Thorchain Breakdown: What's Unique About This Dex?
Mike Harry
Nov 2023
7 minutes de lecture
Faits vérifiés
Introduction: In this article, we breakdown how Thorchain is designed to facilitate native cross-chain swaps, enabling seamless interoperability between different blockchain networks. With a focus on security and decentralization, we explore the unique consensus mechanism adopted by Thorchain and its potential impact on the future of DeFi. Join us as we uncover the inner workings of Thorchain and explore its potential to reshape the financial landscape!
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Thorchain History
Thorchain is a decentralized cross-chain liquidity protocol that enables users to seamlessly swap assets across different blockchain networks. It was first conceptualized in 2018 by a group of experienced blockchain developers and entrepreneurs.
Thorchain Website
The team behind Thorchain consists of highly skilled professionals with diverse backgrounds in blockchain technology, finance, and entrepreneurship. It is led by its founder and CEO, Chad Barraford, who has a strong track record in the cryptocurrency industry.
With pseudonyms stemming from Norse mythology, the team also consists of multiple individuals who identity remain concealed, underscoring the project's truly decentralized nature.
The project aims to address the liquidity fragmentation issue in the decentralized finance (DeFi) space by providing a unified liquidity pool that can be accessed by various blockchain networks.
The project successfully raised a total of $22 million in its initial fundraise, attracting investments from prominent venture capital firms such as Multicoin Capital, Winklevoss Capital, and Galaxy Digital.
The team is working diligently to improve the protocol and add support for more blockchain networks.
What is Thorchain?
Thorchain is a decentralized liquidity protocol that allows for cross-chain swaps between different blockchains, without relying on pegged or wrapped tokens.
Its primary goal is to facilitate fast and secure trading of digital assets while eliminating the need for centralized intermediaries while making trading between different blockchains as easy and efficient as possible.
This cross-chain capability is what distinguishes Thorchain from many other existing decentralized exchanges, which often operate only within their own blockchain network.
Technically, Thorchain is an innovative implementation of Tendermint & Cosmos SDK, enhanced with Threshold Signature Schemes (TSS) to ensure security and anonymity. It's built with an architecture known as State Machine, which holds the details of the network's state and can execute changes to that state.
How does Thorchain work?
Thorchain It is built on top of the Tendermint consensus engine and uses a unique Byzantine Fault Tolerant (BFT) consensus algorithm. This algorithm ensures that all transactions on the network are validated and verified by a network of decentralized validators.
Thorchain uses Tendermint's sharding capabilities to scale its network. Sharding is a way of dividing the network into smaller pieces, which allows it to process more transactions per second.
Thorchain also uses something called threshold encryption to secure its network. The network's consensus mechanism, known as Tendermint, uses threshold encryption to sign blocks and approve transactions. This ensures that the network is secure, even if some of the nodes are malicious.
Thorchain currently has around 150 validators. Validators are nodes that run the Thorchain software and help to secure the network. They are rewarded with RUNE tokens for their participation.
To become a validator, a node must stake a minimum of 1 million RUNE tokens. The amount of RUNE that a validator stakes determines how much weight their votes have in the consensus process.
Thorchain has been the victim of two major hacks in 2021. In July, the protocol was drained of around 4,000 ether (ETH) in a hack that exploited a bug in the Bifrost protocol. In September, the network was again hacked for around $8 million in assets.
The July hack was the first major hack of Thorchain. The hacker exploited a bug in the Bifrost protocol, which is a bridge that allows users to swap assets between THORChain and the Ethereum network.
The Thorchain team responded to both hacks by pausing the network and performing audits while also reimbursing users who lost funds in the hacks. Thorchain has not been hacked since.
Thorchain Coin (RUNE)
The RUNE token plays a crucial role in the Thorchain ecosystem. It functions as a unit of value and allows users to participate in network governance, incentivize liquidity providers, and secure the network through staking.
RUNE Coin
The token has a fixed supply of 500 million RUNE. One of the key features of RUNE is its ability to provide liquidity for cross-chain assets. This mechanism allows users to easily swap between different cryptocurrencies, including those from different blockchains, without relying on centralized intermediaries.
The decentralized nature of the governance ensures that the platform's future development is driven by the community, aligning the interests of token holders and stakeholders. The team has put a strong emphasis on security and has conducted multiple audits to ensure the robustness of the protocol.
Thorchain Tokenomics
Rune, also known as RUNE, is the native token of the Thorchain network. The initial supply of RUNE tokens was 1 billion, but 50% of these tokens were burned in 2019. This leaves a current theoretical maximum supply of 500 million tokens.
Thorchain uses liquidity pools to facilitate cross-chain swaps. These pools are made up of RUNE and non-RUNE assets, and the amount of RUNE in a pool is proportional to the amount of non-RUNE assets in the pool.
Liquidity providers are rewarded with RUNE tokens for providing liquidity to the pools. This incentivizes users to contribute to the liquidity pool and helps maintain a healthy ecosystem for asset swaps.
As Thorchain continues to gain traction and more users start utilizing its cross-chain capabilities, the demand for RUNE may increase, potentially driving up its value.
eToro USA LLC : Les investissements sont soumis au risque de marché. Y compris la perte possible du principal.
Auteur
Mike Harry
Mike is a passionate crypto enthusiast who bought his first Bitcoin in 2016. With a natural curiosity and a love for learning and tinkering, Mike is always trying out new DeFi applications. Mike excels at breaking down difficult concepts into easy-to-read guides for beginners.
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