THORChain (RUNE) is a settlement layer built to cash in on cross-chain infrastructure. They claim THORChain allows users to swap assets between blockchains directly from a wallet.
THORChain users make money by earning yield (interest) on assets. They claim THORChain can provide Cross-Chain Liquidity to support to support Cross-Chain Swaps and Exchanges. Moreover, they claim THORChain can function as a Cross-Chain savings account.
Interestingly, THORChain is also a Cross-Chain Aggregator. A Cross-Chain Aggregator uses algorithms to find the cheapest and fastest paths between blockchains.* Theoretically, a Cross-Chain Aggregator can execute orders at a cheap price on several decentralized finance (DeFi) protocols at once.
How THORChain (RUNE) works
THORChain (RUNE) is a settlement layer. A settlement layer is an extra layer they add to a blockchain.
The settlement layer facilitates swaps between blockchains. They claim THORChain facilitates swaps between Bitcoin (BTC), Ethereum (ETH), BNB Chain (BNB), Avalanche (AVAX), Cosmos Hub (ATOM), Dogecoin (DOGE), Bitcoin Cash (BCH), and Litecoin (LTC). They claim anybody can swap native assets between blockchains THORChain supports. Moreover, they claim anybody can harvest yield from THORChain swaps.
The native token RUNE secures THORChain. They claim RUNE accrues more value as users deposit more assets in THORChain’s network.
What Value Does THORChain (RUNE) offer?
THORChain offered a Total Locked Value of $267.5 million, a Total Liquidity of $117.5 million, $150.1 million in Total Validator Bonds, a Total Volume of $11.8 billion, Total Pool Earnings of $27.5 million, and a 24-Hour Trading Volume of $49.1 million on 22 August 2023. Plus, THORchain had a Total Swap Count of $13.01 million, 76,700 Unique Swappers, and 86 Active Validators on 22 August 2023.
They claim THORchain supported a Total Volume of $20.458 million in swaps on 23 August 2023. There was an Asset Volume of $1.647 million, a RUNE Volume of $1.934 million, a Synthetic Asset Minting Volume of $8.346 million, and a Synthetic Asset Redemption Volume of $8.532 million on 23 August 2023.
THORchain had $118 million in Total Value Locked in pools on 23 August 2023. In detail, THORChain’s Bitcoin Pool had a Volume of $15 million, a depth of $47 million on 23 August 2023. The Ethereum (ETH) had a Volume of $11 million and a depth of $22 million on 23 August 2023. The BNB (Binance) Pool had a Volume of $2 million and $7 million on 23 August 2023.
The Ethereum/USD Coin (USDC) pool had a $5 million Volume and a $6 million Depth on 23 August 2023. The Ethereum/Wrapped Bitcoin (WBTC) Pool had a Volume of $1 million and a depth of $5 million on 23 August 2023.
The Ethereum/THORChain Pool had a Volume of $310,000 and a depth of $4 million on 23 August 2023. Other pools had a Volume of $8 million and a depth of $27 million on 23 August 2023.
THORChain reported a Liquidity Earning of $46,038 and a Bond Earning of $37,394 on 22 August 2023. THORChain reported a Total Change of -$15,427, an Add Volume of $21,817, and a Withdrawal Volume of -$37.244 on 22 August 2023.
How THORChain (RUNE) Processes transactions
THORchain uses a Trust Minimized Infrastructure to process transactions faster. To explain, Trust Minimized Transactions process transactions without verifying users’ identities and transactions. Instead, they just process the transaction.
I think this could get THORChain in trouble with financial regulators. To explain, Know Your Customer (KYC) regulations require financial institutions to identify all customers or clients. The USA Patriot Act of 2001 requires KYC in the United States. In particular, The Patriot Act requires financial institutions to conduct Customer Due Diligence, Customer Identification, and Enhanced Due Diligence.
The Financial Industry Regulatory Authority (FINRA) Rule 2090 requires broker-dealers to identify all clients and keep records of all transactions. I think Trust Minimized Infrastructure could violate Rule 2090.
THORChain (RUNE) assets and swaps
They claim users can swap assets on THORchain without using wrapped tokens.
To explain, wrapped tokens are synthetic assets, represent another assets. For example, Wrapped Bitcoin (WBTC) is an ERC-20 token that represents Bitcoin. Notably, THORChain maintains a Wrapped Bitcoin pool.
They claim THORChain is non-custodial so users can maintain self-custody of funds. I cannot see how this will work. Yet they claim, THORChain Liquidity provides funds that are always solvent, verifiable, and visible. I am skeptical of this. It sounds like the derivatives that triggered the 2008 financial crisis.
Plus, they offer Savers Vaults that allow anybody to provide liquidity to THORChain and earn profits from swap fees. I think this sounds like a Savings Account which makes THORChain an unregulated bank. I think that will attract regulators’ attention at some point.
They claim THORChain provides infrastructure for TrustWallet, Thorswap, ShapeShift, XDEFI Wallet, THORWallet DEX, and RANGO Exchange.
What Does Mr. Market Think of THORChain (RUNE)?
Mr. Market likes THORChain (RUNE). For example CoinMarketCap named THORChain the 62nd largest cryptocurrency and gave it a $1.62 Coin Price on 23 August 2023.
CoinMarketCap gave THORChain a $552.639 million Market Capitalization, a $97.256 million 24-Hour Market Volume, and a $112.844 million Total Locked Value on 23 August 2023. They base those numbers on a 4.838 million Total Locked Volume Market Cap, a Circulating Supply of 340.387 million RUNE, a Total Supply of 485.746 million RUNE, and a Maximum Supply of 500 million RUNE.
Thus, THORChain offers some value. Speculators are using it. However, I recommend speculators avoid THORChain because I think regulators will shut down at some point. Like many DeFI solutions, THORChain is trying to ignore financial regulations which will destroy it.
*https://www.leewayhertz.com/cross-chain-dex/#:~:text=Cross%2Dchain%20DEX%20aggregators%20use,tokens%20on%20different%20networks%20quickly.
*https://www.investopedia.com/terms/k/knowyourclient.asp
 make money from Cross-Chain Yield?){kind=link}