The need for cross-chain liquidity has grown in line with the increase in blockchain networks. Thankfully, several protocols have emerged in recent years to address this need. For example, THORchain, a platform that first launched on Cosmos, aims to allow users to trade assets across blockchains in a decentralized way.
We recently published a first part of a beginner’s guide to understanding Thorchain. So, this article is the second in our multi-part series about THORChain. As said in our previous article, THORChain aims to make all crypto liquid. It seeks to achieve this by allowing users to trade non-native assets such as Ethereum and Bitcoin in a decentralized way.
The very unique lending design was recently proposed by @THORChain and I couldn't resist speaking about it.
Thread 🧵 pic.twitter.com/iXEe06pMHn
— DeFi Made Here (@DeFi_Made_Here) December 9, 2022
Now, let’s get to our final review of THORchain.
How Does Swaps Work on THORChain?
Swaps in THORChain use native assets. This is pretty simple. Let’s take a swap from RUNE to BTC as an example. So, the user sends RUNE into THORChain and BTC is sent out from one of THORChain’s vaults. The inbound gas is then paid with RUNE, it’s native token. Outbound fees are paid in BTC.
What is THORChain’s Bridge?
The THORChain network, among many things, serves as a DeFi hub to exchange cryptocurrencies from different chains. The Bifröst Protocol is THORChain’s cross-chain bridging system. It leverages a couple of THORChain’s features to create and secure bridges, which include:
- THORChain’s Proof-of-Stake (PoS) validator set.
- The on-chain price feeds generated by CLPs.
- Multi-signature (multi-sig) accounts.
So, bridges rely on validating parties to verify transactions. However, the multi-sig system randomly assigns validators to each transaction to limit issues with centralization. Each bridge is customizable. So, the end-user decides the number of parties needed to sign off on a transaction.
Unlike other blockchain bridging solutions, Bifröst adopts a guilty-until proven guilty approach to validator security. It does not assume fraudulent intentions from the start. Instead, it focuses on providing configurable levels of security.
How to Use THORChain’s Explorer?
Blockchain explorers work like Google for blockchain. They allow users to access information about transactions on different wallets. Explorers reveal information such as the amount transferred, the sender, and the recipient.
Source: THORChain’s Explorer
To use THORChain’s explorer, simply copy the address, TxID or block and paste it into the search box. Details of the transaction will be displayed.
Top Wallets that Support RUNE
Wallets are a convenient way to store your crypto assets. Your decision on a wallet will probably be influenced by how much you need to keep and what you plan to use it for.
The most secure way to store cryptocurrency with offline storage and backup is with hardware wallets, also known as “cold wallets,” like Ledger or Trezor. They can be more expensive and may require more technical expertise. As a result, they might be more appropriate for holding more RUNE for skilled users.
Finding the best wallet for your RUNE token can be tricky. But here are some wallets that support RUNE:
- Math wallet.
- Trust Wallet
- XDeFi wallet
Is THORChain a Good Investment?
Deciding on a suitable investment in crypto could be tricky. But THORChain ticks a lot of boxes, and many experts have positive views about it. However, in crypto, you always decide what’s good for you. So, we advise that you do your own research. And if you want to invest, be sure to know how much you are comfortable risking.
⬆️ For more cryptocurrency news, check out the Altcoin Buzz YouTube channel.
⬆️ Check out our most up-to-date research, NFT and Metaverse buy, and how to protect your portfolio in this market by checking out our Altcoin Buzz Access group, which for a limited time, is FREE. Try it today.