What Is THORChain?

THORChain is a unique decentralized exchange (DEX) that functions on a network built with the Cosmos SDK and Tendermint. Its primary task is to enable cross-chain asset swaps, but in a permissionless manner, meaning anyone can interact with the network. The THORChain network uses a method called Threshold Signature Schemes (TSS) to safeguard its decentralized vault of assets, and a two-thirds majority consensus is needed for assets to enter or leave this main vault.

The THORChain ecosystem consists of four major players:

• Swappers – these are the individuals who use the network's liquidity pools to swap one cryptocurrency for another.

• Liquidity providers – these users offer their digital assets to the network's liquidity pools and get rewarded for it.

• Node operators – they make the network secure, and they are paid for their services.

• Traders – they monitor and rebalance the liquidity pools with the aim of making a profit.

How Does THORChain Work?

A key feature of THORChain that sets it apart from other protocols is its ability to swap assets without wrapping them. Rather, it uses native assets within its network to make these swaps possible and transparent.

These asset swaps are facilitated by the THORChain liquidity pools, containing assets contributed by liquidity providers and secured by node operators. As a reward for their contributions, liquidity providers receive yields from swap fees and system rewards. Anyone can contribute assets to these pools, adding to the permissionless nature of THORChain. And because it is non-custodial, only the original depositor can withdraw the assets they've deposited.

Node operators, or THORNodes, collaborate to form a cross-chain swapping network. They get rewarded in fees for every swap they facilitate. To become a node operator, one must put up a bond of RUNE — THORChain's native token. These bonds serve as a security measure, ensuring that the node operators act in the network's best interest.

During a swap, swappers send their assets to THORChain, which then makes the swap for them. For example, if someone wants to swap Bitcoin (BTC) for Ethereum (ETH), they would send their BTC to THORChain. The system first swaps BTC for RUNE, and then RUNE for ETH, before sending ETH back to the swapper.

Market prices on THORChain are regulated by traders who take advantage of price differences between markets to make profits. This mechanism allows THORChain's market prices to regulate naturally, without needing external oracles.

The THORChain protocol uses these liquidity pools to determine an asset's worth in relation to any other asset simply by using pool balances. This setup creates decentralized liquidity and cuts out the need for centralized intermediaries.

What is RUNE?

RUNE is the native token of the THORChain decentralized liquidity protocol. It plays multiple roles within the network, including being used for staking, settlement, governance, and incentives.

First of all, RUNE tokens can be staked to support the running of network nodes and the validation of transactions. As a settlement asset, RUNE facilitates asset swaps in liquidity pools. Each pool must maintain a 1:1 ratio of RUNE to the other asset. For instance, a pool with $100,000 worth of Bitcoin would require an equivalent amount of RUNE.

The THORChain token also enables governance in the ecosystem. RUNE holders can influence the priority of assets or chains by voting with their liquidity. The pool with the most committed RUNE gets the highest priority.

In terms of incentives, block rewards and trading fees are distributed in RUNE to liquidity providers and node operators. RUNE can also be used to pay for gas fees on the network.

The total supply of THORChain's RUNE token is capped at 500 million, and the circulating supply continues to grow. The value of RUNE aims to be deterministic, with the market cap of RUNE ideally being three times the total value of non-RUNE assets in the liquidity pools. This contributes to a stable THORChain price and to benefits for RUNE holders across various cryptocurrency exchanges.

Who Created THORChain

THORChain is a unique decentralized project that doesn't have a typical organizational structure such as a CEO, a founder, or directors. Instead, the ongoing development of the protocol happens via Gitlab, a web-based DevOps platform, with nodes deciding on the codebase to run.

The team working on THORChain is largely anonymous. According to an official representative, this anonymity is a deliberate choice to ensure the project's decentralization and protection.

How Is THORChain's Market Price Determined

The market price of the THORChain token, like other crypto assets, is determined by several key factors.

Firstly, supply and demand play a crucial role. The total number of RUNE tokens is fixed, creating a scarcity that can drive up the THORChain price when demand increases. Conversely, if demand decreases, the price could fall.

Media and news can influence investors' decisions, thus affecting demand. Positive news about THORChain or RUNE tokens can cause the price to surge. However, negative news, like security breaches or fraud, can lead to a decrease in demand and, consequently, a fall in the THORChain price. Therefore, when buying crypto, it's crucial to consider these factors, as they can result in price volatility.

Competition among various cryptocurrencies on each particular trading platform is another important factor. When new digital currencies enter the crypto market, they compete for investments, which can influence the price of existing cryptocurrencies like THORChain.

