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THORChain

Swap between blockchains directly from your wallet. Earn yield on your assets.
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Finance
Blockchain
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Ethereum
Currency
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RUNE
Publisher
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THORChain Team
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What is THORChain?
THORChain is a decentralised cross-chain liquidity protocol which uses the Tendermint consensus engine, Cosmos-SDK state machine and GG20 Threshold Signature Scheme (TSS). It does not peg or wrap assets, it manages funds directly in on-chain vaults, and secures those funds using economic security. It could be described as a "cross-chain automated market maker (AMM), like Uniswap".

Decentralized Cross-Chain Infrastructure
THORChain is a settlement layer that facilitates swaps between 8 chains: Bitcoin, Ethereum, Binance Chain, Avalanche, Cosmos Hub, Dogecoin, Litecoin, and Bitcoin Cash. THORChain is secured by its native token, RUNE, which deterministically accrues value as more assets are deposited into the network. Anyone can use THORChain to swap native assets between any supported chains or deposit their assets to earn yield from swaps.

THORNodes
THORNodes service the THORChain network, of which there is intended to be initially 100, but can scale to 250+. The design goal of THORChain is such that anyone can join the network with the required funds (permissionless) and be anonymous, yet still be secure. THORChain takes this a step further by having a high churn schedule, kicking out nodes continuously. This high-churn network ensures that it is censorship-resistant, evades capture and resists centralisation.

Cross-chain trading without wrapping
Unlike many other decentralized exchanges that require users to wrap their tokens to enable trading across different blockchain networks, Thorchain allows direct cross-chain trading without wrapping. This means that users can trade their tokens on the Thorchain network without having to go through the time-consuming and costly process of wrapping and unwrapping their tokens.

Node operator incentives
Thorchain incentivizes node operators to ensure the network's security and reliability by rewarding them with transaction fees and RUNE tokens. Node operators can earn additional rewards by participating in network upgrades, bug bounties, and governance voting. This incentivization model promotes a more decentralized network with a higher level of security.

Non-custodial trading
Thorchain is a non-custodial exchange, meaning that users retain full control over their assets and private keys at all times. Unlike centralized exchanges that require users to entrust their assets to a third party, Thorchain's non-custodial model ensures that users maintain full ownership and control over their digital assets.

Liquidity pools
Thorchain uses a unique liquidity pool model that enables users to earn a share of the transaction fees generated by the network. Users can add their assets to liquidity pools, which are used to facilitate trades between different cryptocurrencies. In exchange, users earn a share of the fees generated by the network. This creates a self-sustaining ecosystem that incentivizes users to participate in the network and contributes to its overall liquidity.

Community-driven governance
Thorchain's governance model is community-driven, with all major decisions being made through a decentralized voting process. This ensures that all stakeholders have a say in the direction of the project and helps to maintain a high level of transparency and accountability. Additionally, the community can propose and vote on network upgrades, bug bounties, and other initiatives to improve the network's functionality and security.
Information
Type
Automated Market Maker
Blockchain
Ethereum
Currency
RUNE
Platform
Windows, macOS
Publisher
THORChain Team
FAQ
Automated market makers (AMMs) are decentralised exchanges (DEX) that pool liquidity from users and price the assets within the pool by using algorithms. The exact mechanics vary from exchange to exchange, but generally, AMMs offer deep liquidity, low transaction fees, and 100% uptime for as many users as possible.
Liquidity Providers (LPs) are network participants who deposit their assets into these pools (i.e. virtual, asset-specific reservoirs), and by doing so, come to own a share of that particular pool for as long as they retain their assets within. In exchange for adding their assets to the pools, LPs earn rewards, as swappers (who use pools to exchange assets) incur fees, which are proportionally distributed to the pool owners. Some protocols also boost the liquidity APY by emitting block rewards (for example, $BNT by Bancor and $RUNE by THORChain).
THORChain is an independent blockchain that operates as a Layer 1 cross-chain decentralised exchange (DEX). Built using the Cosmos SDK, THORChain enables the exchange of assets across disparate blockchains in a non-custodial manner. THORChain is the backend for many user interfaces.
Key selling points of THORChain are:
The ability to swap Layer 1, or native, assets across multiple chains - e.g. native BTC to ETH swap.
No user-registration required - simply send a transaction and THORChain will execute it.
No wrapped assets - all assets are natively secured.
Transparent, fair prices, without relying on centralised third-parties.
Continuous Liquidity Pools that maximise the efficiency of the protocol.
THORChain features a native token RUNE, which owners can use to participate in the network and is used to pay for the swap/gas fees for RUNE pairs. RUNE has specific utility within the THORChain ecosystem, as it fills four key roles:
Settlement Asset
Network Security
Governance
Incentives
RUNE as a Settlement Asset
RUNE is the settlement asset for all pools, so a 1:1 ratio of RUNE:ASSET is required for pooling. For example, a pool with $100,000 in BTC will necessarily hold $100,000 worth of RUNE. Within a pool, all assets will have a 50% pairing with RUNE regardless of how assets are added or withdrawn.
Swaps in THORChain use native assets. Example: When a swap from RUNE to BTC occurs, RUNE is sent into THORChain from the user and BTC is sent out from one of THORChain’s vaults - Inbound gas is paid in Native RUNE, Outbound Fee is paid in BTC.
When Swapping from BTC to ETH, BTC is sent into THORChain from the user and ETH is sent out from one of THORChain’s vaults. Internally, once the BTC is received, RUNE moves from the BTC pool to the ETH Pool - thus it is a double swap (BTC:RUNE, RUNE:ETH). Inbound gas is paid in BTC, Outbound Fee is paid in ETH. See Swappers for more information.
The capital on THORChain can lose its balance over time. Sometimes there will be too much capital in liquidity pools; sometimes there will be too much bonded by nodes. If there is too much capital in liquidity pools, the network is unsafe. If there is too much capital bonded by nodes, the network is inefficient.
If the network becomes unsafe, it increases rewards (block rewards and liquidity fees) for node operators and reduces rewards for liquidity providers. If the network becomes inefficient, it boosts rewards for liquidity providers and reduces rewards for node operators.
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