What is RUNE?
RUNE is the native coin of THORChain. Within the network, it acts as a base pair for users to swap RUNE for any other supported asset. It has a supply of 500 million and four main use cases: settlement, security, governance and incentives.
RUNE as a settlement asset
RUNE is the settlement asset for all liquidity pools, facilitating swaps between two pools. A 1:1 ratio of RUNE:ASSET is required for each pool. For example, a pool with $100,000 in BTC will need to hold $100,000 worth of RUNE.
RUNE for security
To ensure security, node operators have to bond twice as many RUNE as the amount they added to a pool. The RUNE bonds are held as collateral to ensure that the node operators behave in the best interest of the network.
RUNE for governance
RUNE token holders can choose which asset or chain they want to give priority to. They do so by voting with their liquidity. For instance, a pool that has the most RUNE committed will enjoy higher priority.
RUNE for incentives
Block rewards and swap fees are paid to liquidity providers and node operators in RUNE on a set emission schedule. RUNE can also be used to pay for gas fees.
The smallest denomination of RUNE, called a Tor, is eight decimal points. RUNE aims to move towards a predictable deterministic value. By design, RUNE’s market cap should be minimally three times the total value of non-RUNE assets in the ecosystem’s liquidity pools.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please do your own research before investing in any cryptocurrency.
