The Cross-Chain DEX That Can Automatically Adjust Trading Fees for Cost-Efficiency.
THORChain (RUNE) Fact Sheet
- THORCHain (RUNE) is essentially a decentralized exchange (DEX) that enables cross-chain token swaps through the usage of liquidity pools and works across multiple different chains.
- The multiple supported chains include Bitcoin (BTC), Ethereum (ETH), BNB Smart Chain (BSC), Dogecoin (DOGE), Litecoin (LTC), and Bitcoin Cash (BCH).
- Users are provided with the opportunity to essentially stake their digital assets within liquidity pools, through which they have enabled the ability to earn yield from trading fees and rewards in the form of RUNE tokens.
- RUNE is the native cryptocurrency that is utilized across the THORChain network and ecosystem as a whole, and users are required to ensure that their RUNE is bonded in order to operate a node and earn rewards.
SRM Historical Data Price Chart in the U.S. Dollars (USD)
What is THORChain (RUNE)?
At one point in time throughout the history of the cryptocurrency space, there was a requirement for cross-chain liquidity, as well as a reliable way through which multiple assets spread out throughout different blockchain networks could be swapped for one another, alongside an increase in the development of decentralized finance (DeFi) and products as well as services built on top of it.
THORChain is one of the largest DeFi projects out there that has managed to offer developers and users access to immutability as well as multi-chain exchanging of a variety of different cryptocurrencies without the need to wrap the tokens. In fact, its interoperability is one of its key factors and qualities that makes it stand out.
THORChain (RUNE) is essentially an independent blockchain that has been built through the utilization of what is known as the Cosmos SDK, and its main goal is to serve the role of being a cross-chain decentralized exchange (DEX).
It utilizes an automated market maker (AMM) model, and what this essentially means is that it will utilize its native cryptocurrency token, RUNE, to be the base swap pair.
This is a model that enables traders to essentially move between different asset pools by utilizing RUNE as an intermediary. However, it has the additional benefit of rewarding liquidity providers (LPs), which are those that deposit or stake their assets on either side of the liquidity pool, with a portion of the trading fees.
- A decentralized exchange (DEX) is a peer-to-peer (P2P) marketplace that is responsible for the process of connecting cryptocurrency buyers as well as sellers, and it is non-custodial, which means that the user remains in full control of their private keys whenever they make a transaction on top of it.
- The automated market maker (AMM) works by allowing digital assets to be traded without permission, and they can be traded automatically through the usage of liquidity pools instead of a traditional market that includes buyers as well as sellers.
- Liquidity providers (LPs) are those that provide liquidity within what is known as liquidity pools, after which they receive liquidity pool tokens. These tokens act to fill the role of a receipt, which allows users to claim their original stake and interest earned through doing so.
In the case of THORChain (RUNE) specifically, the automated market maker (AMM) model is utilized as a means of facilitating crypto asset swaps through an independent cryptocurrency network, which enables the exchange of assets across different blockchain networks in a way that is non-custodial.
How is THORChain (RUNE) Used?
The protocol utilized here features a cross-chain bridge system known as the Bifröst Protocol, which is responsible for connecting the different chains.
Additionally, THORChain uses an adapted version of Bancor (BNT), another similar project's smart tokens, that it recognizes as Continuous Liquidity Pools (CLPs) as a means of facilitating the exchange of assets. However, the main difference here is the fact that the CLP can reward users for contributing to the liquidity within each pool. THORCHain also features its own native cryptocurrency, known as RUNE, which owners utilize as a means of participating within the network or adding to a liquidity pool.
Use-Cases of THORChain (RUNE)
Every asset is paired with the RUNE cryptocurrency in its own liquidity pool, and as a direct result of this, RUNE is required for every swap that occurs on top of the network.
Rune is also utilized for the payment of fees, to reward the liquidity providers, to secure the THORChain network by staking RUNE, and to compensate nodes in the form of transaction fees whilst also providing governance for the THORChain protocol.
Specifically, anyone that aims to run a node on top of the THORChain network is required to bond a predefined amount of RUNE tokens according to the value of the assets in the network’s liquidity pools. This is aimed at disincentivizing node operators from essentially acting maliciously, which will also drive the demand for RUNE further.
