The last time we covered this asset, our price target hinted at a 30X upside. Turns out we were wrong! This project has seen some incredible developments; it is a leader in a growing sector, yet, it’s not on the radar of most investors.

While this token is not the centre of attention, all the fundamentals exist for the ecosystem to explode.

And that’s why we are revisiting our analysis; instead of a 30X, there’s 90X potential on the horizon.

Read all the deets here!👇

TLDR 📃

• THORChain is fast becoming the Swiss army knife of DeFi protocols.
• THORSwap has cut THOR emissions by around 70%, dramatically reducing token inflation.
• As the fundamentals rapidly become stronger, all the THORChain ecosystem needs now is users to take off.
• Both THORChain and THORSwap are still firmly in Cryptonary’s sights, with a target of $90 for RUNE and $12.50 for THOR.

Disclaimer: Not financial or investment advice. Any capital-related decisions you make are your full responsibility.

State of THORChain ⚡

If you’ve been around for a while on Discord, you’ll have heard of RUNE and THOR. They’re the most discussed asset among our members.

And that’s with very good reason.

As one of the market’s leading cross-chain solutions, the THORChain ecosystem has quietly fleshed out one of the most comprehensive, fundamentally sound economic models we’ve ever seen.

For those unfamiliar with THORChain, we recommend reading our 30x report, where it all began.

The original thesis didn’t play out to our timeline as rampant money printing by the US Federal Reserve forced the world’s central banks into defensive mode against soaring inflation.

However, the fundamentals of THORChain are vastly better than when we first reviewed the protocol.

Starting with the introduction of its lending service, THORChain is on the fast track to becoming the pseudo-bank of the crypto world.

Lending introduces a few benefits to the protocol:

• Increased liquidity efficiency in the system, which boosts revenue and real yield.
• Increased trading volume.
• Increased bond facilitating further growth of THORChain.
• A new, attractive capital sink.

Beyond lending, there’s ongoing work on an orderbook to allow THORChain users to place orders rather than just swap. After lending, the orderbook is the most hotly anticipated new feature.

Why?

Currently, THORChain acts as any other standard DEX allowing straight swaps at an instantaneous price. The orderbook transforms THORChain into a true DEX, capable of facilitating the sort of high-frequency trading that drives volume on the largest exchanges in crypto.

But not only that, with orderbook comes the possibility for THORChain to enter another sector…

Derivatives.

Perps are a revenue-generating machine. 

Crypto participants love leverage; they love it even more without the KYC requirements of CEXs.

There will be an upsurge in trading activities once THORChain taps into this market.

But how will traders access all these excellent new features?

THORSwap signals better things ahead 📈

By far, THORSwap is the most-used front end for THORChain, capturing over 75% of the market share amongst protocols using THORChain.

Many new users attracted by THORChain products will gravitate towards THORSwap. In turn, this will lead to higher revenue generation on THORSwap– this revenue is shared with THOR stakers.

We have seen the correlation between THOR price and THORSwap revenue lead to huge gains on THOR before.

Throw high-frequency derivatives trading in the mix, and we have the recipe for 2022’s price action on steroids.

But we are not just speculating that users will come in or that future derivatives product will take off.

From a tokenomics perspective, we would say that THOR has become 3-4 times more attractive now than in 2021 when we first analysed it.

Here’s why

Managing inflation on THOR

THOR has suffered from high inflation over the last few years. Our original report stated that staking THOR as soon as it was purchased was essential to counter the inflation. This inflation has contributed to the significant downside in price we have seen on THOR.

THORSwap has recognised this issue and has been gradually reducing protocol emissions over the past few quarters.

In real terms, this has resulted in a ~70% reduction in THOR faucet emissions. This represents significantly less sell pressure in the longer term, and for speculators (degens) like us, THOR has become more attractive purely from this reduction.

Additionally, THORSwap has introduced a burning mechanism to reduce the FDV through TIP-003.

For those who want to hear more about THORSwap - you’re in luck!

We recently recorded a Twitter space with them, which you can find here.

Why is THORChain underperforming? 🤔

Now, there’s the elephant in the room - price.

If the fundamentals are great, why have the THORChain ecosystem’s charts been grim for months?

RUNE is down 95% from all-time highs and down 66% from when we launched the 30x report.

Additionally,, RUNE has underperformed in most of the market rallies.

Why?

Unfortunately, what makes RUNE so valuable also causes it to face significantly more downside price volatility than other tokens.

Namely, the amount of liquidity in the system. Several factors are at play here:

• Bear market leads to reduced users for THORChain and THORSwap.
• Decreased usage results in lower revenue for both protocols.
• Reduced yield from liquidity pools due to fewer participants.
• The diminished incentive to provide liquidity leads to fewer RUNE locked up.
• Bear market causes a significant USD value drop in assets backed by RUNE.
• USD value decline of assets contributes to RUNE's USD value decline.

Thus, we see the sort of catastrophic price action witnessed over the last year or so.

But here’s the neat part - the opposite happens in a bull market…

Price analysis 📈

So, the fundamentals are solid.

Where do RUNE and THOR sit on the technical side of things?

RUNE

RUNE has had quite a rough patch lately. We saw it losing $1 as support, but now, its price is back at that level.

First of all, RUNE's weekly market structure remains bearish. Even if it reclaims $1, we'd still have to wait for a change in market structures to confirm that RUNE has more upside in the tank.

Now, let's explore other possibilities for a second...

The market is back in full strength, and Bitcoin is set for new weekly highs, so RUNE will obviously follow the upside. Because of that, the ideal entry would be $1 (only once reclaimed), with a weekly closure under this level as invalidation.

Think of this level as the ultimate safe zone for RUNE. It's not just a technical level but also a psychological one from where more buyers can step in than on any other level.

THOR

THOR, hold on! Let us catch some gains too! 🤕

This week has been nothing but crazy for THOR. We saw its price rise a staggering ~115%, which makes it the best-performing token lately.

You go, THOR!

But Cryptonary, what now??

We confidently say that THOR has risen too much for us to consider it a solid buy. Ideally, we'd want to see its price returning to test the $0.13 level as support. This will provide a much better risk/reward ratio for a trade. Otherwise, we'd be buying the top.

Can THOR continue rising and reach $0.20 as well? Our answer is... f*ck yeah. This amount of demand attracts not only institutions but also retail investors. Think of the current pump as a chain reaction - someone starts the pump, and others keep it alive.

Still, we recommend waiting for a better entry point, which would be $0.13.

So what do we make of all this?

Cryptonary’s take 🧠

Cross-chain swaps are essential in the crypto landscape. But what started as a simple, effective method of moving assets between chains has become so much more.

With the pace of new product launches and refinement of existing products, THORChain is rapidly filling niches in a wide range of sectors.

In terms of timing, there’s not much to say other than; it's a waiting game.

The market is focusing on Ethereum and its Layer-2s at the moment. But that narrative will eventually become saturated, and other chains will return to the limelight.

And THORChain will be right at the centre of that play.

Regarding price targets, our long-term end goals remain unchanged

• $90 for RUNE
• $12.50 for THOR

Yes, we’re doubling down; CPRO’s 30x becomes a 90x.

As always, thanks for reading! 🙏

Cryptonary, out!