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What is THORChain?

THORChain is a cross-chain decentralized exchange created with the Cosmos SDK (DEX).

What is THORChain? iBase Trading.
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THORChain is a cross-chain decentralized exchange created with the Cosmos SDK (DEX). It employs an automated market maker (AMM) approach similar to the early versions of Bancor (BNT) or Uniswap, with THORChain’s native token (RUNE) serving as the essential swap pair.

Using RUNE as a sort of hidden intermediary, this concept allows traders to travel between multiple asset pools. It also pays a percentage of trading costs to liquidity providers (LPs), who deposit or stake assets on both sides of a liquidity pool.


AMM Model Enabled to Facilitate Crypto-asset Swaps

The Bifröst Protocol is a cross-chain bridge technology that connects two separate chains. It is a self-contained crypto network that enables non-custodial asset trading across multiple blockchain networks. THORChain employs Continuous Liquidity Pools to make asset trades easier, an enhanced version of Bancor’s smart tokens (CLPs).

The main difference is that CLPs compensate users for contributing to each pool’s liquidity. The RUNE native token on THORChain allows users to engage in the network or contribute to a liquidity pool.


The THORChain project launches in 2018 on the premise that relying on centralized exchanges to transfer crypto-assets between blockchains was flawed. Long-term solutions included non-custodial discussions (DEXs), also known as decentralized exchanges (NCXs). As a result, the THORChain team created an independent blockchain capable of bridging to external networks and facilitating cross-chain transfers, much like a DEX.

Finding sufficient liquidity is frequently a problem for DEXs. Traders prefer platforms that do not suffer from slippage. However, these same traders provide the liquidity necessary to prevent slippage in the first place.

As a result, the THORChain team intends to use an adapted model of Bancor’s smart token to create what it refers to as Continuous Liquidity Pools (CLPs). These pools of available assets provide traders with liquidity without the need to locate or contact another buyer or seller.

THORChain also rewards users who contribute tokens to a liquidity pool with RUNE (the network’s native token). At the same time, token owners can stake their assets and earn the fees collected from other pool users.

Tendermint BFT (Byzantine Fault Tolerance) is the consensus mechanism in THORChain because it is a Tendermint-based chain. For Sybil resistance, it also makes use of Proof-of-Stake (PoS). A validator system can stake RUNE tokens to run network nodes and validate transactions in the PoS element. Token holders can delegate to validators in THORChain, which keeps validators in check and allows delegators to receive a portion of each block reward.

The mainnet expects to launch in 2021. BEPSwap, an AMM on Binance Chain, has also been found.

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Steven Alvarez has 10 years of experience trading various assets. He was first introduced to cryptocurrency in 2011 and was immediately hooked. Aside from analyzing charts, Steven enjoys running and cycling.