What is THORChain (RUNE)?

What is THORChain (RUNE)?

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THORChain is a decentralized liquidity blockchain-based protocol that enables users to effortlessly swap cryptocurrency assets across many networks without relinquishing complete control of their holdings.

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Users may easily exchange one asset for another in a permissionless environment without relying on order books for liquidity.

Rather than that, market values are determined by the ratio of assets in the overall liquidity pool.

RUNE is the THORChain platform's native utility token. This serves as the ecosystem's basic currency, and it can also be used to govern the platform and security as part of THORChain's Sybil resistance features.

All THORChain nodes are required to commit a minimum of 1 million RUNE to participate in the rotating consensus process.

THORChain was financed through an initial DEX offering (IDO) that opened in July 2019 on the Binance DEX. Although the mainnet was initially expected to start in January 2022, a multi-chain upgrade was planned for 2022. 

 

Component THORChain (RUNE)
Technologies Bifröst Signer Module, TSS protocol, Cosmos SDK, Tendermint consensus mechanism
Market Capitalization $2.4 Billion+
Open-Source Yes
Consensus Mechanism Tendermint consensus mechanism, BFT Proof of Stake
Smart Contracts Yes
Founders/Authors Gitlab
Launch Date 2021
Circulating Supply of Coins 330,688,061 RUNE
Maximum Coin Supply 500,000,000 RUNE
Mining-based Coin? No
Is THORChain a Stablecoin? No
Does THORChain have a burn rate? No
Does THORChain have a Whitepaper? Yes, the white paper can be viewed here

 

Evolution and Development of THORChain

THORChain was developed by a mostly unidentified group of individuals. Conceived during a hackathon in 2018, the protocol's multi-chain “chaosnet” was introduced in April 2022 after early development on a few testnets.

It is worth noting that this has generated some controversy among the DeFi community. Certain users are turned away due to a lack of information about themselves.

However, there is a visible community of network developers on Github, where they collaborate as a self-organized team of engineers and voters.

The team's and community's larger objective is to develop decentralized liquidity to remove the need for centralized parties who may and have denied people access to financial goods or services for a variety of reasons.

 

What makes THORChain unique?

THORChain is not simply a protocol; it also incorporates a suite of technologies that enable it to handle a variety of difficulties in the DeFi sector.

It uses automated market maker (AMM) technology. It allows users to transfer assets automatically and without authorisation.

Rather than relying on the order book, the system uses CLPs to provide liquidity. Second, THORChain is a Tendermint network. Developers can create bespoke blockchains and DApps using Tendermint's replication-based application development platform.

THORChain also uses the Byzantine Fault Tolerance consensus mechanism. The Byzantine scenario forces a system to rely on its actors to react to a sequence of failures or attacks.

To avoid Sybil attacks, THORChain utilizes a PoS method. The protocol's basic asset, RUNE, is bound by a system of validators.

Validators stake their tokens to validate transactions and run network nodes. The ecosystem's pillars are nodes—a vital component of network functioning.

Nodes serve as a vault, create blocks, and bind RUNE cash. Every three days, a new node is created, and the amount of capital bonded determines the winner (other validators).

To keep the network alive, younger nodes replace older ones. Notably, malevolent actor behaviour may cause nodes to shut down automatically.

What are the main uses for THORChain?

THORChain facilitates trading by adapting another DEX's lending mechanism, Bancor's continuous lending pools. During these trades, all crypto assets are deposited in THORChain’s native coin, RUNE, and one other asset – ETH.

All transactions use RUNE as a native cryptocurrency and a swap. When users trade one crypto for another, the initial crypto is traded for RUNE, while RUNE is traded for another. So far, the system has functioned as planned, propelling RUNE into the top 10 DeFi tokens by market value by June 2022.

Initially, THORChain only supported Bitcoin, Ethereum, Bitcoin Cash, Binance Smart Chain, and Litecoin assets. However, other tokens and assets are constantly being introduced.

