TL;DR:
- THORChain now directs 20% of System Income to Protocol-Owned Liquidity while cutting the RUNE burn from 5% to 1% under its revised distribution model.
- POL deploys protocol-owned RUNE into eligible pools, prioritizing markets where deeper liquidity can improve swap execution, support volume and generate more network income.
- The change reduces permanent token destruction but keeps more RUNE working inside THORChain, shifting its economics toward liquidity growth and long-term trading infrastructure.
THORChain has changed how System Income is distributed, directing 20% of network revenue into Protocol-Owned Liquidity while reducing the RUNE burn from 5% to 1%. In its official breakdown, the protocol said the new allocation gives POL a larger role in its economic model. The shift moves value away from permanent token destruction and toward liquidity that THORChain itself owns and can deploy across its pools. Under the revised split, 59% goes to Nodes, 20% to POL, 10% to TCY, 5% to the Developer Fund, 5% to the Marketing Fund and 1% to the RUNE burn.
THORChain Prioritizes Productive Liquidity Over Token Burns
Protocol-Owned Liquidity allows THORChain to convert part of its swap-generated income into RUNE that can be deployed into eligible liquidity pools. Every three days, the network reassesses pools based on fee generation relative to liquidity depth and directs new POL toward the highest-scoring market. The goal is to deepen liquidity where it can improve execution most, creating a flywheel between stronger pools, more swap volume and additional System Income. The mechanism builds on the POL framework introduced through v3.20, when governance controls for allocations and eligible assets became operational.
The lower burn changes how THORChain treats RUNE generated through network activity. Rather than destroying 5% of System Income, the protocol now burns only 1%, freeing more revenue for liquidity deployment. THORChain is effectively choosing productive use of RUNE over a larger deflationary mechanism, while still reducing liquid market supply because tokens assigned to POL are placed inside protocol-controlled pools. That means RUNE is no longer removed permanently at the same pace, but a larger share is locked into infrastructure intended to support trading depth and future network activity.
The adjustment gives POL a structural role in THORChain’s long-term economics rather than treating it as a secondary experiment. Deeper pools can reduce price impact on larger swaps, improve execution quality and expand the network’s capacity to absorb additional volume. The new distribution ties THORChain’s revenue more directly to the liquidity needed to generate future revenue. That approach was already visible in the network’s August activity, when POL began accumulating protocol-controlled positions. The trade-off is clear: less RUNE is permanently burned, but more network income is recycled into liquidity that could strengthen THORChain’s trading infrastructure over time at scale.
