In our commitment to broaden our offerings continually, we are introducing a new project addition - THORChain. THORChain is a decentralized exchange that allows users to exchange tokens from various networks, including Bitcoin and Ethereum, with other tokens that don’t belong to the same network.
This article provides you with a comprehensive overview of THORChain, its native token RUNE, tokenomics, functionalities, and its potential impact on the crypto ecosystem. Lastly, you will learn how to buy RUNE coins.
What Is THORChain?
THORChain is a decentralized liquidity protocol that enables users to trade assets in an environment that does not require authorization. By acting as a vault manager, it allows for the use of native layer-1 assets, such as Bitcoin, for trading.
With the assistance of Tendermint and Cosmos-SDK, THORChain ensures the security of its network. Additionally, it utilizes Threshold Signature Schemes (TSS) for its primary vault, which operates without a leader.
Node operators are responsible for maintaining full nodes on every supported chain to validate cross-chain transactions and operate a multi-party computation (MPC) protocol to manage liquidity pools across chains.
The THORChain blockchain is managed by these node operators, offering both single-sided (Savers) and double-sided (ordinary LPs) liquidity on the platform.
Overview of RUNE
Participants in the THORChain network, including liquidity suppliers, node operators, and others, utilize the native token called RUNE. Holding RUNE can be beneficial for individuals interested in arbitrage trading on THORChain, as they can take advantage of potential arbitrage opportunities resulting from imbalances in THORChain liquidity pools.
Interoperability between different blockchain networks is another factor that cryptocurrency traders may consider as a potential value driver for specific cryptocurrencies like RUNE.
Speculative traders may also choose to hold RUNE, anticipating price increases in the future, due to the platform's continuous development of additional use cases for the token.
Despite striving to minimize governance, THORChain's protocol includes components that utilize committed capital to indicate priority. When listing assets, a new asset can be added to the pool every few days, based on the asset listing procedure. The asset with the highest level of commitment from RUNE employees is usually prioritized for listing.
The pooled amount of RUNE may increase or decrease due to arbitrage activities, as it is pooled 50:50 with external assets in liquidity pools. Consequently, as the value of those assets fluctuates, the pooled amount of RUNE reflects these changes.
While the value of an individual RUNE unit may remain stable, the quantity of RUNE in the pool can vary. Therefore, the system maintains an understanding of the assets' value it aims to acquire, with the quantity of RUNE in all its pools being the key factor.
To ensure the safety of protected assets, the system can implement incentives once it comprehends their value.
THORChain's native currency, RUNE, is used for payment of transaction fees on the network. Every swap incurs a fixed network fee, in addition to a dynamic slip-based fee. This fee structure helps prevent various attack vectors, including denial-of-service assaults and sandwich attacks on liquidity pools.
Subsidizing Gas Fees
Gas consumption is a continuous process for the network, as it constantly executes transactions within and outside the network. Since gas usage on networks like Bitcoin and Ethereum can become complex rapidly, THORChain does not make significant efforts to track every detail of gas consumption. Instead, nodes are free to utilize essential assets like BNB, ETH, BTC, and similar assets at their discretion to cover gas fees.
Initially, there was a maximum supply of approximately one billion RUNE tokens; however, in 2019, the supply was reduced to 500 million. Following the completion of this token burn, 44.09 percent of the tokens were distributed to service nodes, 10.4 percent were allocated to cover operational costs, 10 percent was allocated to the community, and 10 percent was allocated to the team and advisors. The remaining tokens were retained to support the project.
How to Buy RUNE Tokens on CoinEx?
CoinEx is a global cryptocurrency exchange trusted by 5+ million users worldwide with 100% reserve. Users can now trade quickly and seamlessly with its 700+ tokens supported, including RUNE.
To purchase RUNE tokens on CoinEx, follow the steps below.
- Create an Account: Start by signing up for a CoinEx account.
- Deposit Funds: After logging in, deposit funds into your CoinEx account using any supported cryptocurrencies or deposit methods available on the exchange. Having funds in your account enables you to execute trades seamlessly.
- Navigate to RUNE Trading Page: Once your account is funded, go to the dedicated RUNE trading page on CoinEx. You can find a search box and enter the term "RUNE" to swiftly locate the trading pair associated with RUNE tokens.
- Choose a Trading Pair: Select the desired trading pair that matches RUNE with another cryptocurrency. For instance, you may choose RUNE/USDT to trade RUNE against USDT (Tether).
- Specify the Purchase Amount: Determine the quantity of RUNE tokens you want to purchase. Input the amount in the trading interface, which will calculate the corresponding cost based on the current market price.
- Execute the Trade: Execute the trade with the specified amount. Confirm the details, and if you are satisfied, submit the order.
Following these comprehensive steps, you can easily trade RUNE tokens on CoinEx using the available trading pairs.