A brief description about THORChain

Gentlemen Capital
5 min readAug 3, 2022

Thor Chain is a protocol that makes it possible to instantly swap cryptocurrencies between blockchains.
It is designed to function as a back end for the next generation of cross chain decentralized exchanges. The Thor Chain ChaosNet went live in summer of 2020, after almost 2 years of development. It became the backend for BepSwap Dex which is the first decentralized application to launch on Binance Smart Chain in Sept 2020.
The multichain Chaos Net went live last year and made it possible to swap BTC, ETH, Litecoin and other cryptocurrencies in their native forms, without wrapping them. This can be done using the ThorSwap interface and AsgardDex web interface and AsgardDex desktop client which acts as front end for Thor Chain multichain Choas Net protocol.

It has been founded in 2018 at Binance Hackaton by 18 self organized developers, so technically has no founder. Many of Thor Chain resources were created by the community, like their website.
Development updates are coming weekly on Medium and Treasury reports are published every month.
Thor Chain code is open source and has been audited 7 times by Certik and other well known audit firms.
They have raised 2mil$ between Seed round and Private round and another 250k on their IDO on Binance.

The Thor Chain community is building also various Dex interfaces built on Thor Chain protocol
Thor Chain is build using Cosmos SDK and is using a PoS consensus algorithm based on Tendermint.
Thor Chain protocol has 76 validator nodes and theoreticaly, they can support around 360 validator nodes.
Each node must stake a minimum 1mil RUNE(Native token), which is around 2.5 mil$ at this moment.
Thor Chain nodes are expected to remain annonymous and this is why delegating RUNE is not allowed.
Validator nodes rotate every 3 days which facilitates the security of the protocol and secures any future updates. They are responsible of witnessing transactions on different blockchains and sending and receiving cryptocurrencies stored in various wallets that they collectively have custody on.
For example: you want to trade BTC with LTC using Thor Chain. You will send your BTC that you want to trade for LTC in a BTC wallet which is in the custody of Thor Chain Nodes. They will see the transaction is taking place on BTC blockchain and automatically send the corresponded LTC from their LTC wallets to the wallet address that you provided.
An interesting thing on Thor Chain is that the validators are facing penalties if they are trying to steal from Thor Chain Vaults.

How is this working?
To be sure that the penalties are higher than the amount that can be stolen from the Vaults, Thor Chain nodes are incentivites by stake RUNE, so their staked RUNE is twice the token value locked in protocol by liquidity providers. All transaction fees are paid in RUNE.

In contrast with other Decentralized protocols, all cryptocurrencies supported by Thor Chain are traded against the RUNE coin. This is because it will not be efficient to create a pool for every possible crypto currency pair.

For the web version of AsgarDex, we don`t need a wallet extension, you can create a wallet straight on their web and additionaly, they will create addresses for all the crypto currencies associated with Thor Chain. For all swapping pairs, you need to have at least 3 RUNE in your wallet to finalize the transaction.
In December 2021 they launched Stagenet testnet, which makes it possible to test their protocol under real economic conditions. Also, in December they launched the ThorWallet and in January this year they started to test Dogecoin, Terra and Synthetic assets on its Stagenet.

RUNE Token

It came on BEP20 at the beginning of 2019 with an initial max supply of 1 billion, but at the end of 2019, it had been reduced to 500 mil RUNE.
Distribution:
Seed — 6% (30mil tokens) — 4 mil were distributed immediately. The rest of the tokens remain locked until mainnet launch and then distributed 20% 3 months.
Private sale — 14% (70 mil tokens) — 50% of this pool was unlocked upon distribution to provide enough liquidity on Binance Dex, and the other 50% unlocked 1 week after the close of Thor Chain IDO
IDO — 4% (20 mil tokens) — 13 mil of tokens remained unsold, they were burnt and no vesting period.

Team and Advisors — 10% — unlocked until mainnet launch and the distributed 20% every 3 months
Service nodes and incentives— 50% — validator rewards and liquidity pool provisioning incentives
Operational Reserve — 13% — monthly vesting over 40 months.
Community Reserve — 12% — emitted over 2.5 years through the RUNEVault rewards program and airdrop events.
RUNE circulation supply has increased with 105 mil tokens, a 50% increase of its last circulation supply, which is quite high and if we make a quick calculation with an estimate price of 3.5$ per token, we have around 367.5 mil$ in sell pressure. On the demand side we have Thor Chain nodes which needs to buy and stake a sufficient amount of RUNE in Thor chain vaults, Liquidity providers, and Thor Chain users who need RUNE to complete their swapping transactions.

The opinion of many about this type of tokenomics is that it might be best suited for crypto since at any given time, the validators must be staking RUNE twice the value locked by liquidity providers(tell us your opinion in the comment section).
The ThorChain community created a calculator that simulate how much RUNE worth assuming a certain TVL.
ThorChain team is developing a decentralized stablecoin and a cross chain DeFi protocols.
There are rumours that behind ThorChain is Binance.

Thor Chain has no ROADMAP,

Thorname Service will be activated — something that is required for ThorChain to add support for Monero(which by the way it was looking since long time for something like ThorChain on the market).

Synthetic asset activation
The Mainnet launched at the end of June.

“Supposedly, certain regulations will come into, sooner or later, and centralised exchanges have no future. Since Binance can’t change the front-end, due to the large number of users it has, they could most likely change the back-end to a dex protocol like ThorChain, which is interoperable, cheap, fast and able to support every cryptocurrency in existence. An anonymous project, with almost no funding or community, suddenly launches its token on Binance Chain and manages to grab dozens of validators from all over the world, with a big price to run a protocol, which happens to be the perfect solution for the world’s largest exchange(Binance)”

A personal opinion: when the regulations will come, they will, for sure, come for hot and cold wallet as well.

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