On April 13, the long-awaited God of Thunder finally made its arrival. Now, it’s time to learn more about THORChain and its RUNE token.
A storm more than three years in the making has finally made landfall, and now the rains are pouring down. On Tuesday, April 13, THORChain, and its accompanying token RUNE, finally made their debuts.
No longer an ancient myth or simply a prophecy of a power to come, THORChain had finally arrived, stirring up big excitement among observers who had been waiting roughly three years for the God of Thunder’s arrival. More than 50,000 users logged onto the protocol in just a few hours after it debuted, with more coming in the weeks since.
That excitement was likely triggered by what THORChain technical lead Chad Barraford, told CoinDesk on the eve of the protocol’s launch was the fulfillment “of the initial promises of the white paper.”
So, what is THORChain exactly?
THORChain: Storming From Chain to Chain
THORChain is an automated market maker first outlined in a white paper roughly three years ago.
But just like its Norse-God namesake, THORChain offers a rare power that most other protocols simply cannot match. Instead of conjuring powerful bolts of lightning on command, however, THORChain can do something perhaps even more impressive: enable cross-chain trades.
With THORChain, users are able to “swap freely from one chain to another, one asset to another,” Barraford told CoinDesk. That means making cross-chain swaps with real currencies, rather than wrapped coins or other imitations, while still interacting on a decentralized AMM exchange, similar to many other popular DEXes.
So far, THORChain users can make trades with BTC, ETH, LTC, CH, and BNB. Other tokens and more are expected to be added to the protocol in the near future. But unlike most other cross-chain platforms, THORChain allows users to trade the real assets of multiple unconnected blockchains rather than wrapped coins or other imitations.
Reading the RUNE
Those cross-chain trades are enabled by RUNE, the native token offered by THORChain.
Every time a trade happens on THORChain, the tokens being swapped are matched with an equal value of RUNE. If, for example, a user wants to swap Ether for Bitcoin, he or she would first trade their ETH for RUNE, then trade that RUNE for an equivalent amount of BTC.
Leading up to the debut of THORChain on April 13, RUNE was trading at roughly $12. The opening of the protocol has attracted serious interest from speculations, with the price topping out at roughly $20.80 on May 18 before falling during the recent market volatility. As of press time, it was trading at roughly $10.
Impermanent Loss Slip-Sliding Away?
Cross-chain trades aren’t the only thing superpower that THORChain offers, however. It also provides an answer to a pair of issues that have plagued exchanges and the liquidity providers that fuel them: slippage and impermanent loss.
When it comes to slippage, THORCHain and RUNE have looked to minimize its impact by allowing users to post an equal amount of any token supported by the platform and immediately start earning trading fees. This encourages more liquidity providers to hop into the pool and participate in the system, helping to decrease price variability.
And, when it comes to impermanent loss, Barraford told CoinDesk that the THORChain network “has impermanent loss protection” as long as you stay in it for 90 days.
A Wild THORWallet Appears
On July 15, a new storm appeared on the horizon as THORCHAIN took to twitter to announce the arrival of THORWallet.
What is THORWallet, exactly? According to the team’s announcement, it’s a non-custodial wallet that “enables swaps of Layer 1 tokens in a decentralized way with no middleman.” Crucially, it enables the swap of real assets and tokens, rather than wrapped assets.
THORWallet also allows users to earn interest by investing either in liquidity pools, or a soon-to-come multi-chain savings account, allowing users to earn yield on Bitcoin. Users can also trade synthetic assets with lower trading fees, and
The goal, according to the THORCHAIN team, is to “users the chance to participate in the DeFi space the easiest way possible, directly from your mobile phone.”
THORCHAIN Breached, Promises to Make Users Whole
Just a few days after THORWallet made its debut, THORChain users were left checking their balances after the decentralized exchange suffered a multimillion-dollar breach.
Some early reports speculated that as much as 13k ETH was taken in the exploit. THORCHAIN disputed that notion, however, and said that roughly 4000 ETH was taken — equivalent to roughly $6 million. It also noted that a “recovery plan is in motion” and that it would ensure that anyone who was affected would be made whole, and that the network would be “stronger and more resilient.”
To truly understand how these recent events have impacted behavior on THORCHAIN — including how many new accounts have signed up, token flow activity, and more — we need on-chain data. Fortunately, we’ll have that data soon, thanks to Flipside Crypto’s community-enabled analytics and on-chain data.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
