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What is RUNE? How to Buy the Token Behind THORChain
THORChain is a completely autonomous and decentralized liquidity network designed to restore the ethos of decentralization to the crypto and blockchain space. The platform is built such that volunteers can deposit native assets into liquidity pools and earn yields while at it. Users looking to exchange crypto assets from different networks can therefore access the provided liquidity without losing custody of their cryptocurrencies.
This means that using THORChain, a user can exchange Bitcoin for Ethereum without going through a centralized exchange or using pegged assets. THORChain’s native token is RUNE and we’ll be taking a closer look at the up-and-coming coin below.
RUNE Pros & Cons
Pros
Facilitates a decentralized network
Interoperable and available on multiple blockchains
Fuels the cross-chain decentralized exchanges on the THORChain network
Incentivizes liquidity provision
Non-custodial and yield generating token
Cons
Founded by an anonymous team
THORChain has been the target of hacks in the past
Our Favorite Exchange for Buying RUNE
- Easy sign-up process
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RUNE Ratings
Developer Engagement
- Rating: High
- Reason: The interoperability of the THORChain network has attracted a number of firms such as Viewblock, XDeFi, and Delphi Digital to mention a few who are actively engaged in improving the functionality of THORChain.
Disbursement
- Rating: High
- Reason: 50% of the token’s supply is set to be emitted to network participants.
Liquidity
- Rating: High
- Reason: With high APYs on offer, various liquidity providers are migrating their capital to THORChain’s vaults to gain from providing liquidity on the network.
Network Speed
- Rating: Medium
- Reason: ITs network is built on Tendermint which can handle up to 10,000 transactions per second.
How does THORChain work?
At its core, THORChain operates like any other decentralized exchange (DEX) would. You can compare its functionality to DEXs such as Uniswap or SushiSwap. However, THORChain goes beyond the bounds of a regular DEX. Unlike most AMM-based DEXs that only allow users to swap tokens that live within the same blockchain, THORChain is designed for swapping or exchanging cryptocurrencies that live on different blockchain networks.
The THORChain experience is made possible by the Cosmos SDK and Tendermint protocols. Cosmos is an open-source ecosystem of blockchains and Tendermint is a tool that provides developers the rudimentary building blocks for creating decentralized ledgers that have their own consensus protocol independent of the main network.
What’s more, developers don’t have to build from scratch. Therefore, with Tendermint, developers can create decentralized applications in the shortest time frame. Thanks to Tendermint’s BFT model, the networks created by developers using THORChain’s Tednermint-based model can reach consensus even if up to one-third of the nodes fail or malfunction. This makes it easy to create blockchain applications in a short time without losing functionality or security.
A functional and secure consensus protocol that cuts across all the blockchains built on top of THORChain is important as all THORChain nodes (THORNodes) have to agree on the validity of transactions coming from disparate blockchains. Consensus among the THORNodes enables them to simultaneously run disparate blockchains on the THORChain network such as BTC, LTC, and ETH. This enables users to send native tokens to native wallets on the THORChain network.
Although the THORChain network is autonomous and decentralized, there is an anonymous core team that works on developing and managing THORChain’s critical infrastructure. The platform is also supported by the larger THORChain community that contributes by developing additional tools, creating frontend infrastructure, and other integrations that make the network possible.
What is the RUNE Token?
The TUNE token is the native cryptocurrency of the entire THORChain ecosystem.
It has a set maximum supply of 500,000,000 RUNE tokens and is used for a variety of functions that we will discuss below.
Where to Buy RUNE?
You can buy RUNE on multiple exchanges including the following:
- Binance
- ProBit
- Gate.io
- WazirX
- Crypto.com Exchange
Advantages of RUNE Token
First, RUNE is used as a liquidity pool pair for all native tokens from foreign blockchain networks linked to the THORChain network. Therefore, liquidity providers don’t have to submit liquidity pairs as is the case with most DEXs.
Conventional DEXs rely on volunteers to act as liquidity providers by providing two tokens in a ratio of 1:1 to a smart contract enabled liquidity pool. While this mechanism has enabled decentralized exchanges to run autonomously, it features intrinsic risks such as impermanent loss, and liquidity fragmentation.
RUNE is also used to secure the THORChain network as THORChains is secured by a variation of Proof of Stake called Proof of Bond. The PoB consensus protocol requires nodes to commit a RUNE bond of 1 million RUNE tokens to validate transactions in the network as well as participate in other activities in the ecosystem. If the nodes become malicious to the network, their bond is deducted proportionally to the amount of damage they cause. This incentives good behavior across the network.
Transaction fees on THORChain are paid in RUNE including trading fees for all swaps. RUNE also serves as the network’s governance token as each RUNE token equates to a vote.
Disadvantages of RUNE
The main deal-breaker for most crypto enthusiasts concerning RUNE is the fact that the team backing the project is anonymous. While this can present a red flag for some, multiple institutions are jumping on the RUNE bandwagon given the technology’s unprecedented capabilities.
Also, the project is based on a largely untested consensus protocol that could be risky to the entire network going forward.
THORChain Frequently Asked Questions
Well, technically, only the protocols that connect to the THORChain network operate as DEXs. The network as a whole however is an open-source and permissionless liquidity network that allows anyone to tap into its infrastructure and build a variety of decentralized finance applications.
THORChain is considered a good investment thanks to the fact that its network enables the interoperability of blockchains. This can allow the masses to jump into the crypto and blockchain bandwagon without the friction caused by existing challenges. If its technology stands the test of time, and more volunteers show up to provide liquidity, validate and trade on the platform, it will only be one of DeFi’s biggest projects.
THORChain network features more than 100 anonymous and public node operators who together power the entire ecosystem. Given that more than $60 billion is currently locked in DeFi protocols across the board, the revolutionary use cases for the THORChain network are unprecedented.
Yes, THORChain’s RUNE token is featured on Coinbase. Although there are no direct ways to buy RUNE with cash, you can exchange crypto assets such as BTC or USDT for RUNE on Coinbase.
