The $6 RUNE moon soon vibes are returning.

I've noticed a fair bit lately on X (Twitter) that the sentiment around RUNE seems to be improving. The token has popped up lately, with a gain of almost 50% over the last week. Granted, there is still a long way to go till ATH, but it is interesting to take a look at what is behind this jump, and see if it is the start of a new trend, or a temporary blip that will fade back out.

One of my biggest regrets in crypto is that I sold out of RUNE. Was in the project very early, and built a position. However, fell in to the trap of looking for the next shiny object to play with, and then had to sell out of most of my assets to fiat. Regardless, there is still a soft spot for the project, and I am currently looking for a way to get back in to it.

Source: Coingecko

Why is RUNE doing well lately?

I think the current run can be put down to two new developments. One is the recent implementation of "streaming swaps". The other is the very soon to be launched addition of a lending protocol.

Lets take a closer look at each of these.

Streaming Swaps:

In a nutshell, streaming swaps break up a larger swap through the liquidity pools on Thorchain into a series of smaller swaps over a set time period. One of the big downsides for Thorchain has been that swaps of any decent size have been expensive. Thorchain's pools use a "slippage" based fee, so small trades are quite cheap, but as the trade size increases, so does the fee. For these trades, using a CEX has been a much cheaper option, and this has limited Thorchain's volumes. Streaming swaps fixes this.

A big swap can be programed to occur over a time period, so it gets broken down into a series of much smaller swaps, happening each block (roughly every 6 seconds). This means that arbitragers can rebalance the pool, and the trade can go through over time with minimal slippage. This article by Nine Realms explains the process and benefits very well.

The impact should be beneficial for the Thorchain platform. To quote from the above linked article:

Presently, fees have surpassed block rewards, a testament to THORChain’s recent surge in activity. Streaming swaps might lead to an initial drop in protocol revenue due to liquidity fees being tied to slip. However, it’s anticipated that revenue will bounce back with greater volume in the long run. The introduction of streaming swaps is a strategic move to attract a larger demographic of users who typically trade over $100k. Securing this segment of the market is crucial for THORChain to become the leading swap route, surpassing CEX in terms of speed (a single on-chain tx), KYC procedures (none), and now, price execution.

Native swaps, between layer 1's, with fee's as good or better than CEX's, along with no KYC requirements definitely sound bullish for RUNE, and the successful launch of this innovations could go a long way to explain the recent price action for RUNE (along with the related token THOR). Thor has benefited even more in the last week, with it jumping over 300% in the week. The Thorswap platform (a front end and access point for Thorchain)

Thorswap has experiences a significant jump in trading volumes since streaming swaps went live. Over 100% increase in the last week.

Source: DefiLlama

The positive momentum has flowed through to an increase in the TVL on Thorchain, with a 25% increase over the last week according to DeFiLlama.

So, it is clear that the launch of streaming swaps has marked a turnaround in fortunes for the Thorchain protocol and eco-system. Now let's look at what the next driver may be...

Lending.

The impending launch of Lending on Thorchain is another game changing feature being roled out. As with everything Thorchain do, they are doing it differently than what is currently out in the marketplace. @gungunkrishu wrote a post not long ago on this topic and it is definitely worth a read.

The mechanism used looks complex behind the scenes, and the Thorchain docs give an overview of how it all works. I think those two linked articles will explain how Lending will work better than I can, so I'll just give you a TLDR...

• Loans will have 0% interest.
• Loans will have no risk of liquidation.
• Loans will have no expiration.

Will be interesting to see it work in practice. I look forward to @khaleelkazi being all over this one as it sounds perfect for him. Deposit BTC, borrow USD (equivalents) when needed, rinse and repeat. Permanently long BTC and short USD.

---

It is great to see the positive vibes returning to Thorchain. I've started to see the Rune Ranger on Twitter bring back his $6 $RUNE moon soon tweets, and plenty of other bullish vibes.

Cheering for RUNE, and looking for a way to get back in to it.

Thanks for reading,

JK.

Posted Using LeoFinance Alpha