THORChain Analysis – Multicoin Capital

Multicoin Capital has accumulated a large position in RUNE, the native token of THORChain, a decentralized cross-chain automated market maker (AMM). RUNE represents one of our largest public positions.

We believe that THORChain—which provides a trust-minimized way to trade spot tokens (not just derivatives) across blockchains—is a foundational piece of crypto trading infrastructure that will play an increasingly critical role within the crypto ecosystem as it continues to grow bigger and become more diverse.

There is a tremendous opportunity to build products that enable trust-minimized, cross-chain trading. In a world where many chains and tokens exist, traders naturally want to be able to trade assets across chains in a trust-minimized way.

The first of such cross-chain trading examples was the Tier Nolan atomic swap. Since then, others such as Simple Payment Verification, Relays, and Merged Consensus have emerged. However, despite their best intentions, none of them ever successfully gained traction for an abundance of reasons (e.g., too slow, free option problem, too expensive, etc).

In the years since the first cross-chain swap products launched a few years ago, the crypto ecosystem has become more heterogeneous: 80% of the top 25 tokens by market cap on CoinGecko are Layer 1 tokens of their blockchains. The diversity of chains creates the need for a trust-minimized, decentralized way to trade spot tokens across chains.

As new smart contract platforms like Solana, Polkadot, Near, and Avalanche mature, the number of chains is growing. As these ecosystems mature, the overall technical composition of crypto will become more heterogeneous rather than homogeneous.

Most investors have exposure to the blockchains they think will win; however, few actually have exposure to the growing heterogeneity of the overall ecosystem. This is a major opportunity, and we believe THORChain’s RUNE token is the best way to invest in this thesis.