A decentralized liquidity network where we can swap tokens at 1:1 ratio using RUNE as collateral.
What is thorchain(RUNE)?
Thorchain is a decentralized liquidity network with an interoperable blockchain that allows cross-chain token swaps in a non-custodial manner. Users can simply swap tokens across various blockchains without having to register for an exchange or go through KYC.
Who are the founders of thorchain?
According to an official representative of THORChain, the platform has no CEO, no founder, and no directors. Instead, the further development of the platform is organized through Gitlab.
On top of this, those currently working on the project are largely anonymous. Again, an official representative of THORChain states that this is to “protect the project and ensure that it can decentralize.”
How Thorchain is maintained?
->Developers work for the Nodes, by shipping code that makes the system more valuable.
->Nodes work for the Stakers, by securing assets and being online.
->Stakers bring capital, placed on-market for the Swappers.
->Swappers pay fees, bringing economic activity.”
As of February 2021, there are 158.4 million RUNE in circulation out of a total supply of 500 million.
As we touched on earlier, THORChain initially launched following an IEO on the Binance DEX. As part of the IEO, 20 million RUNE were sold. Before this, a total of 130 million RUNE were sold in earlier funding rounds.
According to the official Binance DEX proposal, 10% of the total supply (50 million tokens) was allocated to the team, and locked until the launch of the mainnet — unlocking at 20% per month thereafter.
THORChain currently has an emission curve starting at 30% APR. This is scheduled to target around 2% APR after ten years.
Liquidity Providers: These users deposit assets (like native bitcoin or Ethereum) into liquidity pools. In return for depositing their assets, they earn yield.
Traders: These users desire to exchange one asset for another, such as native ETH for native BTC. They send ETH in and get BTC out.
Node Operators: These users run THORnodes, which comprise the THORChain Node (Tendermint/Cosmos SDK), and a node for each supported chain. A node operator will thus be running a Bitcoin node, Ethereum node, etc
How does thorchain work?
The thorChain ecosystem is used for platform governance and security as a part of THORChain’s Sybil resistance mechanisms. ThorChain nodes commit a minimum of 1 million RUNE to participate in its rotating consensus process.
ThorChains consensus is proof of stake and built on Tendermint, with network validators required to bond their native token, RUNE. RUNE is the native utility token of this platform. It has token models that increase value as the utilization of the network grows. RUNE is used for two fundamental reasons
1. Thorchain doesn’t operate by direct asset transfer, it needs RUNE to move from one asset to another and to activate ThorChain’s Bifrost Protocol. So, in liquidity pools, the base pair is a 1:1 ratio of ASSET RUNE is required.
2. RUNE is not intended to be a governance token, where nodes can determine which direction it takes. Thor chain is not only limited to traders looking to trade spot tokens.
RUNE has the five purposes
· Liquidity: as a settlement of asset
· Security: As a Sybil-resistant security measure and mean for driving economic behavior
· Governance: to signal priority on chain
· Incentive: as part of the incentive mechanism, RUNE used to pay out rewards, charge fees, and subsidize gas
· Amplifier: to elevate assets that are on Thorchain
The project’s Continuous Liquidity Pool (CLP) incentivizes any ThorChain participant to supply liquidity in exchange for a reward. ThorChain’s CLP has its on-chain and trustless ‘basket’ of liquidity and incentivizes participation in filling it, which means that thorchain’s liquidity pool is a unique exchange environment that never requires a pairing of buyers ansellerser to transact. The Bifrost protocol also tracks the ratio of RUNE to the asset in the CLP.
Thor chain uses a unique system to help mitigate the issue of “impermanent losses” that liquidity providers can experience when contributing to liquidity pools. It achieves this by using a slip-based fee to help ensure liquidity stays where it is needed. The attraction of Thorchain is that the chain-agnostic feature allows it to swap assets on a real basis. This is a milestone as a current the closest Bitcoin is to Defi is in its wrapped form. Further, as the network of new smart contract platforms grows, the number of chains is growing.
Thorchain combines a range of novel technologies, including on-way state pegs, a state machine, the Bifrost signer Module, and a TSS protocol to seamlessly facilitate cross-chain token swaps. The platform isn’t profit-oriented. All fees generated by protocol directly go to the users and there are no provisions for the team.
Currently, the thorchain is working on Polkadot, Solana, Monero, cosmos (ATOM), and in anticipation of the launch of its mainnet.
Rune integrates with Terra
One development that has excited the RUNE community is the integration of Terra (LUNA) into the THORChain protocol. This integration also enables the platform to support all Cosmos-based projects.
Terra integration brings LUNA token, along with the TerraUSD (UST) stablecoin to the THORChain ecosystem and gives users more trading and staking options.
THORChain now supports six wallet types and eight blockchains on its THORSwap cross-chain decentralized exchange. THORChain is also in the process of adding support for Haven and Monero.
As part of the rollout for Terra and the Cosmos SDK, THORChain will be updated via a hard fork, which will be fully tested in the testnet and followed by further testing in Stagenet after the Terra launch and on ChaosNet before the mainnet launch.
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