THORChain’s native token, RUNE, has been facing challenges recently. Despite the broader crypto market’s recovery, RUNE has remained flat and is down nearly 60% from its May highs. However, there are several factors that suggest a potential rally in the near future.
One fundamental factor is the increase in THORChain’s revenue. The community recently approved a proposal to raise the swap fee for layer-1 native exchanges to 0.05%. This seemingly minor change has had a significant impact on THORChain’s protocol, increasing daily revenue by almost 100%. Surprisingly, the fee increment did not deter users, and swap volume remained steady while the average fee from each transaction surged. The rise in transaction fees has led to weekly liquidity fees on THORChain exceeding block rewards, which is a major achievement for the decentralized exchange. Once a community proposal called ADR 17 is implemented, the protocol will buy and burn $1 worth of RUNE for every $10,000 revenue generated. This will reduce the circulating supply of RUNE and potentially drive prices higher.
Additionally, THORChain introduced the RUNEPool feature in late July to incentivize liquidity provision. Users can deposit their RUNE into a pool of diversified tokens, reducing the risks of impermanent loss and increasing liquidity. Over 3.7 million RUNE have already been deposited by 265 liquidity providers into the RUNEPool.
Despite these positive developments, RUNE is still under selling pressure. However, if there is a recovery above July highs of around $5, the token has the potential to surge to over $7.5.
Overall, despite the current struggles, the increased revenue and efforts made by the development team suggest a positive outlook for RUNE in the coming days.