The RUNE tokens have the following features:

  • Security. Validators must stake RUNE tokens to keep the network safe. To become one of the 100 validators, nodes bond a predetermined amount of RUNE, also known as locking their RUNE. The more RUNE locked, the better possibility of becoming a validator. In addition, it ensures Sybil resistance by encouraging the people to lock their RUNEs. Nodes also get two-thirds of the network's profits. Therefore, bad actors want to offer liquidity to the system.
  • Liquidity. RUNEs are BEP2 liquidity pool coins. Every asset is 1:1 bound to RUNE.
  • Reward. RUNE is an incentive for liquidity suppliers and validators. The protocol rewards good behaviour with RUNE and punishes poor behaviour with RUNE.
  • Local network governance. THORChain, like other decentralized DeFi networks, has a RUNE-based community governance structure. Tokens let providers and validators vote.

What is the future potential for THORChain?

The developers of THORChain think that their protocol for cross-chain exchanges is just the start of what it can do. They want to create a system for all DeFi, which will allow for borrowing, lending, and even the creation of synthetics across several blockchains.

More wallet support will be added soon, the main website will be updated, pools for other cryptocurrencies like Dogecoin, Zcash, and Monero will be added, and security measures will be removed from the network, transforming the chaosnet into the main network.

Price analysis on THORChain

THORChain was initially launched in 2022, and its price analysis over the past few months are as follows:

 

  August September October November December to date
RUNE Price High $11.46 $11.68 $14.8 $14.04 $10.83
RUNE Price Low $5.99 $6.54 $7.25 $9.8 $6.05
Market Cap $2.56B $2.62B $3.81B $4.26B $2.80B

 

Price prediction on THORChain

THORChain is expected to trade at an average price of $16.60 in 2022, $24.76 in 2023, $37.04 in 2024, and $55.41 in 2025, according to cryptocurrency experts' predictions.

In five years, the average price could increase up to $78.20, rising to $109.30 in the following year, and $157.28 in 2028, according to the projection.

Which wallets are the best option for storing THORChain?

Wallets are a safe method of keeping crypto coins that are not linked to an exchange account. Exchanges are very secure if users just hold a modest quantity of cryptocurrency.

If users have a bigger holding, a digital wallet provides users with far greater control and security over it. They are available online or offline, depending on the level of security desired.

Some of the best wallet options for RUNE are:

  1. Freewallet
  2. StrongCoin
  3. Ledger
  4. Trust Wallet
  5. Coinbase Wallet

1. Freewallet: Freewallet is a web-based cryptocurrency wallet that enables users to view their cryptocurrency holdings through a web browser or a specialized mobile application. It supports over 100 different cryptocurrencies and has an integrated exchange.

2. StrongCoin: StrongCoin is another online wallet that enables users to access their currencies online but encrypts their private key before storing it on a server.

Additionally, consumers are given an offline paper backup of their keys for added protection.

3. Ledger: When it comes to safeguarding digital assets, the Ledger wallet is one of the finest physical options in the crypto market.

The Ledger hardware wallet, unlike software, is completely disconnected from the internet, making it the most secure method of storing digital assets.

4. Trust Wallet: Trust Wallet is a mobile software wallet that makes it possible for users to transact at any time and from any location. Staking several assets in the wallet is also possible on the Trust Wallet platform.

5. Coinbase Wallet: Coinbase is one of the most prominent crypto exchanges in the market, and it offers its native wallet for use. With the Coinbase wallet, users can store their digital assets, including NFTs, explore the decentralized web, protect assets, and more.

Where can you buy THORChain?

THORChain (RUNE) can be bought, sold, and traded from the following crypto exchanges.

  1. KuCoin
  2. Bybit
  3. FTX Exchange
  4. CoinTiger
  5. Binance

 

1. KuCoin: KuCoin, founded in 2017 in Hong Kong, is a worldwide cryptocurrency exchange that trades a wide variety of digital assets and cryptocurrencies. The Exchange accepts traders from all around the globe who live in countries that enable online trading with foreign exchanges.

