What is THORChain (RUNE)?
THORChain is a multi-currency protocol with cross-chain architecture that allows users to exchange tokens from various networks, including Bitcoin and Ethereum, with other tokens that don’t belong to the same network.
Cryptocurrency traders and investors rely on decentralized exchanges for swapping their cryptos, for instance, swapping between Bitcoin and Ethereum, while native networks can’t enable this operation. THORChain resolves this issue by creating an interoperable environment that allows users to directly exchange different cryptos without ever leaving the protocol and without the need for intermediaries.
The main goal of the project is to bring more liquidity to all supported cryptocurrencies as opposed to illiquid and fragmented markets of buyers and sellers who would like to exchange different cryptos without central authorities.
THORChain also enables users to earn a yield via the THORChain decentralized exchange by depositing cryptos into liquidity pools. Within this system, users can borrow cryptocurrency in minutes.
How Does THORChain Work?
To enable cross-chain exchanging of non-native tokens, THORChain adapts a protocol that the Bancor DEX uses calleds continuous lending pools. All supported cryptocurrencies that are not native to the network are deposited into liquidity pools together with the native token RUNE.
When a user initiates a trade, i.e. an exchange between two non-native assets, the system automatically exchanges one token for RUNE, then exchanges RUNE for the other token. Essentially, double swapping with instant execution is what enables non-custodial exchanges on the THORChain protocol.
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At the same time, users can deposit their funds into liquidity pools for other users to borrow, thereby earning a yield based on the amount they deposit. Liquidity pools are created by operative nodes. Nodes are also in charge of validating swaps for which they are incentivized. The THORChain protocol relies on the Proof of Stake consensus mechanism, which requires the staking of native RUNE tokens.
There are 100 to 300 validator spots, with Nodes needing to bond at least 1 million RUNE to earn a validator spot. Nodes are hosted on an added layer with extra security to facilitate control over the network.
Who Are the Founders of THORChain? (History of THORChain)
THORChain was founded and created by an anonymous team to maintain the decentralized nature of the entire protocol, so there is no foundation, official dev team, or CEO. The creator of the project is also anonymous. All dev team activity takes place on GitHub where new updates and upgrades are uploaded.
The team works for the Nodes by uploading code that makes the network more functional and the system more valuable, and the rest is left to the network participants. In this system, the dev team tends to Nodes, Nodes rely on Stakers and work for them based on the staked RUNE, and Stakers bring funds to the THORChain exchange market. Swappers pay for exchanges and borrowed amounts, which keeps the economy of the protocol alive.
What Makes THORChain Unique?
THORChain makes a unique project thanks to its effective approach to liquidity. The system uses a fee that prevents slippage and lowers the chances of losing liquidity while neutralizing the risk of impermanent loss. Another element that makes THORChain unique is the user-friendly interface that is driven by a complex combination of innovative technologies that enable frictionless exchanging of cryptos.
THORChain is a non-profit organization and its anonymous team doesn’t keep any of the RUNE funds used for fees on the protocol but instead distributes all RUNE spent on fees to network participants. THORChain also enables users to exchange tokens from top platforms like Ethereum, Bitcoin, Binance Smart Chain, Litecoin, and others near-instantly.
What Gives THORChain Value?
THORChain’s intrinsic value is based on its technical elements, technology, technical capacity, and utility. These qualities are what attract cryptocurrency users to the THORChain network. Relevant updates, upgrades, and roadmap developments also contribute to the value of THORChain as a project. For instance, the launch of the THORChain mainnet in April 2021 was a relevant roadmap update that adds more value to the project.
The intrinsic value of THROChain may not match the market price, mostly due to volatility. The price of RUNE is subject to trend reversals and at times unpredictable spikes and dips, which means that RUNE price may rise and dip within a brief timeframe.
How Many THORChain (RUNE) Coins Are There in Circulation?
There are currently RUNE in circulation out of a total of RUNE. The token has a limited supply, much like Bitcoin and many other cryptocurrencies. The finite supply means that there should be no new RUNE tokens created once the supply is exhausted. The limited supply acts as an anti-inflation mechanism and so could potentially make RUNE a good long-term store of value.
The number of RUNE coins in circulation multiplied by the current price of THORChain in the market equals the market cap. The market cap ranks RUNE in comparison with other cryptocurrencies and also defines its market dominance.
Other Technical Data
RUNE is the native token of the THORChain network. It represents a multi-purpose universal token that supports all functions on the THORChain network and helps run the protocol. RUNE is used in governance, for staking, bonding for validator Nodes, and trading. The token is also used as an incentive in the system to reward Node operators and stakers who deposit their funds to liquidity pools.
For operations to be validated on the network, two-thirds of validator Nodes need to agree to secure the cross-chain bridge that supports the exchange of non-native assets. To ensure that the system of validation works securely, THORChain uses Tendermint, which is a novel type of Byzantine Fault Tolerant protocol.
How is the THORChain Network Secured?
The THORChain network is secured through the Proof of Stake protocol and Tendermint, a form of BFT. The network is built on the Cosmos SDK, which runs on Tendermint. By ensuring the validity of Nodes and all operations on the network, Tendermint secures the cross-chain bridges.
