Why THORChain (RUNE) is the Hottest DeFi Coin of 2023

THORChain (RUNE), the native token of the cross-chain decentralized exchange, is soaring to new heights with a 31.5% surge in the last 24 hours. According to onchain data, RUNE has been on a remarkable bull run in the past few weeks, gaining 115.0% and 212.3% on the 14-day and 30-day charts, respectively. This impressive performance has pushed the DeFi coin to a new yearly high of $5.39 and a record daily trading volume of $1.28 billion.

What’s Driving RUNE’s Rally?

RUNE’s explosive growth can be attributed to the recent innovations on the THORChain platform. In the THORChain Q3 2023 Ecosystem Report, the DEX’s development team announced the launch of new features such as lending, streaming swaps, streaming loans, and savers for stablecoins, among others.

One of these features, streaming swaps, has been particularly instrumental in boosting RUNE’s value. Streaming swaps allow large swap requests to be split into smaller ones that are executed over time. This increases the platform’s swap volume and the annual percentage rate (APR) offered to liquidity providers.

As more liquidity providers are attracted by the high APRs, they have to invest in RUNE, which is the base asset of every liquidity pool on THORChain. This creates a positive feedback loop known as the liquidity flywheel.

$RUNE keeps making new highs. The reason for this is the liquidity flywheel. I'll show you how it works and why it will push $RUNE much higher. @THORChain is built on liquidity pools. As the infrastructure is used for swaps, liquidity providers make money. The base asset of…

— The Wolf of Defi ⭕️ (@thewolfofdefi) November 11, 2023

Another factor that supports RUNE’s rally is the network nodes’ role in balancing the liquidity pools. Whenever a liquidity provider deposits a non-RUNE asset into a pool, the nodes match it with an equivalent amount of RUNE. This creates more demand for RUNE in the market, which drives up its price.

RUNE Price Outlook

RUNE’s daily chart shows that the token is currently in the overbought zone, with a relative strength index (RSI) of 87.24. This suggests that a price correction may be imminent at $7.7 or $10 as the phycological level. However, RUNE may also continue its upward momentum, especially as the THORChain team plans to introduce more features, such as order book trading.

At the time of writing, RUNE is trading at $5.20, with a few percentage increase in the last hour. The token’s market cap is $1.58 billion, making it the 41st largest cryptocurrency in the market.