 

PROS CONS
The trading and withdrawal fees are very low There are no fiat trading pairs offered
The exchange allows for anonymous trading Users cannot use bank deposits to transfer funds
The platform is extremely user-friendly The exchange can be complex for complete beginners
There is a range of alternative coins that can be traded  
There is 24/7 customer support offered  

 

2. Bybit: Bybit is a cryptocurrency trading platform that specializes in margin trading with leverage up to 1:100 on BTC/USD and ETH/USD trading pairings.

Bybit was launched in March 2018 in Singapore and is made up of specialists from investment banks, technology companies, the forex sector, and early blockchain users. It is a British Virgin Islands-registered trading exchange with approximately 2 million customers.

 

PROS CONS
Bybit offers derivatives and spot trading Only offers crypto withdrawals
There is margin trading with leverage up to 1:100 United States clients are not accepted
There is an innovative iOS and Android mobile app
There is a fiat gateway that allows for easy deposits

 

3. FTX Exchange: Whether users are new to cryptocurrency trading or seasoned trader, FTX is an excellent choice for a cryptocurrency exchange. They have done a good job establishing a platform for sophisticated trading, offering a diverse variety of financial markets, including futures, foreign exchange, volatility products, and leveraged tokens.

 

PROS CONS
Offers an innovative proprietary trading platform that can be sued Unregulated
There are advanced trading tools offered There is a limited selection of non-crypto assets
There are several crypto assets that can be exchanged United States clients are not accepted
The platform offers educational materials

 

4. CoinTiger: CoinTiger is a cryptocurrency trading platform that includes a TradingView online interface for simple trading, a sophisticated version for expert traders, and a conversion exchanger.

The mobile application for iOS and Android includes all features and services. CoinTiger is also a business incubator for blockchain-based enterprises that provide cryptocurrency-based financing. Users provide loans with a fixed or variable interest rate as part of an investment program.

 

PROS CONS
The exchange offers several digital currencies that can be traded There is no telephonic support given
There are convenient and innovative trading terminals offered There is no affiliate program
There is a converter offered for crypto and fiat funds
Users can make direct investments on the platform
There is no minimum deposit amount required

 

5. Binance: Binance is a cryptocurrency trading platform that offers the purchase, sale, and exchange of a range of crypto assets. Additionally, the exchange offers support services that allow users to earn interest and make cryptocurrency transactions.

 

PROS CONS
Binance is a reputable exchange  Account verification can be tedious
There are low instant and non-instant purchase fees The exchange is not available to United States clients
There is a large selection of digital assets
There are several additional services offered  

You can buy THORChain safely from these cryptocurrency platforms.

What is THORChain’s largest Competitor?

The largest competitor of THORChain is Symbiosis Finance.

Symbiosis Finance is an incredibly clever use of blockchain technology.

As the first protocol that completed a native-to-native token swap on a single platform. In contrast to THORChain and other mutually exclusive rivals, Symbiosis interfaces with blockchains while complimenting and integrating with established DEX as well as AMM protocols. The Symbiosis Protocol's Core Features Include the Following:

  • Automatic Market Maker Engine for Cross-chain
  • User Experience that is both universal and intuitive
  • The ability to create DApps that span across many chains
  • Using Software Development Kits, applications can communicate seamlessly.
  • Routing can occur across chains
  • Cross-chain transactions can be carried out with a single click (Metarouting)

 

When it comes to simplicity of use, one of the most noticeable features of Symbiosis is the front end, which has a basic interface comparable to Uniswap.

Symbiosis enables the exchanging of native tokens by using pre-existing liquidity pools on any blockchain connected to the network.

