Hundreds, if not thousands of blockchains exist on the market today. All of them try to offer something unique and different. THORChain, as a decentralized liquidity network, will introduce some interesting changes.
Cross-Chain Liquidity Pools
The main selling point of THORChain is its cross-chain liquidity. This will be achieved through a pool system, yet it doesn’t require pegged or wrapped tokens. This is a very different approach to cross-chain trading compared to what the world has seen so far. Judging by this concept, it will not only be beneficial for cryptocurrencies, but also global finance.
Via THORChain, users can swap between different assets across different chains. This provides everything cryptocurrency users have been looking for, as there is no need to convert to wrapped or tokenized assets first. Connected assets can be converted between, in exchange for a transparent fee. All swaps are non-custodial, putting the end user in full control at all times.
Staking and Yields
Through THORChain, it is possible to stake supported assets in existing pools, or create new liquidity pools altogether. All liquidity providers will earn fees and block rewards for being part of the network. Considering how liquidity is always on-chain, it will usher in a completely different era of interoperability and liquidity.
Users are also able to earn a yield on their liquidity, which could result in tapping into a passive revenue stream. For those who prefer running a node, they can use bonded capital to earn a chunk of system income. Nodes are churned every three days to ensure users remain on top of their game at all times.
What About RUNE?
The native THORChain token is called RUNE. It will be found in liquidity pools at a 50:50 ratio with other assets. Through this asset, it becomes possible to link any two pools. A very interesting concept, especially for those who want to easily convert between different assets without having to worry about liquidity.
Node operators may want to take note of how they need to bond RUNE at a 2:1 ratio to their staked amount. Malicious nodes can be slashed and removed from the network altogether. Considering how nodes earn two-thirds of the System income, good behavior will be rewarded and incentivized.