ThorChain has recently been out of the news, prompting investors to doubt whether they should purchase RUNE, the company’s native token. The asset’s price hasn’t been performing well, but there may be a chance to purchase the dip and get in on something that’s about to take off. We’ll look at ThorChain’s operations and recent price movements in the sections that follow.
ThorChain is a novel blockchain protocol. It is is a cross-chain decentralized exchange built on the Cosmos Software Development Kit (SDK) (DEX). ThorChain employs the automated market maker (AMM) model, which is used by several other major exchanges. Its native token, RUNE, serves as the basis for its swap pair.
ThorChain was established in 2018 to address some of the problems associated with centralized cryptocurrency exchanges.
There was a growing belief at the time that decentralized exchanges and non-custodial wallets were the way of the future. As a matter of fact, ThorChain’s developers set out to create an impartial blockchain capable of connecting to external structures and allowing cross-chain transactions.
Most DEXs suffer from insufficient liquidity. Buyers tend to favor trading platforms that do not expose them to the risk of losing money due to slippage. However, they may not have enough money to prevent slippage, which is their responsibility.
ThorChain is attempting to address this issue by utilizing Continuous Liquidity Pools (CLPs). These pools provide resources to traders, enabling them to obtain the liquidity they require without having to contact other traders.
ThorChain’s AMM framework enables cryptocurrency swaps via an independent network to improve non-custodial asset exchanges across disparate blockchain networks. To connect different chains, the protocol employs a cross-chain bridge system, ensuring seamless and quick exchanges.
Buying RUNE increases ThorChain’s liquidity
They can also purchase RUNE for network participation and governance. Traders who provide liquidity to the pool are rewarded with RUNE, and token holders can stake their RUNE to earn fees from other users’ pool access.
ThorChain has grown in popularity significantly since its inception in 2018. The protocol isn’t as well-known as some of the biggest names in decentralized finance (DeFi), but there’s plenty to be excited about.
RUNE has had a successful year. The asset began trading in 2021 at $1.24 and quickly rose through successive highs. RUNE’s price had reached an all-time high of $21.32 by May 19. It’s worth noting that this comes just days after several large-cap assets began to lose value as a result of the downturn. However, the gains did not last indefinitely; RUNE was eventually affected by the downturn, and its price dropped significantly. In just four days, RUNE had fallen 71.5 percent from its all-time high to $6.073.
The downturn didn’t stop there. RUNE, on the other hand, attempted to make a comeback, but successive slumps hammered its price, and it fell further into the red. The latter was a direct cause of the market’s downturn during the month’s very last week.
Things, however, appear to be improving. As of last month, RUNE’s worth has nearly tripled, with the stock’s one-month chart showing a jump from $3.42 to $9.97. This is a 191% increase over the previous month.
The RUNE is actually worth $9.98, a decrease of 11.48 percent over the last 224 hours but an increase of 22.18 percent over the last week.
RUNE still holding out functionally
Both the stock’s 20-day and 200-day moving averages (MAs) of $8.48 and $8.64 are trading above their respective 20-day and 200-day MAs. RUNE’s relative strength index (RSI) has dropped to 60.26 as the market currency corrects.
With the asset rapidly approaching overbought territory, there may be an opportunity to purchase RUNE around the corner.
In terms of fundamentals, the asset isn’t doing much. ThorChain was hacked twice in a week last month, losing $7.6 million on July 16 and another $8 million on July 23 to a possible white-hat hacker. Users have the assurance that the platform will compensate them.
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