The Bull Case for RUNE
RUNE has real value to the THORChain network. Its value is deterministic. Unlike many tokens in the cryptocurrency world, RUNE plays an integral part in the security and operation of the protocol. Tokens like YFI, UNI, and many others, have no intrinsic value outside the promise of 'governance' (being able to vote on changes to a protocol).
RUNE is the base asset pair for all pools, so a 1:1 ratio of RUNE:ASSET is required for staking. A pool with $100,000 in BTC will require $100,000 worth of RUNE. In addition, in order to provide network security, THORChain requires twice as many RUNE to be bonded by network operators as there is RUNE staked. This 2:1 bond:stake ratio, combined with the 1:1 pool stake ratio, means that the amount of RUNE needed in the network is three times the amount of the non-RUNE assets locked. If $1,000,000 worth of tokens are staked in THORChain, the market cap of RUNE will be at least $3,000,000. And like any token, stock, or asset in the world of finance, speculation around future value encourages additional upward price pressure. The 3:1 ratio is just the minimum value of RUNE.
There is currently around $1,000,000,000 worth of Bitcoin wrapped as wBTC on Ethereum, and that number is quickly growing. Why? Because with the rise of DeFi, token holders do not want their assets to sit idly by in cold storage when they could be staking, farming, or providing liquidity in order to generate yield on their assets. Native Bitcoin doesn't have any DeFi applications, so holders are flocking to Ethereum in order to allow their assets to be productive. But many, many Bitcoin holders are old school, and are adverse to the idea of wrapping their tokens on another chain or interacting with Ethereum at all. There is $200 Billion worth of BTC doing nothing. With THORChain, Bitcoin holders can stake their native BTC. This has not been possible before THORChain, and represents billions of dollars of TVL that can enter the network. The same is true for assets on any other chain -- which also represent many more billions of potential TVL, and this is why THORChain represents a breakthrough in decentralized exchanges.
THORChain is not just a smart contract
Over a hundred thousand lines of code.
Forking and rehosting the network is not easily feasible. There are dozens of anonymous node operators that work together to create the secure decentralized network.
Incentives
THORChain "ruthlessly" incentivizes liquidity providers. It would be a massive challenge to design a system that can provide higher returns than THORChain.
Yield farms provide triple digits returns by minting worthless tokens out of thin air, and returning them to LPs, THORChain provides large returns through slip-based fees and system rewards.
An analysis of the THORChain Incentive Pendulum and Staking Economics
