs. Nobody has done it yet.
20.
$rune is used for :
- Liquidity pair in @THORChain pools
- Collateral that secures the network
- Collateral for synthetic assets
Coming :
- Yield bearing collateral for self repaying loans
- Mint & Burn, collateralized Thor.USD
$rune is used for :
- Liquidity pair in @THORChain pools
- Collateral that secures the network
- Collateral for synthetic assets
Coming :
- Yield bearing collateral for self repaying loans
- Mint & Burn, collateralized Thor.USD
21.
I wrote this today in advance of my schedule because I feel there are probably many people hesitating to LP $luna and $ust on @THORChain.
Here is the info on the mechanism behind the liquidity pools :
I wrote this today in advance of my schedule because I feel there are probably many people hesitating to LP $luna and $ust on @THORChain.
Here is the info on the mechanism behind the liquidity pools :
https://twitter.com/THORmaximalist/status/1506151968816906243?s=20&t=Nyq7L4OfN5VTPH3TEtiw9Q
22.
For more threads about @Thorchain and $rune, click here : linktr.ee/thormaximalist
If you are a $rune whale (100k+ $rune) would like to bond to a node while keeping custody, send me in PM.
If you like my content, please delegate to my 0 fees $luna node :)
For more threads about @Thorchain and $rune, click here : linktr.ee/thormaximalist
If you are a $rune whale (100k+ $rune) would like to bond to a node while keeping custody, send me in PM.
If you like my content, please delegate to my 0 fees $luna node :)
23.
TDRL : $rune's deterministic pricing is based on the value of the other assets in liquidity pools. Weighted on pools dept. When the price of assets move, $rune moves along with it, acting like an index fund of crypto.
It has more upside because of utility & value capture.
TDRL : $rune's deterministic pricing is based on the value of the other assets in liquidity pools. Weighted on pools dept. When the price of assets move, $rune moves along with it, acting like an index fund of crypto.
It has more upside because of utility & value capture.
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