THORChain announces RUNEVault 2.0 proposal, aiming to optimize LP experience

THORChain released a new proposal on its GitLab page, revealing details about RUNEVault 2.0. The proposal aims to improve the user experience for liquidity providers, especially those who face poor experiences as dual liquidity providers (Dual-LP).

The core of RUNEVault 2.0 allows RUNE holders to "stake" their RUNE in RUNEVault to earn returns based on the performance of all liquidity providers in the pools. Unlike choosing specific asset pools, RUNEVault participants invest in all pools and share the performance of the entire protocol.

The proposal emphasizes that through RUNEVault 2.0, the protocol transfers risks to participants, thereby reducing the risk of the entire system. In addition, this reduces cognitive burden, as liquidity is provided in a single asset, and returns are received in a single asset. This is seen as a way to lower risk and create index-based products, where participants do not need to choose a single asset pool, but invest in all pools together.

In terms of implementation, the RUNE contributed by RUNEVault holders will be used to provide liquidity, and when RUNEVault holders exit, they will receive corresponding RUNE payments based on their share in RUNEVault. RUNEVault is designed to attract long-term holders and may set a minimum holding period of 90 days or even 12 months to avoid temporary losses that short-term holders may encounter.