RUNEPool

RUNEPool aims to enhance liquidity provision, attract a broader market, and maintain dominance in TVL across the crypto ecosystem.

RUNEPool is a feature of THORChain designed to optimise the utilisation of RUNE by depositing it into every POL-enabled liquidity pool in the network. By pooling RUNE and distributing it across all Protocol-Owned Liquidity (PoL)-enabled pools, RUNEPool allows participants to earn the net Annual Percentage Yield (APY) of these liquidity pools, but they are also exposed to the IL of the aggregate position. Poolers do not choose individual pools but share in the aggregate performance. Users are exposed to RUNE and all PoL-enabled assets within the network; therefore, participating in RUNEPool is effectively analogous to purchasing an index of RUNE and all PoL-enabled assets within THORChain. This approach simplifies the process of liquidity provision, reducing individual risk and the cognitive burden associated with managing multiple liquidity positions.

RUNEPool Specifics

Minimum RUNEPools Term: There is a minimum term for RUNEPool participant defined by the config RUNEPoolDepositMaturityBlocks. This is the number of blocks from the last deposit that a withdraw is allowed.
Impermanent Loss Management (IL): Users experience aggregate IL across PoL-Enabled pools instead of individual pools. Aggregate IL is less than the IL from any one pool, reducing the risk. However, there is still a risk of IL resulting in negative yield.
Volume and Fees: Volume currently drives fees due to arbitrage. If RUNE volatility decreases, fees will primarily come from cross-chain swaps, potentially resulting in fewer fees but also reduced IL.
Idle/Standby RUNE: RUNE within the RUNEPool that is not deployed is shared by all participants relative to their Pool Units. While this static RUNE may reduce yield due to non-deployment, it also reduces exposure to impermanent loss (IL). Additionally, it allows for future demand from savers to be met more efficiently.

Usage

The RUNEPool is utilised by creating transactions with specific memos. MsgDeposit must be used, and RUNEPool only works with native RUNE. Positions within the RUNEPool can be queried using endpoints.

Add to the RUNEPool: Use a MsgDeposit with the memo pool+. For detailed instructions, refer to the Add to the RUNEPool section.
Withdraw from the RUNEPool: Use a MsgDeposit with the memo pool-:<basis-points>:<affiliate>:<affiliate-basis-points>. For detailed instructions, refer to the Withdraw from the RUNEPool section.
View all RUNEPool holders: Use the endpoint rune_providers to see a list of all RUNEPool holders.
View a specific RUNEPool holder's position: Use the endpoint rune_providers/{thor owner address} to view the position of a specific RUNEPool holder.

How It Works

PoL-Enabled Pools

POL-Enabled via mimir key POL-{Asset}. Currently all (eight) native assets and five USD stable coins are enabled for POL. Exact list is within the mimir endpoint.

RUNEPool Units (RPU)

Ownership in RUNEPool is tracked through RUNEPool Units (RPU). These units represent a Pooler’s share in the pool. When a Pooler redeems their units, the total PoL size in RUNE is assessed, and the holder's share is distributed, which may be more or less than their initial contribution.

RUNEPool.ReserveUnits     // Start state is RUNE value of current POL
RUNEPool.PoolUnits        // Deployed RUNEPool provider units
RUNEPool.PendingPoolUnits // aka "static", undeployed RUNEPool provider units

reserveExitRUNEPool function: Transfers ownership units from the RESERVE to poolers, reducing RESERVE's units
reserveEnterRUNEPool function: Transfers ownership units from poolers to the RESERVE, increasing RESERVE's units

RUNEPool Deposit

Upon a user's deposit, the balance is moved to runepool module.
Corresponding units are added to PendingPoolUnits.
The reserveExitRUNEPool function moves PendingPoolUnits to PoolUnits, corresponding amount deducted is from ReserveUnits, RUNE is then moved from runepool module to the reserve module.

RUNEPool Withdraw

If PendingPoolUnits is insufficient for the withdraw, the reserveEnterRUNEPool function moves RUNE from the reserve for the difference, ReserveUnits increased, PoolUnits moved to PendingPoolUnits.
The withdraw is processed from PendingPoolUnits.
If a withdraw would result in a reserve deposit that is greater than POLMaxNetworkDeposit + RUNEPoolMaxReserveBackstop the withdraw will not be allowed.

Showing PnL

Global PnL

The /thorchain/runepool endpoint returns the global Pnl of RunePool, as well as of the two RunePool participants: the reserve, and independent providers. The value and pnl properties are in units of RUNE. current_deposit equals rune_deposited - rune_withdrawn and can be negative.

{
  "pol": {
    "rune_deposited": "408589258319",
    "rune_withdrawn": "208496086616",
    "value": "206166561256",
    "pnl": "6073389553",
    "current_deposit": "200093171703"
  },
  "providers": {
    "units": "232440861",
    "pending_units": "0",
    "pending_rune": "0",
    "value": "319161454",
    "pnl": "56394430",
    "current_deposit": "262767024"
  },
  "reserve": {
    "units": "149915806863",
    "value": "205847399802",
    "pnl": "6016995123",
    "current_deposit": "199830404679"
  }
}

The /thorchain/rune_provider/{thor_addr} endpoint will return a single providers position information including pnl:

{
  "rune_address": "thor19phfqh3ce3nnjhh0cssn433nydq9shx76s8qgg",
  "units": "232440861",
  "value": "319161517",
  "pnl": "56394493",
  "deposit_amount": "3500000000",
  "withdraw_amount": "3237232976",
  "last_deposit_height": 14357483,
  "last_withdraw_height": 14358846
}

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