ADR023 - Changing RUNE FDV

THORChain Intern

— 3 min read
ADR023 - Changing RUNE FDV

THORChain’s ADR023 proposes a restructuring of the RUNE supply framework with a clear objective: simplify tokenomics and improve how the asset is perceived and evaluated.

As the protocol has evolved, multiple legacy mechanisms have remained embedded in the supply structure. These no longer reflect how THORChain operates today. Instead, they introduce unnecessary complexity, particularly for new market participants attempting to assess RUNE.

ADR023 doesn't aim to modify core protocol mechanics but to simplify the tokenomics, getting rid of minted RUNE that have never circulated.

To understand ADR023, the first step is to understand the role of the Reserve in THORChain. Historically, the Reserve has played multiple roles within the protocol:

  • Block Rewards (BR): incentives to nodes and liquidity providers (inflation).
  • Inbound and outbound buffers: ensuring smooth settlement of swaps and covering gas costs.
  • Exploit buffer: acting as a backstop to compensate users in case of protocol failures.

These functions made the Reserve a critical component of THORChain’s early design. However, the protocol has evolved.

With the removal of block rewards more than a year ago, the Reserve is no longer actively used at the same scale. Its operational role has been reduced to a minimal settlement and safety buffer.

Today, the majority of the Reserve is simply non-circulating RUNE sitting within the protocol. This distinction is important because these tokens are:

  • Not traded
  • Not actively used
  • Not part of market liquidity

As a result, they don't carry real economic value in the market. Instead, they represent a form of potential dilution if ever introduced into circulation.

This creates confusion around RUNE actual supply.

💰Current Tokenomics

THORChain’s supply has evolved through multiple phases. The initial maximum supply was 500M RUNE. But since then, several adjustments have taken place:

  • 13.9M RUNE removed from tokens that were not migrated from BEP2 to native.
  • 60M RUNE burned during ADR012 to support the old lending mechanism.
  • 0.9M RUNE burned through the protocol’s 5% fee burn mechanism.

This brings the current maximum supply to approximately 425.3M $RUNE.

However, not all of this supply is actively circulating:

  • 71.2M RUNE remain in the Reserve, largely unused since the end of block rewards.
  • 2.9M RUNE are allocated to Protocol-Owned Liquidity (POL) from the THORFi era.

👉 This leaves approximately 351.2M RUNE circulating and actively used (as of October 2025).

For a full breakdown, see the official report:
https://blog.thorchain.org/thorchain-tokenomics-as-of-oct-2025/

🔁 What ADR-023 Changes

ADR023 proposes to remove the majority of this non-circulating supply. Specifically:

  • Around 64.9M RUNE from the Reserve will be burned
  • A small balance will remain for operational and safety purposes

This effectively eliminates the bulk of unused supply that currently sits outside of circulation.

Following this change, total supply will be reduced to approximately 360M RUNE, aligning much more closely with the actual circulating supply.

💡Why This Matters for Investors

This change is not just cosmetic. It directly impacts how RUNE is valued. Usually investors use two key metrics:

  • Market Cap: based on circulating supply
  • Fully Diluted Valuation (FDV): based on total or maximum supply

FDV represents the value of a protocol if all tokens were in circulation. It is widely used by traders and analysts to assess dilution risk and long-term valuation. Under the current structure, THORChain shows a gap between the circulating supply (~351M RUNE) and the total supply (~425M RUNE).

This creates an artificial overhang in FDV, even though a large portion of that supply is not actually usable (and will never be). By removing non-circulating tokens, ADR023 reduces this gap and provides a cleaner valuation framework.

This also has implications for profitability metrics.

THORChain has recently been identified as one of the few profitable DeFi protocols. At the moment, the MC/FDV ratio is around 70%, suggesting potential dilution. This ratio could move closer to 100% with ADR023. In addition, the price per share would become more accurate and more attractive to investors.

👉 Less artificial supply → clearer valuation → better comparability with other protocols.

Source: https://x.com/DefiIgnas/status/2028885479459045606?s=20

Conclusion

ADR023 is a structural simplification of RUNE tokenomics. It recognises that a large portion of the current supply is no longer relevant to how the protocol operates. By removing this non-circulating supply, THORChain aligns its token model with its current reality.

The proposal has already passed. Following implementation in an upcoming protocol upgrade, total supply will decrease to approximately 360M RUNE.

This does not change how THORChain functions, but it does change how investors and traders approach RUNE from an investment perspective.

– – – – – – – – – – – – – – –
Swap now 👉 swap.thorchain.org
Official website 👉 thorchain.org

🔽 Follow THORChain 🔽
X (Twitter) / LinkedIn / Reddit / TikTok / Instagram / Facebook / Blog

🔽 Join the community 🔽
Telegram / Discord / Discord (Developers)
– – – – – – – – – – – – – – – – –

Read more