THORCHain is a decentralized liquidity protocol that lets users quickly swap assets across the different blockchain ecosystems. It is a non-custodial platform that uses an automated market maker (AMM) mechanism similar to the early versions of Bancor (BNT) or Uniswap, with THORChain’s native token (RUNE) serving as the basic swap pair. Traders can swap between different asset pools using RUNE as a hidden middleman at fair market prices and deep liquidity. The protocol also pays a percentage of trading costs to liquidity providers (LPs), who deposit or stake assets on either side of a liquidity pool.
THORChain’s native coin is RUNE. It has a 500 million supply and four critical use cases:
– Security – Node operators must bond twice as much RUNE as the quantity they provide to a pool to assure safety. The RUNE bonds serve as collateral to guarantee that node operators act in the network’s best interests.
– Governance – RUNE token holders can prioritize the asset or chain they want to support. They accomplish this by voting with RUNE.
– Incentives – Block rewards and swap fees are paid on a defined emission schedule to liquidity providers and node operators in the form of RUNE. Additionally, users can also pay gas fees with RUNE.
– Rewards – Every user that adds tokens to a liquidity pool receives a reward in the form of RUNE. Token holders can also stake their assets and profit from the fees collected from other pool participants.