Cross-blockchain DeFi: THORChain (RUNE) in 5 🖐

What is THORChain (RUNE)? 🔨

THORChain is a Decentralized Liquidity Network. It facilitates cross-chain liquidity pools with no pegged or wrapped tokens.

The key innovation is that THORChain allows swaps between blockchains, while other DEXs like Uniswap only work within the Ethereum ecosystem and require centralized wrapping processes on assets from other blockchains, like Wrapped Bitcoin.

THORChain is running on a limited mainnet, Chaosnet. Launch on mainnet will happen in Q2/Q3 2021.

Interaction with the network happens through several online interfaces like THORSwap. Soon, this will also be possible on the Trust wallet.

Despite that, THORChain has around $800 mn in assets locked and more than 8k monthly active users.

THORChain requires liquidity providers to lock both assets in the pair, but one-sided liquidity like Bancor‘s is in the roadmap.

Also, like Bancor, THORChain provides impermanent loss protection, so liquidity providers don’t suffer when the prices of assets in a pair diverge.

RUNE is the network token. It’s the base currency for all pairs, which require staked RUNE for the same value as the other asset locked.

Node operators need to bond at least 2x the amount of RUNE staked in pairs, making any control attempt on this layer impossibly expensive. This protects the network from Sybil attacks that try to obtain control by setting up rogue nodes.

THORChain is an open-source project with no company behind it. Most contributors are anonymous, and there is a strong focus on decentralization.

A majority of the nodes need to agree on the changes to the software. Those who don’t, get churned if they don’t update.

Of course, this is not financial advice yada yada yada.

If you swap your money for losses, don’t come crying. It’s on you. Do your own research, and don’t trust charlatans like me.

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