Thorchain’s latest upgrade, ADR 17, has officially completed its first week, bringing significant attention to its unique Rune burning mechanism. The ADR 17 protocol, which burns 0.01% of system income every block, was implemented a week ago with the aim of reducing the total supply of Rune ($RUNE) over time.
Since its launch, a total of 36 $RUNE have been burned, with an average daily burn rate of 4.5 $RUNE. While this is a modest start, the potential for more significant burns exists, as node operators can vote to increase the burn rate. Thorchain has hinted at a target burn rate of 5% of system income in the future, a massive increase from the current 0.01%.
At the current rate, the deflationary mechanism is only just beginning to make an impact. However, should the burn rate increase to 5%, as suggested by prominent Thorchain community member @jpthor, the amount of $RUNE burned could reach 18,000 since ADR 17’s implementation, averaging 2.2k $RUNE burned per day. This would result in approximately 803k $RUNE burned over the course of a year.
The long-term vision of ADR 17 is clear: to decrease $RUNE’s total supply, increase scarcity, and potentially drive value for holders as system income continues to grow. While the first week has yielded conservative results, the mechanism lays the foundation for a deflationary future for Thorchain’s native token.
Source: Rayyyk on X