The security of the network is ensured through the use of an innovative BFT Proof of Stake mechanism which oversees at least 100 Nodes that act as validators for network transactions and operations with instant finality. The system also monitors Nodes’ activities and tracks malicious Nodes which are penalized in the case of malicious activities, while other Nodes are rewarded.
How to Use THORChain
You can use the THORChain network as a DeFi bridge to exchange cryptocurrencies like ETH, BTC, LTC, cryptos from Binance Smart Chain, and more. Users can also access THORChain to stake RUNE and deposit cryptos into liquidity pools. They can lend and borrow cryptocurrency funds on the network, making THORChain a rather handy DeFi protocol that offers frictionless exchanges with solid liquidity.
RUNE can be staked, used for bonding Nodes to act as validators, and can also be used for exchanging non-native cryptos in an instant double-swap system. RUNE is rewarded to stakers who can earn a yield based on their funds, as well as being used as an incentive for rewarding validator Nodes.
How to Choose a THORChain Wallet?
RUNE is available on multiple blockchains, including Binance Chain and Ethereum, and so could be stored in wallets that support BEP-2 or ERC-20 tokens. The type of wallet you choose will likely depend on how much you need to store and what you intend to do with it.
Hardware wallets or cold wallets like Ledger or Trezor provide the most secure option for storing cryptocurrencies with offline storage and backup. However, they can require more technical knowledge and are a more expensive option. As such, they may be better suited to storing larger amounts of RUNE for more experienced users.
Software wallets provide another option and are free and easy to use. They are available to download as smartphone or desktop apps and can be custodial or non-custodial. With custodial wallets, the private keys are managed and backed up on your behalf by the service provider. Non-custodial wallets make use of secure elements on your device to store the private keys. While convenient, they are seen as less secure than hardware wallets and may be better suited to smaller amounts of RUNE or more novice users.
Online wallets or web wallets are also free and easy to use, and accessible from multiple devices using a web browser. They are, however, considered hot wallets and can be less secure than hardware or software alternatives. As you are likely trusting the platform to manage your RUNE, you should select a reputable service with a track record in security and custody. As such, they are most suited for holding smaller amounts of cryptocurrencies or for those making more frequent trades.
Kriptomat offers a secure storage solution, allowing you to both store and trade your RUNE tokens without hassle. Storing your RUNE with Kriptomat provides you with enterprise-grade security and user-friendly functionality.
Buying and selling RUNE, or trading it for any other cryptocurrency, is done in mere moments when you choose our secure platform as your storage solution.
THORChain Proof of Stake
THORChain uses an innovative combination of a Byzantine Fault Tolerant protocol, Tendermint, and Proof of Stake.
You can’t mine RUNE, but you can stake the native token in liquidity pools on the protocol and earn a yield on the deposited funds. Proof of Stake has proved to be a more efficient and cost-effective protocol, which enables instant finality and mitigates network congestion.
THORChain facilitates liquidity for traders and offers instant finality for all operations on the network, while reducing the risk of impermanent loss. Users can easily exchange some of the top cryptocurrencies from different networks in a decentralized environment with a user-friendly interface.
THORChain enables a frictionless experience for cryptocurrency users as it offers non-custodial exchange services with a growing range of supported cryptocurrencies. With such technical capacity and innovative technology, THORChain could find a place as one of the leading DeFi projects.
Join the crypto revolution and start your THORChain journey today!
How does THORChain set prices?
Instead of using oracles or weighted averages, THORChain depends on arbitrageurs and its continuous liquidity pool design. If a pool becomes imbalanced, it is rebalanced by the trading of arbitrage bots.
What is the benefit of being a liquidity provider on THORChain?
Liquidity providers can deposit any amount into existing pools (or propose new pools) to receive a combination of swap fees and rewards from THORChain’s own emissions. The size of the yield earned depends on the proportion of the pool the LP owns, swap volume, size of swaps, change in asset prices, and the Incentive Pendulum, which balances the amounts of capital bonded and pooled in the network by adjusting the amounts of rewards for node operators and liquidity providers.
How to buy THORChain?
Buying RUNE is as easy as visiting Kriptomat’s how to buy THORChain page and choosing your preferred method of payment.
How to sell THORChain?
If you already own RUNE and hold it in a Kriptomat exchange wallet, you can easily sell it by navigating the interface and choosing your desired payment option.
THORChain price is in constant flux and is subject to frequent changes in the market that are mostly driven by volatility. Much like any other cryptocurrency that doesn’t have a stable value, RUNE price can change dramatically, while being affected by a great number of specific factors. You can follow up with live THORChain prices on Kriptomat.
As well as traditional factors such as market sentiment, the flow of assets on exchanges, and the economy in general, RUNE price is also influenced by the amount of tokens locked into the THORChain network and demand from DEX users.
The current THORChain price is EUR.
The 24-hour trading volume of THORChain is EUR. RUNE is currently ranked of all cryptocurrencies by total market capitalization, with a market cap of EUR. It has a circulating supply of RUNE and a max supply of RUNE.
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