THORChain

THORChain is a decentralized liquidity protocol developed to enable the exchange of native assets across different blockchains.

What is THORChain? 

  • THORChain (RUNE) is created with the goal of letting its users swap tokens across different chains without wrapping them or having to use intermediary pegged tokens.
  • Instead of requiring users to select an exchange to trade Bitcoin or Ethereum, THORChain essentially makes this a possibility without ever letting the owner lose custody of their assets.
  • The RUNE token powers THORChain, and it is used as the base currency in the network.
  • THORChain does not peg or wrap assets, so no need for WBTC, for example. Prior to THORChain, moving Bitcoin between exchanges was difficult, and WBTC was a requirement as it was an ERC-20 version of the token that represented Bitcoin on the Ethereum Blockchain, and due to the fact that WBTC is integrated into EThereum, it automatically gained support for Ethereum wallets, decentralized applications (dApps) and smart contracts.
  • The liquidity protocol is implemented in order to analyze the incoming user deposits to the pre-existing vaults. Its purpose is to execute and process outbound transactions.

Key Metrics

TickerRUNE
Token NameTHORChain
Token Type/ProtocolERC-20
Total Token Supply461,668,422
Current Circulating Supply See Coinmarketcap
Market CapitalisationSee Coinmarketcap
Token Creation DateOctober 2020
Can it be mined?No

Who is behind THORChain? 

THORChain is a decentralized project without a company, CEO, nor public founders.

The project was initially founded in 2018. However, the team is pseudo-anonymous with the goal of protecting the project and their identities, with only their GitHub IDs available.

This is displayed within the business model as well, as all fees go back to the users, and there is no revenue model for the team itself through the protocol. Instead, all the swap fees go to liquidity providers, while all protocol fees are burned. The emissions and block rewards go to the validators. 

What is the purpose of THORChain? 

THORChain launched in 2018 as a way to exchange digital assets without the use of a centralized exchange.

The project offers a complete level of transparency on the liquidity as well as the logic of the entire network. This is done by having THORChain update the entire community on the development progress and events throughout every week.

THORChain is built to be a cross-chain solution. Its main goal is to enable seamless swaps of any asset, regardless of the native blockchain it is built on and operates on. Users can also maintain full custody of their assets throughout the exchange. THORChain is also built to address Decentralized Finance (DeFi) issues. 

THORChain avoids any requirements when it comes to external data feeds or oracles by using a continuous liquidity pool.

Insights:

  • THORChain is a Tendermint-based network, which is a tool that allows developers to skip over the basics of blockchain development and focus on high-level blockchain and app development.
  • THORChain uses a proof-of-stake (PoS), and this is done with the aim of avoiding any Sybil attacks. Within these Sybil attacks, the attacker subverts the reputation system of a network service. This is a process which is conducted through the creation of a large number of pseudonymous identities. 
  • THORChain uses the Byzantine Fault Tolerance (BFT) consensus algorithm. This ensures the network security is high and that transactions will only be processed when consensus is reached even with malicious actors within the network.
  • Node operators are responsible for running the network software of THORChain.
  • There are two primary user groups within the THORChain ecosystem: the users and the liquidity providers.
  • The RUNE token serves multiple purposes, including powering liquidity, security,, governance, as well as an incentive mechanism for contributors to the network.
  • Liquidators and RUNE users can access the RuneVault. The RuneVault is essentially a feature that allows them to store and stake the token, generating a return on the investment.

Risks:

  • Given the fact that THORChain has no disclosure on its development team apart from their anonymous GitHub IDs, there are concerns as to the relative safety of the project, as most cryptocurrencies openly disclose their team for greater transparency.
  • A white-hat hacker discovered a bug in the THORChain ETH router. This bug essentially allowed the hacker to extract ERC-777 assets. This has since been amended.

News and Updates:

  • The THORChain treasury is at $194m as of August 30, 2021, which is sufficient for the roadmap, and the community grants can be allocated now.
  • There have been numerous updates to the THORChain protocol. These are the  Automatic Solvency Checker, Granular Network Pause Controls, Node Timeouts, Outbound Throttling, Node Broadcast Bot, and Live Monitoring.
  • THORSwap, which is a cross-chain decentralized exchange built on THORChain, raised $3.75 million in a private token sale led by IDEO CoLab Ventures.

Community & Whitepaper Links:

Disclaimer  

All investments are speculative and involve substantial risk and uncertainty. Investors should understand the nature of digital assets, including the terms of return and the risk of assets. We encourage investors to fully understand the assets and the risk associated with them prior to making any investment.

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