Home Cryptocurrency What is THORChain (RUNE): How Does THORChain Work?

What is THORChain (RUNE): How Does THORChain Work?

by Serge Shlykov

THORChain is a smart contract platform that uses blockchain technology to provide businesses with an easy to use and secure platform to manage their own financial transactions and other business-related transactions on the Ethereum network. THORChain aims to solve many of the problems businesses face by unifying various blockchains and reducing the complexity of dealing with multiple chains, while ensuring that the chain that uses blockchain technology is built on a solid foundation and provides a safer environment for the users.

ThorChain is a blockchain-based platform that aims to connect the world through a system of smart contracts that operate with the help of its own unique token (RUNE). The project’s goal is to make the thor token the best, most trusted, most widely-used token in the world, and turn it into a new standard for everyday transactions.

The ThorChain project is creating a blockchain platform that focuses on everyday users, allowing them to receive their daily tasks instantly and for free. It is the easier transfer of data, communication, and value from the users to the vendors.

THORChain is a decentralized inter-chain liquidity protocol that enables the decentralized exchange of digital assets.

THORChain works with the RUNE token and also uses Tendermint, Cosmos SDK, Threshold Signing Schemes (TSS) and Byzantine Fault Tolerance.

If this sounds like a lot of jargon (or even gibberish to some), be assured that what THORChain is trying to accomplish is very complex and requires the management of many moving parts.

In this sense, THORChain allows users to exchange tokens between different chains without using or redeeming intermediate tokens. So instead of using a centralized exchange like Coinbase to trade bitcoin and ethereum, THORChain allows you to do so without ever losing custody of your assets.

Yes, THORChain is custodial free, meaning you retain full control of your digital assets during the exchange process. The main reason THORChain is relevant today is that it resists centralization while solving a major problem for decentralized exchanges – liquidity.

Additionally, THORChain is unique in that it does not bind assets or make cash – no need for WBTC here!

THORChain monitors incoming deposits from users to stores and performs business logic when processing outgoing transactions.

THORChain is essentially a leaderless, byzantine, fail-safe storage manager. Again: If you’re not familiar with these terms, don’t feel bad. You can learn more about what THORChain does, how and why it does it here, and you can also dive into the project documentation.

The RUNE token allows holders to earn more RUNE by providing liquidity to exchanges or by managing the nodes that secure the network.

Everything you need to know about THORChain

THORChain was launched in 2018 as a way to trade digital assets without going through a central exchange. It is praised for its open access to global liquidity, manipulation-resistant pricing channels, consistent and deterministic liquidity across all assets, and common incentives for all participants.

The project provides full transparency of the liquidity and logic of the entire THORChain network and informs its community of developments and events on a weekly basis.

Token RUNE reverses pairs

Designed as a cross-chain solution, THORChain makes it easy to trade any asset, regardless of the native blockchain. Most importantly, users retain full custody of their assets during the exchange.

THORChain also addresses several decentralized finance (DeFi) issues. It uses continuous liquidity pools (CLPs) to provide liquidity to automated market makers (AMMs). THORChain avoids the use of oracles or external pricing sources by using a continuous liquidity pool.

It also uses a sliding rate to avoid intermittent losses, keeping liquidity where it needs to be. It uses a number of other technologies such as State Binding, State Machine, TSS and others to facilitate the exchange of tokens between chains.

THORChain is a network based on Tendermint. Tendermint is a tool that developers can use to learn the basics of blockchain development, such as. B. cryptography, and be able to focus on high-level blockchain development and applications. Essentially, Tendermint is a replicated software that allows developers to create specialized blockchains and decentralized applications (dApps). Tendermint is a low-level protocol consisting of two parts: a blockchain consensus mechanism and a common application interface.

THORChain uses the Proof of Sharing (PoS) algorithm to prevent Sybil attacks. In a Sybil attack, an attacker breaks through the reputation system of a network service. To do so, it creates a large number of pseudonymous identities that the attacker uses to gain disproportionate influence.

It also uses the Byzantine Fault Tolerance (BFT) consensus algorithm, which ensures that the network operates normally even if some nodes act incorrectly or maliciously (see the Byzantine Generals problem).

The node operators are responsible for the operation of the network software. You manage a powerful IT infrastructure and connect RUNE to earn rewards in RUNE. They participate in the network by tracking transactions on external chains and executing the protocol. However, if node managers fail, they may be penalized.