Last but not least, regulations can also affect the price of THORChain alongside the rest of the crypto market. Countries differ in their approaches to cryptocurrency regulations. Tighter rules can lead to a decline in the price, whereas liberal policies can encourage growth in the crypto market, potentially boosting the price.

Why Buy THORChain (RUNE)

Here are some of the reasons why you might consider adding THORChain (RUNE) to your portfolio.

1. Mitigation of Impermanent Losses . THORChain addresses the issue of temporary losses incurred by liquidity providers with a unique slip-based fee system, which ensures liquidity remains where it's needed.

2. Facilitation of Cross-Chain Token Swaps . THORChain employs novel technologies like one-way state pegs, a state machine, the Bifröst Signer Module, and the TSS protocol to allow for seamless, permissionless cross-chain token swaps.

3. Potential for Passive Income . As all fees go directly to participants, those providing liquidity or operating THORChain Nodes could generate a passive income. There's also RUNE staking.

4. Availability on Multiple Blockchains . As of now, the RUNE token is available on various blockchains, including Binance Chain (as a BEP-2 token) and Ethereum (as an ERC-20 token). This means that you can trade assets across blockchains, swapping Bitcoin, Ethereum, and other cryptocurrencies for RUNE on various crypto exchanges.

5. Incentivization through RUNE Holding . The THORChain team is incentivized in the same way as other users by simply holding RUNE. If you believe in the project and the team, buying and holding RUNE could align your investment objectives with theirs.

Before you decide to buy or sell THORChain, consider the current price of RUNE and how it fits into your overall investment strategy. Remember, investments in cryptocurrencies and smart contracts should always be made carefully and with full knowledge of the potential risks and rewards.

Best Ways to Buy THORChain Safely

There are many different ways to get some RUNE tokens. No matter what payment method you prefer, there certainly is a way for you to buy THORChain (RUNE).

Before buying RUNE, you should first compare crypto exchanges. Not all of them offer favorable rates and fair fees. If you don't want to spend time going from one exchange to another to compare prices, you can use fiat-to-crypto aggregators, which list offers from multiple fiat payment gateways.

Please note that you will need to check whether your chosen platform supports RUNE. Although it has a high market cap, it is still possible that a platform may not have listed it yet. If that's the case, you can first buy BTC, BNB, or ETH instead and use it to get your RUNE tokens.

How to buy RUNE with a credit and debit card

This is one of the most common ways of buying cryptocurrency. Most fiat gateways allow you to use your bank card to pay for crypto. Please keep in mind, however, that the majority of platforms only support Visa and Mastercard bank cards.

Other than traditional crypto exchanges, P2P platforms like the one run by Binance are also a great way to purchase RUNE with your debit or credit card.

How to buy RUNE with bank transfer

It is easy to buy RUNE with a direct transfer from your bank account. Go to your aggregator or platform of choice, select bank transfer as your payment method, and follow the instructions to complete the transaction. Make sure to have your bank account details ready — you will need to enter them to proceed with the purchase.

How to buy THORChain with Apple Pay or Google Pay

Many platforms these days, including Changelly, offer crypto purchases via Apple and Google Pay. If this is your preferred payment method, simply choose it when initiating the transaction.

Please note that it is likely that you will have to install the app of your preferred crypto exchange in order to be able to use this payment method. For Apple Pay, you will need an iOS device, and for Google Pay, an Android one.

How to buy THORChain (RUNE) with PayPal

There's no direct way to use PayPal to purchase THORChain. Instead, you can utilize it to get some Bitcoin or Ethereum first and then exchange them for RUNE.

How to buy RUNE from ATM

Crypto ATMs usually support a very limited number of cryptocurrencies, and RUNE is unlikely to be within their ranks. If you want to use an ATM to buy crypto, you will need to get any available cryptocurrency, such as Bitcoin. Then, you can use that BTC to get RUNE via a crypto exchange like coinflip or Binance.

How to buy RUNE with cash

There are two main ways to buy THORChain with cash.

First of all, you can simply find someone who would exchange their RUNE for your physical fiat money. Please keep in mind that this can be very unsafe and should only be done if you trust the other person.

Secondly, you can use a crypto ATM to purchase any available cryptocurrency, like Bitcoin, and then exchange it for RUNE.

How to buy THORChain (RUNE) with a prepaid card

The majority of cryptocurrency exchanges allow crypto purchases via prepaid cards. As long as your card is valid, you should be able to purchase RUNE with it.