RUNE Decline Affects THORChain’s DeFi USD Total Value Locked in Q1, While Native Deposits Soar

THORChain experienced a challenging beginning to 2025, as the Layer 1 network confronted increasing macroeconomic demands, internal network issues, and fluctuations in altcoin market sentiment. After a volatile close to 2024, the price of THORChain’s native asset, RUNE, underwent a significant decline in the first quarter of 2025, finishing at $1.14, a drop of 74.5% from the previous quarter.

This performance lagged behind leading cryptocurrencies, with Bitcoin and Ethereum decreasing by 12.6% and 45.5%, respectively. RUNE’s market valuation fell by 73.8% within this timeframe, plummeting from $1.5 billion to $400.9 million, marking its lowest point since mid-2022.

THORChain Sees 50% Decline in USD TVL

As noted in the latest analysis, the decline in RUNE’s price significantly affected THORChain’s presence in the DeFi space, with total value locked (TVL) in USD dropping by 50.5%, from $368.6 million to $181.1 million by the close of the quarter. TVL had reached its peak at $367.7 million on January 2, before it began to fall in line with RUNE’s depreciating value.

Even with the considerable losses in USD, local involvement in THORChain’s ecosystem remained robust. RUNE-denominated TVL actually surged 93.2% quarter-over-quarter, increasing from 82.2 million to 158.8 million RUNE.

This increase highlighted a rise in user engagement and trust in the protocol’s multichain liquidity framework, despite the surrounding price volatility.

Decrease in THORChain Swap Volumes

In contrast, swap activities showed a softer trend. The average daily swap volume decreased by 24.4% quarter-over-quarter, settling at $68.8 million, reversing the previous quarter’s upward movement and continuing a downward slope from the $218.4 million daily average in early January.

An exception occurred on March 2, when THORChain recorded a remarkable $1.05 billion in swaps within a single day. This spike followed a security breach at Bybit, where attackers used the protocol to convert stolen ETH into BTC. Although this incident inflated the weekly throughput numbers, it did not significantly change the general downward trend in regular market activities.

Additionally, on-chain insights indicated a decrease in user participation, with the average daily number of users swapping dropping 14.5% quarter-over-quarter to 1,780. Nevertheless, usage remained fairly widespread across wallets and affiliates, suggesting that while overall transaction volume declined, the protocol’s infrastructure continued to accommodate a diverse range of participants.

“Ongoing engagement highlights the protocol’s essential role as a backend settlement mechanism for multichain exchanges, even amidst market fluctuations and RUNE’s price decline affecting user engagement.”