Symbiosis delivers the best rates for swaps between token pairs by targeting as many token pairings as possible across chains. The cross-chain liquidity engine consists of a collection of smart contracts that are deployed across all Symbiosis-enabled chains.

Symbiosis supports cross-chain token swaps by using concentrated cross-chain liquidity pools and off-chain routing techniques. By leveraging AMM liquidity across all chains, Symbiosis enables cross-chain token swaps while simultaneously ensuring minimum slippage.

 

What is the Staking Process involved with THORChain?

THORChain is a proof-of-stake blockchain, which implies node operators protect and maintain it for RUNE. Nodes are machines that reward swaps and generate asset pools.

Nodes originally have 100 validator positions, but the network may extend to 300. In addition to assuring network competitiveness, anonymity and security, churning ensures that nodes cannot “capture” (control) the system.

To be a validator, nodes must commit at least 1 million RUNE. Malicious nodes stand to lose their bonded RUNE while well-behaved nodes gain a share of the protocol's revenue.

In the case of theft or hack, the bonded RUNE reimburses the validators. THORChain, like other DEXs, utilizes an AMM mechanism to set prices.

Traders keep prices reflective of external pricing, such as those on other exchanges. These traders utilize arbitrage, which means they acquire assets at low prices and sell them at high ones, forcing prices to converge.

Providers of liquidity deposit RUNE and one other asset to a liquidity pool. They get a cut of the trading charge plus RUNE incentives for supplying traders with liquidity.

 

What can THORChain smart contracts do?

THORChain uses smart contracts in the following manner:

Circulating tokens in the THORChain network are held in smart contracts. Once the tranches are full or the development team meets the set goals, all tokens are freed from smart contracts.

At the start, the whole quantity of Rune was minted and promptly deposited in smart contracts for distribution. When Ether is given, the smart contracts distribute Rune according to the quantity of Ether received.

 

Is THORChain a Good Investment?

Yes, THORChain is a good investment.

The set of cross-chain exchange protocols developed by THORChain is just a piece of what the company is producing. It intends to develop a system that will cover all elements of DeFi, borrowing, lending, and synthetics over several blockchains.

Support is pending for Dogecoin (DOGE), Zcash (ZEC), and Monero (XMR) coins soon. Additionally, THORChain's treasury is sufficiently funded to ensure the protocol's long-term existence.

Once the main net is operational in the first quarter of 2022, demand for tokens should grow, resulting in profits for RUNE holders.

 

What is the supply and distribution of THORChain?

There are now 330 688 061 RUNE coins in circulation, with a maximum supply of 500 000 000.

THORChain was first released as an initial coin offering (IEO) on the Binance DEX. Twenty million RUNE were auctioned as part of the IEO. Previously, a total of 130 million RUNE has been sold through previous investment rounds.

According to the official Binance DEX proposal, 10% of the entire supply (50 million tokens) was reserved for the team and frozen until the mainnet's debut — after which it would be unlocked at a rate of 20% per month.

THORChain's emission curve presently begins at 30% APR. After 10 years, this is expected to achieve an APR of 2%.

 

Is THORChain a viable Alternative Coin?

Yes, THORChain is a good Alternative Coin.

  • Security – THORChain employs robust security measures to ensure that its blockchain remains secure.
  • Technology – THORChain uses innovative technologies, including ifröst Signer Module, TSS protocol, Cosmos SDK, Tendermint consensus mechanism, and more.
  • Potential Investment – Because of its unique technology, THORChain has potential as an investment.
  • Future Uses – There are many real-world applications for THORChain, especially with the widespread adoption of blockchain technology.

Any cryptocurrency that isn't Bitcoin is referred to as an altcoin.

What are the differences between THORChain and Bitcoin?

Bitcoin is digital and decentralized, allowing for more control of money and reduced costs. It is cheaper, safer, and unchangeable. However, bitcoin has owners, not banks. THORChain is a decentralized liquidity mechanism.

