THORChain RUNE Token Pressure Amidst Revenue Rise
RUNE, the native token of THORChain, is facing pressure as it remains nearly 60% down from its highs in May. Despite this, there is optimism that the token may rally in the upcoming days due to fundamental factors and recent developments by the team.
THORChain Revenue Surge After Fee Adjustment
An analyst highlighted that THORChain has experienced a significant revenue increase over the past few days after a decision by the community to raise the minimum swap fee on the decentralized exchange (DEX).
- The swap fee increment led to a revenue surge of nearly 100% for THORChain.
- This change, while seemingly minor, had a profound impact on the protocol, boosting daily revenue.
- Despite the fee increase, users continued to transact on the platform, stabilizing swap volume.
Effect on Liquidity and Token Burning
With the rise in transaction fees, weekly liquidity fees on THORChain now surpass block rewards. This milestone will enhance the RUNE burning rate once a proposed community change, ADR 17, is put into effect.
- Increased revenue from the fee adjustment will result in more RUNE being burned.
- As more tokens are removed from circulation, the scarcity of RUNE will rise, potentially boosting prices.
- Under ADR 17, the protocol will buy and burn $1 worth of RUNE for every $10,000 in revenue generated.
RUNEPool and Liquidity Impact on RUNE Price
To incentivize liquidity provision, THORChain introduced the RUNEPool feature in late July, which allows users to deposit their RUNE into a pool of diversified tokens, reducing impermanent loss risks.
- Over 3.7 million RUNE have been deposited by 265 liquidity providers into the RUNEPool.
- This move aims to enhance liquidity and reduce the selling pressure on RUNE.
Potential Price Movement of RUNE
Despite the challenges faced recently, RUNE has shown resilience and stability in the market. If the token manages to recover from its recent bearish trend and surpass previous highs, it could see a significant price surge.
- A move above July highs of around $5 could propel the token to break the $7.5 mark.
- Investors are closely watching the price action of RUNE for potential bullish signals.
Hot Take: Navigating the THORChain Ecosystem
As an investor in the crypto space, it is crucial to stay informed about the developments within the THORChain ecosystem and how they may impact the price and performance of the RUNE token.
By understanding the revenue dynamics, liquidity incentives, and token burning mechanisms, you can make informed decisions about your investment strategy in THORChain and its native token, RUNE.
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