Monthly Treasury Report

THORChain Monthly Expenses, Budget and Runway Report for December 2019

THORChain

31 Dec 2019 — 3 min read

Overview

The current treasury is around $1.2m USD, sufficient for an 18 month runway. OTC Sales were completed in the preceding month, alongside ongoing liquidity provision to bolster the treasury. The Community Reserve is fully-allocated to RUNEVault, which will be capped at 1m per week. Upcoming large expenses will be to fund the audit and code reviews.

Treasury

The treasury has increased by around $130k USD in the prevailing month, despite some contractions in BTC and BNB value. The increase in treasury was primarily due to a number of significant OTC sales from the Operational Wallet.

The team will rebalance the treasury portfolio to be at least 50% USDT, and no more than 15% BNB. BTC and BNB is being kept in the treasury since these are important assets to ensure a successful BEPSwap and ASGARDEX launch, as well as ensuring the current market liquidity.

Liquidity Provisioning

The THORChain team are obliged to ensure appropriate liquidity on all RUNE market pairs and have been doing so since the initial launch. This is public information and has been discussed previously, such as this blog here. The team use a third-party to do so, who are paid a monthly retainer in RUNE. This is important to ensure sufficient on-market liquidity, which is especially the case since so much RUNE is locked in RUNEVault. When BEPSwap is launched, RUNE will become very liquid and there will no longer any need to maintain liquidity around current markets. In the previous month, significant public buying pressure resulted in a large amount of Rune being budgeted for market requirements.

OTC Sales

The team completed a number of OTC sales in the previous month, the largest of which was announced here. The team responded to OTC demand, plus the need to ensure the treasury is sufficient to deliver on BEPSwap. All OTC sales come from the Operational Reserves. Since large Rune holders can become points of weakness later on, the team won’t disclose publicly the identities, leaving any announcements to the investors themselves.

The team have a lot of registered interest for further sales. Sale partners will be chosen based on net value-add to the project. Existing investors are highly supportive of the project and continue to bring value.

Operational Reserve

The month saw mostly full use of the reserve going to dev expenses, liquidity requirements (as explained above), OTC sales (in addition to the 3.25m Sale) and expenses as associated with the Eterbase listing.

Community Reserve

The Community Reserve is allocated to RUNEVault and other community campaigns. The team have decided to cap RUNEVault emissions at a maximum of 4m per month (1m per week), to prevent runaway growth due to much higher than expected staking rates.

4.4m RUNE was used for Community Campaigns

Once RUNEVault is retired, the team and community will come up with a plan for the remainder of the Community Reserve. One of the promising suggestions so far is to use the remainder of the Reserve as liquidity incentives for launches on new chains to ensure maximum growth.

Runway

The current project runway is around 18 months. The team have a hiring funnel open in order to build more cross-chain infrastructure, especially around the Asgard Wallet, so monthly expenses will increase going forward. This will be mitigated with further OTC sales.

Upcoming Expenses

Large upcoming expenses will likely be around the Code Review, TSS Audit and Economics Review. The team are budgeting up to $150k for this, but it hasn’t yet been fully costed.