THORchain Explained
Recently, there has been an explosion of new cryptocurrencies and blockchains. It has caused the need for interoperability, as you have to send your tokens between different networks. One innovative decentralised platform which is solving this issue is THORChain.
The network offers a cross-chain infrastructure that allows you to swap tokens across multiple blockchains. It is designed to smooth out the peer-to-peer exchange of digital assets. Along with its interoperability, it maintains immutability and does not need wrapped tokens for swaps.
Curious to know how the THORChain works? This article covers the blockchain’s unique features, the working mechanism, and crypto RUNE.
What is THORChain?
THORChain is one of the leading cross-chain architectures which offer a secure path for token exchange. It is an entirely decentralised platform that is compatible with eight popular chains. It can support swaps between Bitcoin, Ethereum, Avalanche, Binance Smart Chain, Dogecoin, Bitcoin Cash, Litecoin, and Cosmos Hub.
Leveraging its interoperability, you can swap the native tokens of its supported blockchains. It creates a frictionless experience and is used for various DeFi needs.
In the beginning, THORChain was deployed on the Cosmos network. However, in April 2021, the network introduced an update that transformed it into an independent blockchain. Its mainnet provides an environment where non-compatible currencies can be exchanged without intermediaries.
The blockchain also provides you with more liquidity. Because of this, its network poses a more secure option than the various centralised and decentralised exchanges.
In addition, you can also earn yields on the network. It has liquidity pools where you can deposit your assets and gain profits. The THORChain DEX brings you crypto lending services too. It also allows you to secure digital asset funding almost instantly.
How does the THORChain work?
THORChain is a cross-chain DEX protocol that works like an Automated Market Maker (AMM). Its mechanism involves Tendermint software, Threshold Signature Scheme (TSS), and the Cosmos SDK.
It follows the Proof of Stake (PoS) consensus mechanism. It involves validators staking their RUNE tokens in the network to validate transactions and run the nodes. Among these, the operative nodes are also responsible for creating liquidity pools.
The blockchain works with the same principle as the Bancor DEX. It includes the pool liquidity ecosystem where users deposit their cryptocurrencies. The pool also includes the native token of the chain, which is RUNE. Then the protocol behind it uses algorithms to evaluate the value of the assets against RUNE.
The process facilitates the exchange of non-native tokens. So, for instance, when you swap Bitcoin for Ethereum, the protocol exchanges BTC with RUNE first. Then it moves on to swapping RUNE with Ethereum.
This double-swapping process allows instant completion of transactions. Besides, it enables non-custodial exchanges to work freely with the THORChain protocol.
What are the benefits of using THORChain?
One of the main goals behind the creation of THORChain is to offer deep liquidity to the users. It was built on the premise that centralisation removes economic safety from exchanges. That’s why there needs to be decentralised exchanges that offer more economic security because of locked assets.
The liquidity of THOR, along with its cross-chain abilities, makes it an exceptional choice for users. It allows them to swap tokens back and forth between different blockchains. Moreover, it does not need intermediaries for swapping, keeping the system swift and secure.
In addition to that, you can be part of different liquidity pools on the network. It allows you to earn yields on your funds and get crypto loans.
Overall, the THORChain blockchain provides a single interactive interface from which you can securely access multiple assets. It not only offers interoperability but also has features like crypto lending, yields, etc.
THORChain ecosystem
The network ecosystem involves a range of different decentralised applications (DApps). According to the THORChain website, there are a total of 41 projects offering various services to its users. These include both THOR’s own as well as third-party apps.
The list of DApps involves various self-custody wallets like Trust, Edge, and ThorWallet. It also introduces digital asset trading platforms like ShapeShift DAO, THORSwap, and Rango Exchange.
You can also get analytical insights on the platform with the projects like THORChain explorer, THORCharts, and Nansen Portfolio. Other categories include NFT, Launchpad, Support, Community, and more.
THORChain crypto (RUNE)
RUNE token is the native crypto in the THOR network. It plays a crucial role in the cross-chain exchange of different tokens. It serves as a settlement asset and offers deep liquidity. The high liquidity RUNEs provide you with economic safety on the network. Due to its mechanism, you do not need wrapped tokens or several cryptocurrency pairs.
Crypto is also used as the governance token on the network. When you use crypto, you will gain governance rights for choosing your liquidity pool. The network also uses RUNE to provide incentives to the users.
RUNE tokenomics and price
The economics of the THORChain crypto is reasonably straightforward. According to CoinMarketCap, the max supply of the tokens is 500,000,000, from which around 327,056,566 RUNEs are in circulation. The project's market cap is more than $500 million.
It is designed to lock RUNE's $3 against each $1 of the non-native assets in the liquidity pool. The network's total value-locked (TVL) is $132,570,726.
As for the price of the coin, it directly depends on the usage of THORChain. Currently, one RUNE is priced at around $1.67, with a trading volume of $52,092,701 in the past 24 hours.
THORChain price prediction 2023, 2025, & 2030
According to the forecast from DigitalCoinPrice, RUNE shows bearish long-term trends. Its data suggest that the coin will likely capitalise on its current price and maintain an average of $3.28 in 2023. In addition, the coin may hit the $6 mark in 2025. However, until 2030, its price will be around $17, even less than its current all-time high value.
On the other hand, data from PricePrediction.Net shows slightly bullish trends. It predicts that the THORChain crypto may reach the maximum of $2.95 in 2023, whereas it will likely average $2.62. Moreover, in 2025 its price may grow to $6.57, and it may average around $5.54. Meanwhile, till 2030, RUNE’s price may cross the $30 mark and will likely average $33.81.
Closing thoughts
THORChain network is a unique take on DEX. It follows the AMM model and is backed by high liquidity, providing enhanced security. It is an all-in-one platform where you can perform multi-currency exchanges frictionlessly. Besides, it gives you access to the most popular currencies like BTC, ETH, and DOGE.
Meanwhile, the platform is still seeing growth. Many third-party applications are becoming a part of THORChain, which will help the RUNE crypto to grow as an investment.
Author: Wasay Ali
Wasay Ali is a versatile professional writer with global experience and a background in mechanical engineering and social science. He is adept at crafting news and informational content for the crypto space and has experience writing for other niches. He is a professional SEO content writer who has worked with several digital marketing agencies and clients in the US, UK, Pakistan, and Europe. He is a dedicated volunteer and enjoys reading, writing, poetry, and going to the gym. He is an INFJ-A personality type dedicated to positively impacting the world. Wasay has a passion for writing as it allows him to express his creativity, share his knowledge, and connect with people worldwide.
Share