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RUNE, the native token of the decentralized, cross-chain exchange THORChain, is under heavy pressure. From the daily chart, the coin is down almost 60% from its May highs and has remained stable even as the broader crypto market recovers.
Even with the RUNE price stable, there is confidence that the price may rise in the coming days primarily due to fundamental factors and the efforts of the development team.
THORChain Revenue Soars After Swap Fee Increase
In a post on X, one analyst said, male THORChain has nearly doubled its revenue in the past two days after the community decided to increase the minimum swap fees on the DEX.
Recently, THORChain node operators approved and implemented a proposal to increase the swap fee for native layer 1 exchanges to 0.05%. The analyst notes that this seemingly minor change has had a profound impact on the THORChain protocol, increasing daily revenue by nearly 100%.
Interestingly, the analyst noted that while fee increases in protocols tend to negatively impact user experience, they had the opposite effect on THORChain. While swap fees increased, users did not decline. Instead, swap volume stabilized while average fees per transaction increased.
With transaction fees on the rise, THORChain’s weekly liquidity fees now exceed the block reward, a major achievement for DicksIt is worth noting that the major shift in revenue generation is likely to push the RUNE burn rate higher once ADR 17, a community proposal, is implemented in the coming days.
The more RUNE coins are taken out of circulation, the more scarce the coin becomes, driving up prices. Once ADR 17 is implemented, the protocol will be in place. Buy and burn $1 RUNE for every $10,000 of revenue generated. For this reason, higher revenue due to higher swap fees means more RUNE burned.
RUNEPool Liquidity Impact: Will RUNE Hit $5?
In late July, THORChain also introduced RUNEPool to help further incentivize liquidity provision. Users can freely deposit RUNE via the THORSwap and THORWallet interfaces into a range of diverse tokens through this feature.
In this way, they help reduce the risk of impermanent loss while increasing liquidity. As of August 9, more than 3.7 million RUNE have been deposited by 265 liquidity providers in RUNEPool.
Despite these changes, RUNE remains under massive selling pressure, though it is holding steady at the time of writing. After the crash in early August, which sent prices below the July lows, the coin has struggled. However, if spot prices recover to above the July highs of around $5, the coin could rally above $7.5.
