Thorchain’s native coin RUNE is currently under the top 100 coins in terms of marketcap. The protocol has achieved some impressive milestones in the past year for which reason we will take a deeper lock into what Thorchain is and why you should know about it.
What is Thorchain?
Thorchain is a decentralized and autonomous cross-chain liquidity protocol that allows users to swap crypto assets in a permissionless setting.
Thorchain makes use of an automated market maker (AMM) mechanism similar to the early versions of Uniswap (Uniswap) or Bancor (BNT), with Thorchain’s native token (RUNE) serving as the basic swap pair.
Automated market makers (AMM) are decentralized exchanges that aggregate user liquidity and employ algorithms to price the assets in the liquidity pools.
It uses the Cosmos SDK to create an independent blockchain that will act as a cross-chain decentralized exchange (DEX).
Why is Thorchain impressive?
Here are the list of milestone Thorchain achieved:
1. Total Value Locked
A $1B in TVL (Total Value Lock), consists of the assets in its liquidity pools and the $RUNE bonded by nodes that bolsters the network’s security. In the past, the protocol’s liquidity pools included limitations to safeguard the network and its users. Giving it a new high of total value lock.
2. Swapping reaches new heights
Swapping resumed and liquidity reached new heights, topping $500M in March, after the network was reopened in July 2021 as a result of the exploits.
The volume of swaps also increased, reaching over $2B, along with the surge in liquidity.
3. Trading Volume
In the past, $BUSD has had the highest trading volume, followed by $BTC, $BNB, & $ETH.
April recorded an ATH in swap volume after just 11 days and about $1B in activity.
4. Top 6 Assets
In decreasing order, the top 6 network assets with the deepest liquidity pools are $BTC, $ETH, $BUSD, $LUNA, $UST, & #BNB.
It is not unexpected that $BTC & $ETH lead in terms of asset depth on Thorchain given that they are the biggest & most liquid assets in the entire cryptocurrency market.
5. High APY
Since the year’s inception, the average annual percentage yields have all been double digits, giving the increase of:
+BTC 18%
+BNB 40%
+ETH 20%
+BUSD 20%
+LUNA 18%
+UST 44%
The swap and block reward costs are factored into the APY.
6. More Nodes
To meet the previous active node cap of 100 nodes, more than 60 nodes have come online.
The cap for active nodes was raised to 120 at the beginning of April by vote.
Each churn cycle, nodes will be gradually added to the active network until the limit is achieved.
7. New Developments
Thorchain continues to develop and move closer to the Asgard Exchange, despite a few roadblocks that have appeared along the way.
Final Thoughts:
Thorchain is indeed a great project to invest in. Despite having big competition between other similar projects.
They still play a big role for being an AMM(Automated Market Maker) mechanism.
