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What is THORChain (RUNE)?
THORChain (RUNE), is a multi-currency protocol with a cross-chain framework that enables users to trade tokens from different networks, such as Bitcoin and Ethereum, for tokens from other networks.
Decentralized exchanges are used by cryptocurrency traders and investors to swap cryptos, such as Bitcoin and Ethereum because native networks cannot support this function.
THORChain overcomes this problem by providing an interoperable atmosphere that facilitates users to directly swap multiple cryptos without having to leave the protocol or rely on intermediaries.
The project’s major purpose is to increase the liquidity of all accepted cryptocurrencies, as contrasted to illiquid and scattered marketplaces of buyers and sellers that want to trade multiple cryptocurrencies without the involvement of ruling elites.
Users can potentially earn a return by putting cryptos into liquidity pools on the THORChain decentralised exchange. Users can loan bitcoins in minutes using this mechanism.
Who are the founders of THORChain (RUNE)?
To sustain the decentralised character of the whole protocol, THORChain was formed and constructed by an anonymous team, hence there is no foundation, official development team, or CEO. The project’s creator is also unidentified. All of the dev team’s work is done on GitHub, where new updates and upgrades are posted.
The team works for the Nodes by uploading code that improves the network’s functionality and the system’s value, and the choice is up to the network’s users.
The development team looks after Nodes, Nodes depend on Stakers and work for them based on staked RUNE, and Stakers provide funds to the THORChain exchange market. Swappers pay for exchanges and borrowed funds, keeping the protocol’s economy afloat.
What makes THORChain (RUNE) unique?
Because of its novel solution to liquidity, THORChain is a one-of-a-kind project. The approach employs a charge that minimizes slippage and reduces the danger of liquidity loss while also neutralising the risk of temporary loss.
Another feature that distinguishes THORChain is its user-friendly interface, which is powered by a complex blend of revolutionary technology that allows for seamless crypto exchange.
To prevent Sybil attacks, THORChain employs a proof-of-stake (PoS) method. In a Sybil assault, the attacker subverts a network service’s reputation system by creating a large number of pseudonymous identities, which the attacker then exploits to exert disproportionately large influence.
It also employs the Byzantine Fault Tolerance (BFT) consensus mechanism, which guarantees that the network can keep operating even if some nodes cease to do so or act illegally
THORChain is a non-profit organisation, and its faceless crew does not keep any of the RUNE amount spent on protocol fees; rather, every RUNE spent on fees is distributed to network participants.
Users may also exchange tokens from prominent platforms including Ethereum, Bitcoin, Binance Smart Chain, Litecoin, and others almost instantaneously with THORChain.
How Many THORChain (RUNE) Coins?
The THORChain network’s native token is RUNE. It is a multi-purpose universal token that facilitates all THORChain network operations and aids in the protocol’s operation.
Out of a total of 500,000,000 RUNE, there are presently 296,541,793 RUNE in circulation. The token, like Bitcoin and several other cryptocurrencies, has a finite quantity. Because of the limited availability, no new RUNE tokens should be generated once the current supply has been depleted.
RUNE could be a useful long-term store of value because of its limited supply, which functions as an anti-inflationary mechanism.
The market cap is calculated by multiplying the amount of RUNE coins in circulation by the current market price of THORChain. RUNE’s market capitalization rates it against other cryptocurrencies and also determines its market dominance.
How does THORChain (RUNE) Work?
THORChain relies on Tendermint as a network. Tendermint is a platform that allows developers to bypass the fundamentals of blockchain development, such as cryptography, and instead, concentrate on high-level blockchain and app development.
Tendermint is replication software that enables developers to create unique blockchains and decentralised applications (dApps). Tendermint is a low-level protocol made up of two components: a blockchain consensus engine and a general application interface.
THORChain implements a protocol called continuous lending pools, which is used by the Bancor DEX, to facilitate cross-chain swapping of non-native tokens. All accepted cryptocurrencies that aren’t native to the network, as well as the native token RUNE, are put into liquidity pools.
When a user starts a trade, the system immediately trades one token for RUNE before exchanging RUNE for the other token. Non-custodial exchanges using the THORChain protocol are enabled through double swapping with immediate execution.
Users can also put funds into liquidity pools for other users to borrow from, earning a return depending on the amount they put in. Operational nodes establish liquidity pools. In addition, nodes are responsible for confirming swaps for which they are compensated.
The Proof of Stake consensus process is used by the THORChain protocol, which necessitates the staking of native RUNE tokens.
Node operators are in charge of keeping the network software working. In order to receive RUNE incentives, they run high-performance IT infrastructure and bond RUNE.
They contribute to the network by monitoring transactions on External Chains and executing the protocol. Node operators, on the other hand, may be fined if they fail.
There are 100 to 300 validator slots available, with Nodes earning a validator spot by bonding at least 1 million RUNE. To accommodate network control, nodes are housed on an additional layer with enhanced security.
Liquidity Suppliers are compensated for contributing their assets to the network. Their assets are transferred to Swappers’ asset pools, which are used to exchange assets.
Before reaching the Tendermint limit, the multi-chain network can grow to 99 nodes. Even if the network expands to 99 active nodes, the capacity to share vaults allows it to develop further.
Conclusion
THORChain is a non-custodial liquidity marketplace for blockchains that allows for the permissionless and non-custodial exchanging of assets across various networks.
THORChain is a one-of-a-kind project that addresses several challenges that both centralised and decentralised exchanges face.
While the details of the internal functions of THORChain may appear to be too complicated for beginners, even relatively experienced traders can use the platform.
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