ThorChain (RUNE)

The Birth of ThorChain

A Revolution in Cross-Chain Liquidity

Pioneering the Future of Decentralized Asset Exchange

THORChain emerged as a groundbreaking solution to one of cryptocurrency's most persistent challenges—facilitating seamless asset exchange across independent blockchains. Launched through an Initial DEX Offering (IDO) on the Binance DEX in July 2019, THORChain quickly laid the foundation for its future upgrades. The single-chain Chaosnet, introduced in April 2021, showcased its initial capabilities before evolving into the multi-chain Chaosnet, enabling support for multiple networks. By June 2022, the project reached another significant milestone with the Mainnet launch, marking a fully operational decentralized liquidity protocol. This progression highlighted THORChain’s commitment to reshaping the way crypto assets are exchanged without requiring users to give up custody of their holdings.

A Decentralized Vision: Who Builds THORChain?

A Leaderless Ecosystem Led by Community and Nodes

Unlike traditional blockchain projects, THORChain operates without a CEO, founder, or formal team of directors. Its development adheres to a decentralized ethos, with code upgrades and decisions managed collaboratively through GitLab repositories. Nodes play a critical role, acting as the ultimate decision-makers on the protocol's codebase. Nine Realms, an organization derived from the THORChain community, has taken the responsibility of managing the code and coordinating essential updates with the node operators. This unique governance structure ensures a decentralized and community-driven approach, removing centralized control while fostering transparency and shared accountability.

How THORChain Works: Native Asset Settlement and Liquidity

Redefining Cross-Chain Exchanges

At its core, THORChain enables users to swap assets across multiple blockchains without relying on traditional order books. By leveraging liquidity pools and automated market maker (AMM) technology, THORChain maintains market prices based on the asset ratio within the pools. This allows for permissionless, trustless transactions that prioritize decentralization. Bitcoin, Ethereum, stablecoins, and other assets can all be exchanged across the nine supported blockchains natively, simplifying complex cross-chain settlements.

To further optimize liquidity and protect liquidity providers, THORChain incorporates a slip-based fee system. This mechanism addresses the problem of impermanent loss, a temporary reduction in asset value that liquidity providers often face when contributing to pools. Additionally, deterministic swap ordering ensures that trades are executed based on liquidity fees, eliminating vulnerabilities such as frontrunning and sandwich attacks.

The Utility of RUNE: Powering the Ecosystem

Liquidity, Security, and Governance

RUNE, the native utility token of THORChain, serves as the backbone of the ecosystem. It acts as the base currency in liquidity pools, enabling asset swaps and streamlining cross-chain operations. Beyond liquidity, RUNE is also integral to the platform’s governance and security mechanisms. THORChain employs a Sybil resistance process where nodes must bond RUNE to participate in consensus. This bonding requirement ensures economic security by maintaining a bond value that always exceeds the liquidity on the network.

Additionally, RUNE has undergone significant transitions since its launch. Initially available as ERC-20 and BEP-2 tokens, these versions were phased out after a 2.5-year upgrade period, leaving mainnet RUNE as the only accepted form. With a maximized supply of 500 million tokens, approximately 337 million RUNE are currently in circulation, distributed through earlier funding rounds, IDOs, and team allocations. Importantly, team-held tokens represent less than 1% of the total supply, reinforcing the decentralized nature of the ecosystem.

THORChain’s Technological Backbone: Security and Innovation

Building a Resilient and Trustworthy Network

THORChain leverages advanced technologies to ensure secure and efficient cross-chain transactions. Built on the Cosmos SDK and powered by the Tendermint consensus mechanism, the network employs a Byzantine Fault Tolerance (BFT) proof-of-stake (PoS) system to protect against potential attacks. This approach relies on a rotating validator set, where underperforming validators are churned out every three days and replaced by new nodes based on their bonded RUNE amounts.

THORChain also incorporates GG-20 Threshold Signatures to secure its native asset vaults. When validators are replaced, the protocol generates new vault addresses and migrates all assets to these updated locations. This continuous churning process ensures the highest levels of security and decentralization, reducing risks associated with prolonged validator control.

Where to Access RUNE: Trading and Liquidity

A Token That Powers Cross-Chain DeFi

RUNE enjoys robust liquidity across both centralized and decentralized platforms. It is most accessible through THORChain’s automated market maker (AMM), which connects seamlessly to ecosystem interfaces like THORSwap. For those preferring centralized exchanges, Binance remains a dominant platform for purchasing and trading RUNE. The widespread availability of RUNE highlights its importance in the broader DeFi ecosystem, attracting users looking for efficient and secure cross-chain asset swaps.

By facilitating decentralized liquidity and enabling frictionless asset exchanges, THORChain and its RUNE token continue to play a vital role in connecting blockchain ecosystems and driving the decentralized finance movement forward.