Thorchain(RUNE) is a cross-chain liquidity platform which allows you to swap assets across chains without any intermediaries or custodians in a decentralized environment. Users can then provide liquidity to asset pairs in Liquidity pools allowing them to earn a part of the fees as reward.
RUNE is the native token of the THORchain ecosystem.
There are plenty of chains out there which allow you to swap assets between chains but here's what sets RUNE apart from the rest.
Unlike other chains where you have to trust a custodian to help you move your assets to other chains , RUNE does the same thing only difference your in control of your assets all the time.
Ok , so how does RUNE do this?
Cross-chain /One-way state pegs (The Bifröst Protocol)
Your assets aren't pegged , the state of the chain is. THORnodes listen to transactions on other supported chains and they record the same in the form of "witness" transactions on THORchain. The nodes reach a consensus that the transaction happened by running the clients of the supported networks.
There are 4 major players in the RUNE ecosystem :
Liquidity Providers : Get paid fees for providing liquidity for swapping assets
Node Operators : Keep RUNE as "bond" and get paid for ensuring network security.
Swappers : Users who swap assets using liquidity provided by LPs.
Traders : People who keep a close eye on pools trying to swap assets for a profit.
THORchain State Machine
The state machine records transactions, changes made to the blockchain state and makes transactions to asset vaults.
Consensus
Thorchain uses the Byzantine Fault Tolerance (BFT) Tendermint engine.The network can function perfectly even if 1/3rd (33%) of the network participants act maliciously which is possible because the node operators are required to bond RUNE in order to ensure that they won't harm the network. But if they try to act against the system, then their bond gets slashed or they lose their RUNE tokens as a penalty for deviating from the protocol thus having a monetary loss if they try anything bad.
THORchain uses the Cosmos-SDK for implementing asset swapping and trading. COSMOS-SDK is one of the leading development kits used by many blockchain projects and exchanges.
Continuous Liquidity Pools (CLP)
THORchain implements CLP which has major advantages such as it does not rely on a centralized party which allows users to trade at fair prices. As the name suggests , the liquidity is always "on" with the assets backed by RUNE.The slip-based fee model also helps traders to execute swaps at reasonable rates.
THORnodes
Like in any other blockchain , THORnodes have a copy of the blockchain and run the network. A node can either be a validator or a light client which synchronizes with the chain and displays data.
Governance Model
Users can add new assets to the THORchain ecosystem by staking it in a new pool. The new pool is recognized by the system and placed in "bootstrap" mode.Initially swapping isn't enabled on such pools.The network monitors these pools and lists the one with the highest value.
When a new pools is placed in bootstrap mode , the value(depth) of the pool is compared with other competing pools. If the new pool is deeper than the smallest active pool , then the new asset gets listed and replaces the previous active pool.The pool which was switched back to bootstrap mode undergoes the same process again.
New chains can be listed by the community through THORchain Improvement Proposals (TIP).
The THOR developer community votes on whether a TIP should be approved or not. If it does get approved, then the developers write the code and update the THORnode software. The TIP gets implemented (in this case , the new chain gets implemented) when 67% of nodes have updates their software to the newer version.
Similarly, a chain gets delisted when lesser than 67% of nodes are watching it.
A chain may also get delisted if the total liquidity in the pool goes to zero when all the LPs pull out their assets. If this happens , the RUNE network immediately cuts all ties with the chain in what is called as 'ragnarok'.
Chain Integrations
The dev team has finished working on Bitcoin which is gonna be integrated very soon. Work is gonna begin on bringing Ethereum next.RUNE is blockchain agnostic ie. it does not favor any single asset/chain but is focused on bringing them together.
Other chains which the community plans on bringing into the RUNE ecosystem:
Bepswap
Bepswap is Binance Chain(BNB) based web-client which is the first Dapp on BNB which allows users to swap , stake and provide liquidity to BEP2 tokens. Bepswap has partnerships with leading blockchain projects like Matic , Elrond , TomoChain and Fantom.
RUNE token
RUNE is the main asset of the THORchain network. Rune is a BEP2 token on Binance Chain(BNB).
BNB also uses the COSMOS-SDK like RUNE which enables it to remain blockchain-agnostic. As mentioned before , none of your assets are "pegged" which makes it easier to get them across chains in a trustless environment.
Rune is key to the success of THORchain as it is used to add liquidity to the pools. All the cross-chain assets are paired with RUNE. It is used to pay fees , governance and give out rewards to LPs.
Where to buy and store RUNE?
You can buy RUNE on Binance s.
Since RUNE is a BEP2 token , you need a wallet which supports BNB and BNB assets.
Trust wallet works perfectly for mobile.
Other alternatives include but are not limited to Atomic wallet and Guarda wallet.
RUNE has seen exponential growth in the past year not just in terms of price or market capitalization but also in terms of development, community and partnering with other ecosystems in the cryptospace making it one of the most exciting projects which aims to tackle interoperability and create an Internet of Blockchains.
Thorchain will only keep growing.
Join the RUNE community on Discord:
https://discord.gg/z5y26s3yzR
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