Investment Research Report: THORChain (RUNE) Ecosystem Analysis and Outlook

Investment Research Report: THORChain (RUNE) Ecosystem Analysis and Outlook
3 min read


On January 8, THORChain (RUNE) was launched on HotsCoin. THORChain is a decentralized cross-chain AMM trading protocol dedicated to decentralizing cryptocurrency liquidity. RUNE is currently open for trading on HotsCoin.

Summary
This report provides an in-depth study of THORChain (RUNE), which provides local and cross-chain liquidity to individuals, products, and institutions through its network of public nodes and ecosystem products. This report will provide a detailed analysis of its basic information, key events, project introduction, interpretation, economic model, investment institutions, team and future roadmap.

Token information
Circulation: 337,875,791 RUNE
Total supply: 482,562,668 RUNE
Circulation market value: $1,557,022,471.102
Fully diluted market cap: $2,223,778,494.36

key events
2021-07-22: THORChain suffered a hacker attack and the loss reached US$8 million.
2021-07-15: THORChain suffered a hacker attack and the loss reached US$5 million.
2021-04-13: THORChain is launched on the mainnet

Project Description
THORChain is a decentralized cross-chain AMM trading protocol created by anonymous cryptocurrency developers at the Binance Hackathon in 2018. The protocol is designed to allow users to trade tokens between different L1 blockchains through THORCHain, eliminating the need to trade through centralized exchanges. THORChain is designed to enable non-custodial, permissionless and decentralized transactions between chains.

Interpretation Project
Technology Architecture
THORChain is developed based on the Cosmos SDK, uses the Tendermint consensus mechanism, and is embedded in the TSS code base of Binance Chain. This design makes THORChain resistant to forks and close to instant finality, reducing the possible negative impact of forks and double-spends on the flow pool. In addition, THORChain uses the Threshold Signature Scheme (TSS) to ensure that nodes will not control user assets, improving privacy and reducing transaction fees.

Continuous flow cell (CLP)
THORChain's CLP is an important innovation, designing transaction fees as a function of slippage rather than a fixed percentage fee. This design makes arbitrageurs have to pay higher transaction fees while pushing up prices, thereby reducing LP's free losses. The design of CLP helps maintain the balance of the liquidity pool and prioritize transactions with the highest fees in the consensus protocol.

Token model
THORChain’s token $RUNE plays multiple important roles in the system, including liquidity provision, security, governance, and incentives. The allocation of $RUNE is reasonable, with protocol reserves accounting for the highest proportion, ensuring the robustness of the system.

Community and Team
THORChain has an excellent community culture, and core development members have transferred ownership of the code base to the community, embodying the spirit of a decentralized network. The team has high transparency, continuously provides development progress and regular development rhythm, and maintains close interaction with the community.

Brief description of competitive product disadvantages
ChainFlip: Supporting new blockchains is more difficult and time-consuming, with a larger attack surface.
PolkaSwap: Unable to handle spot native ETH and BTC exchanges.
REN: Encapsulated tokens instead of spot, there is a risk of losing anchoring.
economic model
Token distribution
Circulation: 19.8%
OP reserve: 10.5%
Community: 10.4%
Team: 10.0%
Seed investors: 5.2%
Protocol Reserve: 44.1%

Important functions of tokens
Node Binding: In order to prevent nodes from colluding and stealing LP/Swapper funds locked in the vault, nodes need to lock a certain proportion of the $RUNE collateral.
Liquidity provider: $RUNE serves as the basic trading pair and serves as the basis for external assets in the liquidity pool.

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