THORChain is a project consisting of a blockchain protocol for exchanging assets. It is a decentralized and autonomous protocol, fully transparent and using RUNE as its token. It is a decentralized trading platform that aims to facilitate the exchange of cryptocurrencies from various blockchains and does not give preference to any particular one.
What is the main idea?
The main idea of THORChain is that the platform allows you to receive or exchange coins from different blockchains anonymously, transparently, and with confidence. THORChain is independent and decentralized. The thought is that this project serves as a “bridge” to facilitate blockchains.
Simply put, with THORChain, users can trade assets. They can exchange one asset for another, and market prices are maintained according to the share of those assets in the set. The ecosystem uses RUNE, its native token, officially launched in early 2021 with a large community. Although it started much earlier, THORChain has been around since late 2019.
Developers and Execs
One of the THORChain project features is the anonymity of both founders and developers. It is a platform organized through Gitlab. The developers know what to create. They self-organize through Gitlab. According to their website, “figures, personalities, and founders undermine the project’s ability to be decentralized, and transparency is demonstrated in other aspects (treasury, code, research).” However, LinkedIn lists 10 employees, and ICOBench lists 12 team members and 6 additional advisors.
How Does It Work?
There are four points at work in the protocol THORChain:
Stakers or liquidity providers: They are responsible for providing liquidity in the system. To do this, they allocate several coins that are locked into a smart contract to become part of the liquidity pool (along with other users). In return, they receive a reward called a swap fee, which is a fee charged to users for exchanging digital assets for others.
Exchangers: These digital swap assets for others if the exchanged assets are on the list of available assets and the blockchain is connected to THORChain. The costs associated with the ability to swap assets are divided into two parts: the swap fee, which encourages participants to continue providing liquidity. Traders or Arbitrators: They act as balancers of the system because they buy impaired assets within certain protocols and then sell them at a high price on another platform to restore a fair market price. Node operators: They are responsible for controlling and authentic movements over the network. All nodes in the THORchain network are anonymous, and only their IP address and public key can be identified.
What Is Rune Crypto?
RUNE is a native THOR token and is responsible for maintaining the ecosystem as it provides the required economic incentives to protect the network. In addition, all liquidity in the system is tied to RUNE. Also, THORchain nodes must meet participation criteria by contributing a certain amount of RUNE. THORChain RUNE is also used to pay fees for transactions in the network and participate in the management of THORChain.
How Does Thorchain Work?
TSS
TSS is a cryptographic protocol for distributed key generation and signing. A threshold signature scheme (TSS) controls storage transactions in each integrated blockchain. In other words, a user can create a signature that is distributed to, say, three users, with each user receiving a portion of the signature’s private key.
A significant number of users (e.g., 2 out of 3) must be present for each transaction, designed to prevent funds from being stolen by internal or external users. This makes the whole process of signing transactions cheaper and more secure.
Nodes and Tendermint BFT
The foundation of the ThorChain protocol is a network of nodes built using Tendermint and the Cosmos SDK. Because of this, THORchain was able to create a separate blockchain with its own consensus and secure network. It also uses the Tendermint BFT model, which facilitates network consensus even if a third of the nodes start to fail. Another important point is the consensus mechanism, as THORchain nodes must work together to register transactions from other blockchains.
Where to Buy Thorchain?
It is known where to buy RUNE crypto. It is available for purchase on many crypto platforms like Guarda. First, you need the app or access it through a browser to buy the token. After that, create an account on the platform, and write down your password. Then, download and store the backup sent to you; since Guarda is a non-custodial wallet, you are responsible for your keys and funds. Finally, you are ready to start exchanging and buying the RUNE tokens.
How to Earn a Rune Token?
RuneVault
RUNE users can access the RUNEVault feature, THORChain Staking, which allows them to store and place tokens with a return on investment. Using Binance’s chain feature, users can “freeze” their tokens even if they have staked them, meaning the coin is always in the wallet. Winnings are based on weekly RUNE stakes, but that weekly amount is reset if you withdraw any amount.
Rewards
THORChain offers rewards to all network members, paid by distributing the system’s income. This is decided by a trading commission and a block award. Users pay a trading commission when they trade assets, and block awards are set according to the issuance schedule.
Conclusion
As has become clear from this analysis, THORChain is an ambitious and promising project. THORChain is endowed with enormous potential of its own. Still, the company has yet to complete the development of its core products and gain distribution to users to fully realize its vision. In the long run, the project promises to take a significant share of the market that currently belongs to decentralized and centralized exchanges. The more users interact with THORChain and the more assets they add, the higher the overall liquidity of the platform becomes. Given that THORChain is not tied to a single blockchain, it has the potential to expand to hundreds or even thousands of chains.
