THORChain is a DeFi protocol that makes it easy to create pools of liquidity between chains without pegged or wrapped tokens. Thus, THORChain seeks to create a liquidity market for digital assets that will be traded without trust, authorization, and storage.
What is THORChain?
THORChain is the new DeFi liquidity protocol based on Tendermint and Cosmos-SDK, not Ethereum like most DeFi protocols.
THORChain is unique as it provides a decentralized network of liquidity between chains that allows users to instantly exchange assets at tamper-resistant market prices. It provides a decentralized marketplace for trading digital assets and is designed to remain chain-independent without prioritizing a specific asset or blockchain.
Like other DeFi protocols, the THORChain network receives liquidity from members who earn token exchange fees by converting their unoccupied cryptoassets into passive assets that generate non-custody income.
Key features of THORChain:
Cross-chain asset exchange
The THORChain decentralized liquidity network allows users to switch between any connected assets, right from your wallet. The exchange of tokens is done immediately for a small and transparent fee.
THORChain users can stake their idle cryptoassets to increase liquidity and earn commissions. THORChain’s liquidity is always in-chain and never “tied” or “wrapped”.
THORChain users can launch nodes to earn 2/3 of the system’s revenue for their role in supporting it. Nodes are refreshed every 3 days to ensure survivability, reliability and prevent capture.
Who created THORChain and when?
THORChain was created by an anonymous team of developers and entrepreneurs who believe that public figures, individuals and founders undermine a project’s ability to decentralize.
However, the anonymous founders of THORChain began active development on the project in June 2018, launching their first testnet in Q4 2018. After the testnet, the team was actively engaged in research and development for several months before launching the first bridge in Q2 2019 and the mainnet in Q1 2020.
As for THORChain’s own cryptocurrency, RUNE, the token was launched on Binance Chain in June 2019 with a circulation of 500,000,000 RUNE tokens. Along with the launch of RUNE, the token was listed on Binance DEX and distributed free of charge to users who participated in a number of events that rewarded them with tokens.
As of 28 July 2020, THORChain has a supply of 158,432,088 RUNE, and tokens will be continuously distributed among THORChain stakers, node operators and community members for various tasks and activities over the next 5 years.
What is the RUNE token used for?
The THORChain RUNE token is essential for the entire THORChain ecosystem. The RUNE token performs many security and cryptoeconomic functions, from token rewards to network security.
Examples of using the RUNE token:
- Staking validators;
- RUNE transaction fees;
- Liquidity support
- Block rewards;
- Launch of new TokenChains
Validator nodes protect the THORChain network by placing (blocking) RUNE tokens for a specified period of time to prevent nothing-at-stake attacks. These validators must RUNE to be part of the validator sets and receive RUNE rewards for network security.
Transaction fees are paid in RUNE
All transaction fees (gas) of the THORChain network are paid in RUNE. These fees can include transaction fees, trade fees, bridge fees, and liquidity fees.
Liquidity is always supported by RUNE based on: value in continuous pools. In this way, RUNE functions as the settlement currency of the ecosystem.
Block rewards for Level 1 Validator Nodes and Level 2 Liquidity Nodes are paid in RUNE.
RUNE is required to launch new TokenChains
RUNE is the main token in THORChain, other TokenChains will be created to trade various assets at the protocol level. To create a new TokenChain, RUNE will be required to start the initial transaction and provide initial liquidity for the new asset.
Does THORChain have its own blockchain?
No, THORChain does not have its own blockchain as it currently sits on top of Binance Chain.
THORChain launched on Binance Chain as a BEP2 token to help strengthen its network, create shared tools, and enhance ecosystem benefits.
Both THORChain and Binance Chain share a common codebase powered by the Cosmos SDK with Tendermint consensus. This commonality makes them interoperable and blockchain independent with each other and others.
In addition, THORChain is creating a set of tools that will allow Cosmos-powered chains like Binance Chain or itself to connect to any other chain in a reliable and secure way.
For example, THORChain develops bridges that allow any Cosmos-based chain to synchronize, connect and maintain secure two-way value transfer bridges between blockchains, such as Bitcoin, Ethereum, Ethereum tokens (such as ERC-20 tokens), and other types of chains. such as Monero, Tezos and Facebook Libra.
However, THORChain is completely blockchain independent and is currently at the top of the Binance Chain.
What famous products do ThorChain use?
As a powerful decentralized liquidity protocol for digital assets, THORChain offers many notable DeFi products, including:
- Flash Network
- Bifröst Protocol
BEPSwap Is a DeFi Level 2 app for Binance Chain that allows any Binance Coin (BNB) or BEP2 token holder to instantly exchange BEP-2 tokens from their wallets.
In other words, BEPSwap is similar to Uniswap, but for Binance BEP-2 tokens, not ERC-20 Ethereum. In addition, in addition to being able to exchange BEP-2 tokens, BEPSwap allows users to place their assets in liquidity pools to receive trading commissions.
BEPSwap has not yet launched and will be launched after the launch of the THORChain mainnet.
Flash Network Is a Tier 2 network for instant asset exchange on THORChain. It allows instant trades across all tokens and liquidity pools and can be connected to other Tier 2 networks such as Lightning, Raiden and Bolt to facilitate instant exchange of any connected asset.
RUNEVault Is a staking product that was created and released in preparation for the launch of BEPSwap. It is a simple interface that allows RUNE holders to stake their tokens and earn more RUNE.
The RUNEVault product enables the THORChain team to observe and learn from user interaction and helps the team improve the user experience (UX) for BEPSwap and ultimately for THORChain.
Bifröst protocol Is a fast and secure internet protocol for THORChain that enables multi-chain connectivity by creating a bridge between blockchains.
The protocol aims to solve the problem of inter-blockchain interoperability so that users can seamlessly transfer assets between chains and interact with any blockchain and any asset of their choice.
What are THORChain nodes?
The THORChain nodes are responsible for running the networking software that powers the THORChain network.
For example, starting the THORChain node allows you to:
- Create repositories for assets;
- Building a blockchain with new blocks;
- Attestation of transactions on linked blockchains;
- THORChain protocol operation;
- Sign outgoing transactions.
To become a THORChain Node Operator, you need to run a high-performance IT infrastructure and have a minimum of 1 million RUNE.
Even though it is very expensive to become a THORChain node operator, they receive a decent RUNE reward for their online services. Node operators receive a so-called “bond reward” for their activity on the network, and these rewards are equal to 67% of the system’s revenue, and liquidity rewards are equal to 33%.
Moreover, even though node operators make money, they can also be punished for failing to fulfill their obligations. If the node operator is unable to complete Witness transactions, complete the storage creation, or complete sending outbound transactions, he will be punished.
Where to store the RUNE token?
THORChain (RUNE) is based on the BEP-2 token standard and sits on top of the Binance Chain blockchain. However, you can store RUNE in any wallet that supports the BEP-2 token.
Popular wallets for THORChain (RUNE):
In addition to the wallets listed above, THORChain (RUNE) can be stored in a wide variety of other wallets that support Binance Chain BEP-2 assets.