RUNEUSD
THORChain / United States dollar
crypto Composite

THORChain is an independent blockchain built using the Cosmos SDK that will serve as a cross-chain decentralized exchange (DEX). It uses an automated market maker (AMM) model that resembles the first iterations of Bancor (BNT) or Uniswap where THORChain's native token (RUNE) will be the base swap pair. This model allows traders to move between different asset pools using RUNE as a somewhat hidden intermediary. It also rewards liquidity providers (LPs), those that deposit or "stake" assets on either side of a liquidity pool, with a portion of trading fees. It uses an AMM model to facilitate cryptoasset swaps an independent cryptonetwork that aims to enable the exchange of assets across disparate blockchain networks in a non-custodial manner. Its protocol features a cross-chain bridge system (known as the Bifröst Protocol) to connect different chains. THORChain also uses an adapted version of Bancor's "smart tokens," which it calls Continuous Liquidity Pools (CLPs), to facilitate the exchange of assets. The key difference is that CLPs reward users for contributing to the liquidity in each pool. THORChain features a native token, RUNE, that owners can use to participate in the network or add to a liquidity pool. THORChain uses a series of core technologies to ensure the network functions as designed: Tendermint Continuous Liquidity Pools (CLPs) Bifröst Protocol Yggdrasil Protocol Tendermint THORChain is a Tendermint-based chain, which is the same architecture and consensus system first used by the Cosmos network. Tendermint employs its own BFT (Byzantine Fault Tolerance) consensus mechanism that relies on synchronicity. Therefore, like Cosmos, THORChain caps the number of validators (100 to start) in order to reach finality for each proposed block. It also supports a Proof-of-Stake consensus mechanism since Tendmint requires each Validator to have a weight on the network determined by the stake they hold. Continuous Liquidity Pools (CLPs) The THORChain team plans to implement an adapted model of Bancor's "smart token" to create what it calls Continuous Liquidity Pools (CLPs). This system incentivizes participants to supply liquidity in exchange for fees and RUNE rewards. Traders can then access and exchange with these token pools directly, which gives CLPs an on-going supply of liquidity. The protocol also tracks the ratio of RUNE to the asset held in each CLP, which creates an inherent on-chain price feed for individual assets. Bifröst Protocol The Bifröst Protocol is THORChain's cross-chain bridging system. The protocol leverages THORChain's Proof-of-Stake (PoS) validator set, the on-chain price feeds generated by CLPs, multi-signature (multi-sig) accounts to create and secure these bridges. Every bridge uses validating parties to verify transactions. But the multi-sig system randomly assigns validators to each transaction to limit centralization concerns. Each bridge is customizable, where the end-user determines the number of parties required to sign-off on a transaction (a three-of-four multi-sig arrangement is less secure but faster than a 20-of-21 schema). The Bifröst Protocol also uses the on-chain price feeds created by CLPs to give each bridge a security profile (how likely is a bridge to fail) and to identify and punish bridge validators that act against the network's rules. Yggdrasil Protocol The Yggdrasil Protocol is a sharding mechanism designed to help scale THORChain. Unlike more traditional sharding applications, which split items into horizontal components, the Yggdrasil Protocol uses a vertical sharding technique on entire chains. The team says this technique allows THORChain to apply sharding to cross-chain ecosystems, as opposed to sharding an existing chain. As for shard consensus, THORChain does not engage the full Validator Set to monitor each shard. Only a subset of validators will finalize cross-shard transactions. But the others will be able to monitor the consensus reached on every shard.