Usability & Primary Features of THORChain (RUNE)
THORChain supports an entire ecosystem of products as well as services, all of which integrate the network's cross-chain infrastructure.
There are platforms such as THORSwap, which is the first multi-chain DEX on top of THORChain's network which utilizes it as a front-end interface and facilitates the swaps.
THORSwap also enables any user to pick which two cryptocurrencies they want to swap, after which the protocol automatically calculates the fees, which are directly based on the activity on the network.
Swaps that occur on top of THORChain are enabled by the network’s continuous liquidity pool (CLP), where RUNE gets used as an intermediary within every single swap.
When we look at THORChain (RUNE)’s overall functionality, whenever any two assets get swapped on top of THORChain, they are swapped between two pools that are completely different.
Every single liquidity pool on THORChain pairs RUNE with the available assets. The THORChain state machine swaps one asset for RUNE and then moves it to a second pool, after which it swaps RUNE for the user's required cryptocurrency, and all of this gets done without the need to convert any crypto or take custody of the RUNE cryptocurrency.
Due to its CLP model, the protocol is fully able to respond to the fluctuating demand of liquidity.
There are four main components, or in other words, roles, that need to be fulfilled by the participants of the THORChain blockchain in order for it to function.
There are Liquidity Providers (LPs), Swappers, Traders, and Node Operators. We will be diving into each one of them individually.
- Liquidity Providers (LPs) - these are responsible for providing assets to the liquidity pools, and in return for doing so, they get block rewards as well as a portion of the swap transaction fees. These rewards get calculated directly based on the pool's overall activity and the share of the LP's tokens represented within the pool.
- Swappers - These are the user-base that essentially initiate trades between a variety of different crypto assets on top of THORChain.
- Traders - another key thing that THORChain relies on is arbitrage traders that aim to gain access to assets that are undervalued or overvalued on top of THORChain when compared to their overall market prices on other exchange platforms. Arbitrageurs can rebalance liquidity pools, and this is a procedure that is done through the process of buying or selling the assets across multiple exchanges until their prices in the pool reflect the overall market price at that point in time.
- Node Operators - these are operators that bond a predefined amount of the RUNE cryptocurrency as a means of supporting the network through the procedure of participating within its Proof-of-Stake (PoS) consensus mechanism. All of these operators remain anonymous and are rotated within the network, which is based on their reliability and churning.
Churning is a process that ensures that any of the new nodes that meet the staking criteria can eventually be the next ones in line when it comes to completing the procedure of signing transactions. Every time the set of validations changes, the THORChain network moves funds to new vaults, which in turn ensures that the active nodes are still able to access the funds.
This is a process that typically occurs every 50,000 blocks or every 72 hours, where the oldest or the most unreliable nodes from the active set get replaced by those from the standby set.
Through utilizing the technology found within THORChain, developers are provided with the opportunity to develop robust solutions, such as interoperable smart contracts and multi-chain decentralized applications (dApps).
In other words, through the usage of the interoperability technology found within the network, anyone can develop robust solutions as interoperable smart contracts.
Tokenomics & Supply Distribution
There was a maximum supply of 1 billion RUNE tokens initially. However, this was later reduced to 500 million in 2019.
- 10.8% is circulating
- 10.5% is allocated to the OP Reserve.
- 10.4% is allocated to the community.
- 10% is allocated to the team.
- 5.2% is allocated as seed.
- 44.1% is allocated to the protocol.
Any remaining tokens were retained for the funding of the project going forward.
Team & History
THORChain as a project was originally created in 2018 with the main goal in mind of improving upon the flawed use-cases surrounding the centralized exchange’s way of transferring cryptocurrencies between a multitude of differentiating blockchain networks.
THORChain was founded and created by a team that is anonymous. There is no foundation, no official development team, and nobody that has the role of the Chief Executive officer for the project. Similarly to how Bitcoin was created by Satoshi Nakamoto, who is a pseudonym that we know nothing about, we do not know about the development team behind THORChain.
At the point in time when they saw the viability of the product, the team made the decision to raise a small seed round and even worked up a Proof-of-Concept of the decentralized exchange that is built on top of the protocol they created, initially called instaswap. This was later demonstrated throughout a Cosmos hackathon in Berlin.
