Rune, the Liquidity of THORChain
Introducing the RUNE Token and Distribution
The THORChain protocol represents a monumental leap forward in the advancement of blockchain technology. For the first time ever, digital assets can be traded seamlessly, trustlessly, and securely across different blockchains with superior performance and always-on liquidity. To support this ambitious goal, the THORChain community presents the Rune token and distribution.
In Norse mythology, runes are symbols of some of the most powerful forces in the cosmos. These ancient letters called “runes” allow one to access, interact with, and influence the world-shaping forces they symbolize. Mythological gods, such as Odin, would seek out runes for their power to understand and shape our reality. In a sense, runes are key to access the world.
The RUNE token, therefore, is essential to the entire THORChain ecosystem. From rewarding users for providing liquidity to securing the network through bonded stakes, RUNE serves a cryptoeconomic function in providing incentives and deterrents for the protocol. Here are some uses for RUNE:
- Validators are required to stake RUNE to be part of the Validator Sets. Once staked the RUNE are bonded for a period of time to prevent nothing-at-stake attacks.
- All network transaction fees (gas) are paid in RUNE. Fees may be transaction fees, trading fees, bridge fees and liquidity fees, imposed by the different elements of the ecosystem.
- Liquidity is always backed by RUNE in the Continuous Liquidity Pools. Therefore, RUNE functions as ecosystem settlement currency.
- The Flash Network requires RUNE as liquidity to join Liquidity Hubs and fees are paid in RUNE.
- Block rewards for Layer 1 Validator Nodes (Nornes) and Layer 2 Liquidity Nodes (Mjölnir) are paid in RUNE.
Although the RUNE token will be on the first TokenChain on THORChain, THORChain allows other TokenChains to be created, which is necessary to trade different assets at the protocol-level. When a new TokenChain is created, RUNE is required to kick-start the initial transaction as well as providing initial liquidity for the new asset. This latter part is critical to the ecosystem, as this initial liquidity approximates a ratio of locked RUNE assets to newly minted tokens and consequently anchors the initial price.
The RUNE Distribution
The RUNE distribution and sale serves three primary purposes:
- Funding protocol research and development,
- Providing liquidity to the protocol for usability, and
- Distributing a large amount of the Rune to a large number of participants fairly.
This liquidity point is critical to the overall success of the protocol. Since THORChain is designed to allow the trading of any blockchain-based digital asset, the distribution can also run parallel RUNE distributions across other chains to generate liquidity and incentivize traders and validators to participate in the network.
There will be ten tranches of the token distribution at launch. The first tranche is Genesis, and the subsequent nine tranches represents the nine worlds in Norse cosmology. From Helheim to Midgard (of mortals), the entire distribution culminates in the release of the V1.0, aptly named Asgard — the home of the gods. Moreover, each tranche also represents a minor version release of the Blockchain, signifying the completion of various development milestones.
THORChain’s novel distribution has the following characteristics:
- Accessible. Any person can contribute to each tranche. Funds and large investors can contribute, but must pass KYC for large transactions.
- Immediate Liquidity. Token are released immediately to contributors.
- Fair. The incremental ether price of the RUNEs matches the time-value of Ether whilst liquidity is locked.
- Transparent. All circulating tokens will be emitted only from the smart contracts.
- Continuous. The distribution will last until all RUNEs are circulating.
- Capped. The distribution is capped at the prices in the smart contracts.
- Progressive. Each time the development team release a development milestone, the next Tranche is made available.
The specifics are:
- 10 tranches with 10 distribution contracts and 10 development milestones.
- Cap: Each tranche will be capped at 50m RUNE. The first Tranche is 4000 Ether.
- Each subsequent Tranche will be unveiled when the previous is filled, and is dependent on market conditions.
- Anyone can contribute at any time (excluding citizens and residents from USA and China).
- Withdrawals are processed by calling a specific function on the sale contract, which distribute RUNEs as well as any THORChain collectibles if won.
All tokens are released from smart contracts once the tranches are filled or the development team deliver the stated milestones. RUNE will be supported on ASGARDEX, the THORChain protocol’s first exchange interface, as the base settlement currency.
During the distribution, THORChain will release a voting page for the first coins and tokens to be listed on ASGARDEX. The community vote for tokens by using Rune.
Once the Ethereum Bifröst has been built and the protocol is deemed to be sufficiently secure, which is expected to be released in the 3rd milestone, Rune will be available to be traded on ASGARDEX.
What happens to unsold tokens prior to V1.0?
There will never be unsold tokens; the only tokens available for distribution will come from the smart contracts and the tokens will remain locked in the distribution contracts until sold. The distribution can happen in parallel to a fully functioning blockchain, and it is assumed that ASGARDEX will be live and trading whilst the distribution is on-going.
How do I withdraw RUNE?
Instructions on how to withdraw are available here, performed by simply calling a smart contract function from a wallet that sent in Ether.
How are RUNEs issued?
The full supply of Rune was minted at the start, and immediately placed in smart contracts to be distributed. When sending in Ether, the smart contracts allocate Rune proportionally to the amount of Ether.
How are RUNEs burned?
When the Ethereum Bifröst is built to THORChain, users will be able to send across Rune to THORChain. This will immediately burn Rune from Ethereum by calling a function on the token contract.
Join the Distribution
For more information or to participate in the distribution, head on over to https://thorchain.org/token.
Be sure to check out our official community channels for updates: