Rune Chameleon

11 Min Read
2273 words

chameleon1.jpg

So yesterday I was messing around with Rune and I came to some important realizations. I mean: basically Rune is amazing. This is something @khaleelkazi knew about in October 2020.

RUNE Has Become the Centerpiece of My DeFi Portfolio
Hm, yeah... back when RUNE was trading sub 60 cents.

Pretty wild.

So what I've come to realize about RUNE and associated THORChain is that RUNE is basically the Chameleon of the ecosystem. Bitcoin is more of the armadillo/hedgehog/porcupine animal; largely defensive in nature. You can't hack the governance of Bitcoin, because there is no governance structure to hack. Unlike DPOS, which has already been hacked in the most obvious way, if you know what I'm saying.

Hive is more like a pack animal that got scared off by fire and regrouped in another part of the forest. We're thirsty and scrappy as hell, but not super powerful; a pack of coyotes perhaps. Solitary hunters of a larger social structure.

Getting back to the point.

So RUNE is the Chameleon, but what does that mean? It means that if you hold RUNE, you're basically holding every other coin that RUNE is connected to. This is the crazy realization I came to when I discovered how easy it was to convert RUNE into LTC while simultaneously transferring that LTC to any on-chain wallet. The permissionless on-chain to on-chain interoperable connections are unparalleled across the entire sector.

chameleon2.jpg

You might be thinking, so what?

Take BTC for example. Bitcoin has liquidity EVERYWHERE. Everything is paired to BTC across every single centralized (and often decentralized) exchange. Using this same logic, couldn't we also say that Bitcoin is a Chameleon that can turn itself into any other asset?

Not really, because centralized exchanges don't count. Centralized exchanges require permission, and RUNE does not. Even trading an ERC-20 token into BTC on Ethereum is permissioned and bottlenecked. You must ask pretty pretty please to the centralized organization maintaining the peg to give you real Bitcoin when you cash out. This is not a good long-term solution.

In fact, pegged tokens are even worse than that. Not only must you ask a centralized agent to please give you your Bitcoin after you buy it, but also the wrapped ERC-20 version uses Ethereum consensus. If Ethereum consensus (or any other EVM consensus algorithm) fails then you lose the money... thinking you had the security of Bitcoin when in reality that security was hanging by a threat thread of multiple technical bottlenecks lurking in the background.

chameleon3.jpg

RUNE doesn't need permission.

Once we get used to the way https://app.thorswap.finance/ works, and navigate around the newfound complexity, the entire system is quite ingenious. If I hold RUNE I can easily transfer it into BTC, BCH, LTC, BNB, ETH, over a dozen ERC-20 tokens, and five BEP-20 tokens. I can transfer rune to any one of these 27 tokens, and the list is expanding. @khaleelkazi was dropping some major bombs in Discord today.

Khalmeleon

  • We are killing wLEO/ETH and moving to wLEO/RUNE.
    • This is a huge upgrade due to bot arbitrage and the intrinsic connection to RUNE, even though wLEO will still suffer from ETH fees.
    • Moving the Geyser into Rune means that wLEO/RUNE will have one of the highest (if not the highest) APR for pooling these two assets. This would be INCREDIBLE MARKETING. On Uniswap we are drowned out by thousands of tokens, but on RUNE we would be one of perhaps 30 or so tokens, with the highest yield no less.
    • Eventual migration to tLEO/RUNE would mean much lower fees and better arbitrage and overall experience.
    • Soon™

But wait... there's more?

image.png

Seriously, who does that?

Paying for it all out of pocket? Really?

It's reasons like this that I put @khaleelkazi and @theycallmedan on my team. This is the future. The business models of the future absolutely revolve around and rely on the builders giving away their product for free to the community. If you aren't doing that, I'm not interested. I will be supporting diehard altruistic developers like this until the bitter end. It's the only way to make it. Hell, maybe one day even @edicted will join the big boy club. Time will tell. WAGMI!

chameleon4.jpg

What does this mean for Hive?

Whelp, it means that Hive is going to look a bit silly until we pull our heads out of our asses and realize that AMM is the future. Can you imagine what people will say when shit-ass LEO has a pairing to RUNE and Hive doesn't? LOL, that's just embarrassing for us. I'm glad I'm not a top 20 witness yet. I would not want to deal with that blowback.

I've spoken a lot about AMM and how upgrading the internal market on Hive from an orderbook into an AMM passive yield farm would instantly 10x the price of Hive. However, I do realize the limitations. Even @yabapmatt comes in here to remind me that exponential liquidity on Hive/HBD internally does not translate to exponential liquidity outside of the ecosystem. This is absolutely correct.

Hive/HBD AMM is the backbone.

Once we have that HBD becomes a massive powerhouse of liquidity. Anyone who has HBD can trade it for Hive and back with very little slippage with little to zero fee (fee can technically be zero because resource credits act as the DDOS attack-vector mitigater, although perhaps not recommended in practice). But after we fully stabilize the stable coin and have near infinite liquidity, we much reach outside the chain and connect to the rest of the crypto world.

The most obvious connection is Bitcoin.

  • Everything is connected to Bitcoin.
  • Unfortunately Bitcoin doesn't evolve.
  • Bitcoin was not designed to be interoperable with other tokens.
  • Bitcoin was the first token, so we give it a free pass.
  • We must build around that limitation.

And RUNE has done exactly that.

So what Hive obviously needs in a RUNE connection, and LEO is going to get there first. Again, how embarrassing for us all running around on the main chain. Yikes.

Yield is the Crux.

The beauty of a network like Hive is that we could provide liquidity to a HIVE/RUNE pair in multiple ways. Even the Decentralized Hive Fund could be used for such an endeavor. Print out HBD dump the value into the LP pool so we have more liquidity. The network can pull the plug at any time by removing their votes if something goes wrong... quite and ingenious fail-safe with very little downside.

Transferring LTC into RUNE.

I use Trust Wallet to interact with https://app.thorswap.finance/ , but unfortunately for us Trust Wallet only connects to THORChain via Binance Chain (BEP2) and Ethereum (ERC20). Trust Wallet does not connect to Bitcoin Cash or Litecoin, which I find SUPER annoying. I assume this will eventually be programmed in but for now this is what we have access too.

So the last time I tried to get LTC into RUNE it took quite a bit of crypto gymnastics.

  • I used Huobi to send LTC to Binance Bridge.
  • This gave me pegged LTC on BSC.
  • Then I dumped that LTC for BNB (BEP20).
  • Then I transferred the BNB BEP20 (Smart Chain) to Trust Wallet.
  • Then I had to unwrap BEP20 into BEP2 Binance Chain.
  • Then I had @nealmcspadden transfer me RUNE gas.
  • Only then was I able to fully turn the LTC into RUNE.

As you can imagine I was like holy shit this user experience is going to fucking destroy all the newbies and will surely make them want to gouge their eyes out in frustration; such is crypto; this is the way. This is exactly why off-chain RUNE is worth more than on-chain RUNE; because no one actually wants to put up with any of that bullshit, they just want to gamble on a "shitcoin". RUNE is anything but a shitcoin but you know maximalists.

But what about RUNE into LTC?

I was so ready to endure the bullshit, but then it was like a glorious light parting the storm-clouds and revealing a pot of gold. Here are the steps to turn RUNE into LTC using Trust Wallet:

  • Sell Rune for LTC.
    Pick any on-chain wallet you like.

image.png

WHAT?!?!

Seriously? I had to jump through all those damn hoops to get the RUNE, but transferring it out is the easiest thing in the world? This was due to the fact that I didn't need Rune gas because I already had it, and the LTC gas gets paid automatically by the network on your behalf. Yet another reason why it's so obvious that on-chain RUNE is less expensive than off-chain RUNE. It's way easier to dump and it has a direct connection to 27 tokens (so far).

image.png

More on pegged RUNE

Something I learned during my crypto travels yesterday: if you buy off-chain RUNE you can "upgrade" it to on-chain RUNE. I used this feature yesterday and instantly lost myself about $200 with the click of a button.

image.png

So apparently there is no way to arbitrage this market.

I have no idea how these off-chain versions of RUNE were created, but the THORChain network is no longer allowing off-chain versions of the token to be minted. This means that all upgrades are one-way. Which heavily implies that at best, off-chain RUNE will be equivalent to on-chain RUNE. But more likely off-chain RUNE will be worth more than on-chain rune because it is impossible to downgrade on-chain RUNE into off-chain RUNE to balance the market.

I think the idea here is that off-chain RUNE is supposed to get phased out entirely so RUNE no longer allows off-chain versions to be created, but truly I have no idea and would love to see a comment below that explains the history of these tokenomics. In any case, it is what it is. I don't recommend "upgrading" your RUNE because it has more speculative value on centralized exchanges than it does actual value on the main chain, for the reasons described above.

Eventually the main-chain should gain enough value to suck most of the off-chain Rune off of BNB and ETH... but even then that just means liquidity gets lower and volatility and value of the off-chain versions increases as rarity increases. Not quite sure what they were thinking with this situation.

math magic rune.jpeg

But this is all beside the actual point.

The real point here is that RUNE is the future of liquid interoperability across all chains in the cryptosphere. This is something that @khaleelkazi realized over a year ago. If you don't have a RUNE pairing, your crypto aint shit. This is where the ball is going, so get on it, devs. It's gonna look real weird when a token on HiveEngine has a RUNE listing but we don't. That's cool though sometimes people need to learn the hard way.

image.png

Taking a look on RUNE liquidity

Native on-chain RUNE is barely listed anywhere. Binance exclusively uses the BEP2 version (for obvious reasons) that can be 'upgraded' for the 'real' native version, but ironically the real version is less valuable than the fake version at this point in time.

So the question we have to ask ourselves is the simple one. What happens when native RUNE starts getting real exchange listings, and then that native RUNE can be permissionlessly converted into dozens of tokens across multiple chains? Certainly, this is a good reason for RUNE to not get widespread adoption across the mainstream exchanges. Kinda sounds like a regulation nightmare to me, but I suppose that's the point now isn't it?

At the end of the day, it doesn't truly matter if native RUNE gets centralized exchange listings or not as far as long-term price action and usability is concerned. Why worry about getting centralized exchange listings when you are the decentralized exchange that's going to put them all out of business? Big brain logic.

techstartrekenterprisepoliticsmoneyregulation.jpg

It's become painfully obvious that regulators will flex their muscles as hard as they possibly can against crypto when the time comes. They want to control it, but they can only control the banks using it. Centralized exchanges are the regulated portal to/from the cryptosphere. RUNE provides a much needed permissionless alternative that can't be regulated, which is why it's so damn valuable.

Conclusion

Again, all Hive needs is a passive income internal AMM yield farm (HIVE/HBD), and a connection to RUNE/HIVE. Once we have that, we have infinite liquidity, not only to HBD stability but also to RUNE. Through RUNE we will have access to every other token on RUNE, which is quite significant. RUNE and THORChain provide an infinite blockhole of liquidity that cannot be denied. It's only a matter of time before we are forced there by necessity. There is no other competition available at this time. THORChain is it.

Once we have RUNE, we have anything connected to RUNE. RUNE is the chameleon of the cryptosphere. The ease of which it is to transfer RUNE to any other asset directly on chain can not be overstated. This is not something we can find anywhere else in terms of backend decentralization. Rune is truly decentralized, and it employs the main-chain security of the networks that are linking up with it. Truly, this is the best of all worlds.

Posted Using LeoFinance Beta