THORChain lets users seamlessly swap digital assets across network regions. This is done without consumers losing possession of assets.

 

  Bitcoin THORChain
Price change 20/21 +400% +350%
Market Cap $800 Billion+ $2.4 Billion+
Past Hacks None $8 million hack in 2022
Popularity Very High Low
Altcoin Rank #1 – Original Crypto #62

 

What are the differences between THORChain and Ethereum?

Ethereum is the largest alternative coin and a programmable blockchain on which DApps and projects can be created and launched. THORChain was not created and launched on Ethereum but Cosmos, one of Ethereum's many rivals.

While Ethereum is minable and uses an Ethash algorithm, THORChain uses an adapted proof of stake. Ethereum is more popular than THORChain, and it has been around for much longer.

Ethereum has a higher market capitalization and 24-hour trading volume than THORChain.

 

  Ethereum THORChain
Price change 20/21 +880% +350%
Market Cap $460 Billion+ $2.4 Billion+
Past Hacks None $8 million hack in 2022
Popularity Very High Low
Altcoin Rank #2 #62

 

What are the differences between THORChain and Dogecoin?

Dogecoin, the Internet's beloved meme coin, which was created in 2013 as a joke during the Bitcoin hype, has made quite the name for itself as an Internet currency used to tip content creators on various social platforms.

Dogecoin is a Proof of Work and mining-based coin that uses the Scrypt algorithm, which makes it minable by any machine, not just specialized ASIC mining rigs.

Dogecoin is a medium of exchange. While THORChain is used, the immutability of Bitcoin is extended from the money layer to the trading layer through THORChain.

 

  Dogecoin THORChain
Price change 20/21 +7,300% +350%
Market Cap $22 Billion+ $2.4 Billion+
Past Hacks None $8 million hack in 2022
Popularity High Low
Altcoin Rank #12 #62

 

What are the differences between THORChain and NFTs?

Nonfungible tokens (NFTs) are digital assets that each have a unique value, with no two NFTs holding the same characteristics or value as another. THORChain, on the other hand, is fungible, which means that one RUNE has the same value and characteristics as another RUNE.

 

What is a Proof of Bond Network?

Network bonding can be explained as the process where two or more network interfaces are combined. Network bonding improves performance and redundancy by doubling network bandwidth.

The other interface will operate if one is down. It may be used for fault tolerance, redundancy, and load balancing networks.

Two or more network interfaces may be logically “bonded.” The behaviour of bonded interfaces is determined by the bonding process.

In THORChain, bonding refers to nodes that bond 1 million RUNE to become a node in the network. This amount is held on every node to ensure that the nodes behave well and in the best interest of the node.

If nodes do not behave, their held funds can be subject to slashing, which means that users can lose their funds. When nodes behave well, they will receive RUNE as a reward, with revenue generated with every block.

 

What is “Ragnarök” in THORChain?

Ragnarök is an emergency change implemented in THORChain. It dictates that if the number of nodes in the network is fewer than 4, funds are paid out, and the system is shut down.

 

What are nodes?

Nodes are computers that are connected to a specific crypto network. These participants carry out certain functions, including receiving, sending, and even creating information.

 

How does THORChain use nodes?

A “node” is a decentralized digital ledger that records all bitcoin transactions and makes them accessible to anybody with a connected device.

Every transaction must be logged historically and disseminated to a network of linked devices. Nodes are these gadgets. These nodes exchange transaction data and new blocks throughout the network.

It is vital to the blockchain's infrastructure. It helps ensure network security and integrity. A blockchain node verifies each block of network transactions.

Each node has a unique identification. THORNodes support the THORChain network, which will initially include 99 nodes. THORNodes are clusters of separate servers. All THORNodes work together to establish a cross-chain swapping network.

To operate a node, users require a lot of Rune, presently 1 million. For each node to act in the network's best interest, this Rune is broadcast into the network as a “bond.” Using a malicious or unstable node reduces this relationship.