The Concept
bRUNE is a liquid staking derivative for RUNE on THORChain.
You give the contract RUNE and receive a token called bRUNE. Your RUNE gets bonded to THORChain validator Nodes to earn yield, while you hold bRUNE, which you can trade or use in DeFi.
Part 1: Minting (Getting In)
You send RUNE to the contract via a DEX called FIN, which operates as an order book. You receive bRUNE back at a 1:1 ratio. If you send 100 RUNE, you get 100 bRUNE. This can vary slightly depending on available liquidity.
Once the RUNE enters the contract, it is split:
90% is bonded to THORChain Nodes to earn yield.
10% remains liquid in the contract as a withdrawal buffer.
Part 2: Burning (The Exit Mechanism)
This is where bRUNE differs significantly from typical liquid staking derivatives like Lido.
Typical LSD:
You queue a withdrawal and wait days or weeks to receive your assets back at 1: 1.
bRUNE:
You can exit instantly, but you accept market pricing.
You cannot redeem bRUNE for RUNE at a guaranteed 1:1 ratio. Instead, redemption uses an XYK curve, the same pricing model used by Uniswap.
The contract compares total bRUNE minted against the liquid RUNE buffer it holds:
If the buffer is full, the price is close to 1: 1.
If many users exit at once, the buffer drains and slippage increases.
The bid price is always at or below 1:1, never above. You are effectively paying a spread, default 1%, plus slippage for the benefit of instant liquidity.
Part 3: The Rewards (Revenue Smearing)
bRUNE uses a system called “Revenue Smearing” to reduce MEV extraction.
When Nodes earn yield, the contract does not distribute it instantly. Instead, revenue is added to a pending pool and released gradually over approximately 24 hours, about 100,000 seconds.
This prevents scenarios where bots deposit just before a reward distribution and withdraw immediately after.
Important Note on Yield
Unlike stETH, where your balance increases automatically, or rETH, where the token price appreciates, holding bRUNE in your wallet does not earn yield automatically.
Revenue flows to a separate staking contract. You must stake your bRUNE in that companion contract to receive your share of Node income.
Part 4: Node Management
The contract acts as a fund manager.
It bonds RUNE to a whitelist of THORChain Nodes. It prioritizes Nodes with lower fees to optimize yield and enforces caps on how much bond a single Node can receive to maintain diversification.
Summary vs Traditional LSDs
Minting:
bRUNE is minted 1:1 via an order book. Others use direct deposits.
Redemption:
bRUNE offers instant exit with slippage. Others offer 1:1 redemption but require waiting in a queue.
Yield:
bRUNE requires active staking in a separate contract. Others distribute yield automatically.
The Bottom Line
bRUNE is designed as a DeFi building block.
It offers instant exit liquidity at a market-determined price instead of forcing you to wait through a strict unbonding period. It is less “set and forget” and more active management.
