Question 1

What is RUNE?

Accepted Answer

RUNE is THORChain's native utility asset and the settlement asset for the network's exchange and liquidity system. It is used for liquidity-pool pairing, node economic security, on-chain governance signaling, and distributing network fees to participants; therefore, RUNE is more than a tradable token.

Question 2

How does RUNE function in liquidity pools?

Accepted Answer

Every THORChain liquidity pool uses RUNE as its common settlement asset: the external asset in a pool is paired 1:1 by value with RUNE. For example, when a pool contains BTC worth $100,000, it correspondingly holds RUNE worth approximately $100,000. This allows different external assets to form swap routes through RUNE without establishing a separate direct trading pool for every asset pair. When the price of an external asset in a pool changes, arbitrage adjusts the quantities of the two assets in the pool so they continue to tend toward equal value; therefore, the quantity of RUNE in a pool changes with the value of the assets in that pool.

Question 3

How does RUNE help secure the network?

Accepted Answer

Node operators must bond RUNE to participate in THORChain consensus and network operations; bonded capital links node misconduct to the operator's own economic loss. Project documentation states that RUNE bonded by nodes should always equal twice the total RUNE in liquidity pools, a ratio intended to make the value subject to node penalties greater than the value of RUNE in pools secured by the network. Accordingly, increasing liquidity in pools raises the scale of economic security required: as more external assets enter and are paired with more RUNE, the node side must also increase bonding accordingly. This mechanism is an economic constraint and does not guarantee the absence of technical, market, or operational risks.

Question 4

Must I hold RUNE to use THORChain?

Accepted Answer

Not necessarily. THORChain documentation explains that users do not need to hold RUNE in advance to use its exchange and liquidity services; actual interaction depends on the interface and transaction route used. However, RUNE is the settlement asset within pools. Participants wishing to provide symmetric liquidity, operate or delegate to nodes, or express pool-activation preferences through liquidity will directly encounter mechanisms for holding, pairing, or bonding RUNE.

Question 5

How is RUNE issued and supplied?

Accepted Answer

All RUNE tokens have been released, with no locked allocations or subsequent vesting schedule. The current project tokenomics page lists its maximum supply as approximately 360 million; this differs from earlier supply descriptions, and that page and the supply-restructuring record it cites should be used as the reference. Being released does not mean the quantity is permanently fixed. The protocol burns a portion of collected fees, so total and circulating supply continue to decline with burns; current figures should be checked through on-chain data or supply data designated by the project.

Question 6

How is RUNE related to network fees and rewards?

Accepted Answer

RUNE participates in THORChain's fee and incentive loop. Project documentation states that part of the fees generated by the network is burned, reducing RUNE supply; RUNE rewards received by validator nodes and liquidity providers come from fees generated by the network rather than newly minted RUNE for paying rewards. The cost ultimately borne by users is also affected by the specific operation, gas costs on the chains involved, and fee arrangements of the interface used. Protocol-layer fee burning or distribution does not mean each operation has only one type of fee.

Question 7

How does RUNE participate in THORChain governance signaling?

Accepted Answer

RUNE's governance role is mainly expressed through on-chain liquidity signaling rather than a standalone token-holder vote. Project documentation explains that when users symmetrically add liquidity to staged pools, they signal which pools they want activated; the deepest liquidity pools become active pools. Therefore, this signal requires contributing equal-value RUNE and an external asset to a pool, and the result depends on relative pool liquidity rather than merely the RUNE balance in a wallet.

Question 8

How do RUNE's mechanisms relate to its market supply and demand?

Accepted Answer

Demand for using RUNE and its price are not the same thing. Pools require equal-value RUNE, nodes require bonded RUNE, and some fees are burned; these mechanisms change the amount of RUNE in pools or bonds and the total supply. Network activity, external-asset prices, arbitrage, and participant behavior together affect the actual scale of these mechanisms. These relationships do not guarantee a price increase. Tradable market supply, trading depth, external-asset volatility, and the level of node and liquidity participation, among other factors, can all cause actual price performance to differ from that implied by any individual mechanism.

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