Liquidity providers receive a fee for making their assets available to the network. Your assets are added to the pools that the exchangers use to trade assets.

A multi-chain network can reach 99 nodes before the bid limit is reached. Even if the network grows to 99 active nodes, it can still be expanded by sharing storage.

THORChain User Groups

There are two main user groups in the THORChain ecosystem: Users and providers of cash.

Users are the primary members of the network who use the inter-chain services to easily exchange tokens.

Liquidity providers add liquidity to the various pools; they make the exchange work.

All money is linked by RUNE tokens and stored in individual vaults managed by the network nodes.

RUNE Token

The RUNE token is an integral part of the THORChain system. This BEP2 token is used in all liquidity pools and is connected to all nodes. All RUNE tokens have a 1:1 ratio to the asset, ensuring seamless communication between pools. RUNE also acts as a reward token for the pools and represents the ⅓ average of the network’s revenues, providing a constant incentive for liquidity.

What is THORChain (RUNE): How Does THORChain Work?

How the RUNE token works (source: Thorchain website)

RUNE also contributes to the security of the THORChain network. Abusers have a greater advantage in liquidation than the potential spoils of corruption of the system, since the nodes get ⅔ of the proceeds of the system.

It serves several purposes, including:

  • Liquidity: as settlement asset.
  • Security: as a sybil resistance mechanism for economic behavior.
  • Control: indicates the priority in the circuit.
  • Incentives: pays fees, charges and subsidy for gas.
  • Amplifier: increases wealth.

Liquidators and RUNE users have access to RuneVault, a feature that allows you to store and deploy a token for a return on investment. The Binance Chain feature allows users to unlock the token even when it is deployed – the coin always remains in the wallet and earnings are paid out weekly.

Where can I buy a THORChain RUNE token?

If you want to buy, sell or trade THORNChain (RUNE), you can do so on popular exchanges like :

Well-known supporters and investors of THORChain

THORChain has well-known backers, investors and holders of the RUNE token, THORChain’s native token.

Multicoin Capital is perhaps the most important company to announce its investment in RUNE. Founded in 2017, Multicoin Capital specializes in blockchain, cryptocurrency and token companies. RUNE is one of the company’s most important public functions.

After Multicoin Capital announced the accumulation of a significant portion of its assets, RUNE’s share price made a 30% jump. RUNE was trading at $3.90 before the announcement and reached $5.61 shortly thereafter.

Along with the announcement, they shared a research article describing the potential of this project and how excited they are about the ability to trade tokens between different blockchains.

THORChain Bio and Business History

THORChain was originally founded in 2018 on the premise that centralized exchanges are suboptimal for transferring cryptocurrencies between different blockchains.

The THORChain team aimed to create an independent blockchain capable of connecting external networks and facilitating transfers between chains, similar to a decentralized exchange (DEX). The project is based on the principle of non-retention.

The THORChain team is pseudonymous and has no registered CEO, founder or general manager. The developers met at the 2018 Binance hackathon, and none of the 18 self-organized developers have official titles. All further development is organized through Gitlab. The costs generated by the protocol are paid directly to the users and nothing is provided to the team. The team only spends RUNE, just like everyone else.

The people currently working on the project remain anonymous because they want to protect the decentralization of the project.

What is THORChain (RUNE): How Does THORChain Work?

Final thoughts

THORChain acts as a liquidity marketplace for the blockchain, allowing the exchange of assets across different networks without any permission or restrictions.

THORChain is a unique project that alleviates many of the difficulties faced by centralized and decentralized exchanges.

While the subtle features of THORChain may seem too complex for beginners, the platform is very accessible to moderately experienced traders.

What is THORChain (RUNE): How Does THORChain Work? What is THORChain (RUNE): How Does THORChain Work?The term “blockchain” first appeared in a November 2008 post at the now-defunct blog Slashdot. In November 2016, when the Internet of Things took off, the term “blockchain” gained widespread usage.. Read more about thorchain vs uniswap and let us know what you think.

Frequently Asked Questions

What is Rune THORChain?

Rune THORChain is a blockchain-based platform for the trading of Thor’s Hammer, a rare and precious metal. What is the value of Thor’s Hammer? The value of Thor’s Hammer is determined by the market. What is the value of Rune THORChain? The value of Rune THORChain is determined by the market.

Is THORChain proof of work?

ThorChain is not a proof of work cryptocurrency.

How does THORChain make money?

THORChain will charge a small fee for each transaction. The fee will be paid in THOR tokens.

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