RUNE is the asset that powers the THORChain ecosystem and provides the economic incentives necessary to secure the network.
RUNE is a low-cap asset that represents the protocol's native governance or utility token. This asset is exposed to the underlying risks of Thorswap (Thorchain), a protocol rated as Risky. RUNE is the asset that powers the THORChain ecosystem and provides the economic incentives necessary to secure the network. The asset has a fixed supply.
RUNE is moderately correlated to the overall market.
RUNE serves a vital economic role within the THORChain ecosystem as it provides the incentives required to secure the network and coordinate liquidity. There are four key roles including use as liquidity (as a settlement asset), security (as a sybil-resistant mechanism), governance, and incentives.
The total supply of RUNE is capped at 500M tokens. The distribution is as follows: 220.5M allocated to the protocol reserve for paying validators and liquidity providers (LPs), 65M to operational reserve, 60M to the community, 50M to the team and advisors, 30M to seed investors, 70M to private sales, and 20M for an initial DEX offering (IDO). THORChain issues 2M RUNE tokens per month as part of its staking rewards program. This emission will continue until the community reserve is fully depleted. Node operators and LPs also receive monthly distributions equal to the block rewards calculation. Two-thirds of block rewards go to node operators (validators) and the remaining one-third goes towards LP incentives.
RUNE has intrinsic value due to THORChain's unique security model where node operators must bond two times the value of non-RUNE assets in liquidity pools. Moreover, each liquidity pool on THORChain must use RUNE as the base pair or 50% of the pool's value. This means that $3 of RUNE must be locked for every $1 of non-RUNE value added to the network. As native assets are added to THORChain's pools, RUNE's baseline value will increase. On top of this baseline value, the market also adds a premium based on the potential future value of assets added to the network.