After that point in time, they announced the first product known as BEPSwap in July of 2019, where the main goal was to enable BEP2 asset swaps and was limited to BNB Smart Chain (BSC).
They carried on work on the protocol, and this resulted in a limited mainnet release known as the multi-chain chaosnet (MCCN) in April 2021.
However, all of the development activity can be tracked, where there are consistently new updates and upgrades that are made to the project. The team works for the nodes through a procedure where they essentially upload code, which makes the network a lot more functional and the overall system a lot more valuable as a direct result of this. The rest is left to the network participant.
What we do know, however, is the fact that THORChain was created at the Binance Dexathon (decentralized exchange coding competition) in 2018.
Activities & Community
When we go over the community of THORChain, if we look at the THORChain Official Discord channel, we can see that there are a total of 12,163 members.
However, when we look at the official THORChain Telegram Group, it has over 20,737 members.
Furthermore, going over its Official THORChain Twitter page, we can see that there are over 188,700 followers that are engaging with the project.
Development Activity and GitHub Repositories
When we go over the Official THORChain Github, we can see that there are six pinned repositories.
- Resources - This includes all of the resources for the THORChain project.
- Bepswap-web-ui - the React Front-End for BEPSwap that allows users to connect Binance Chain wallets and then swap assets by using the BEPSwap pool address provided by the BEPSwap statechain.
- Thornode - software that allows a node to join and service the overall network, which will run with a minimum of four nodes.
- Asgardex-electron - ASGARDEX Electron App, which is a desktop wallet and decentralized exchange for THORChain that is 100% open-source.
When we go over the Official THORNode GitLab page, we can see that there are a total of:
- 8,053 Commits
- 551 Branches
- 105 Tags
- 31.3 GB Project Storage
- 101 Releases
When we go over the THORChain explorer, we can see that the block height is at 7,231,560, with an average RUNE price of $1.79 and 53,731 total addresses. There is a total supply of 484,849,875 RUNE ($868.49 M) and a total circulating supply that's on-chain of 3,042,033,196 RUNE ($5.45 B).
Furthermore, we can see that there are 4,511,170 Total Swap, Add, and Withdraw txs.
Going over another THORChain explorer known as Viewblock, we can see that there are a total of 12,761,479 transactions, a block height of 7,231,563, 105,632,450.31898 in the vault reserves, $462,486,135 in total value locked and 119,737.37062 in BOND rewards.
Activities and Partners
There are numerous community projects that are a part of the THORChain ecosystem, all of which are a part of its overall activities.
- THORSwap - the first multi-chain dex powered by THORChain.
- Ferz Wallet - Decentralized, non-custodial cross-chain crypto wallet powered by Thorchain protocol.
- THORYield - Yield Tracker built for THORChain
- Brokkr - Investment Platform for optimized DeFi Investing
- Lendscape - A Decentralized Lending Protocol purpose-built oon THORChain
- Skip - Permissionless cross-chain DEX powered by THORChain.
- ShapeShift - a free open source platform to trade, track, buy, and earn that has implemented trading through the integration of THORChain.
References & Reports
- THORChain Official Discord channel
- THORChain Telegram Group
- Official THORChain Twitter
- Threshold Signature Schemes (TSS)
- THORChain Docs
- THORChain official website - THE DECENTRALIZED & AUTONOMOUS CROSS-CHAIN LIQUIDITY NETWORK
- The Bifröst Protocol: Bridging Chains Safely - How THORChain’s Bifröst Protocol Bridges the Blockchain Gap - Medium
- THORChain — a solution for decentralized exchange with incentivized liquidity
- Official THORChain Github
- Binance Concludes Dexathon - Medium
- Official THORNode GitLab
- Ferz Wallet
- Lendscape -
- integration of THORChain
- Satoshi Nakamoto - Wikipedia
- Decentralized Finance (DeFi) Definition - Investopedia
- THORChain’s Liquidity Breakthrough - How THORChain Generates and Incentivises Continuous Liquidity
- THORChain launch multichain chaosnet - Medium
- Announcing BEPSwap — DeFi on Binance Chain - Instantly swap and stake BNB and other BEP2 Assets.