THORChain is a decentralized liquid protocol. Users deposit native assets in to liquidity pool to earn a yield. The network is 100% autonomous and decentralized.
RUNE is one of the important positions in the THORChain ecosystem. It is an ERC20 coin. The utility of RUNE creates value for the network.
It is important for solvency of a network to be truly verifiable. When it comes to a decentralized network, anyone should be able to verify the solvency of the on chain network. The solvency on the network is black and white and it is possible for anyone to verify it.
When monitoring the network activity, there is more to be seen apart from price action. The explorer gives a clear idea of Assets, Network, Nodes, TXs, Members, and API explorer. In the Network summary users can check the total pooled, reserve, active bonded, standby bonded, total capital, active node count, standby node count, pool share factor, standby node count, pool activation countdown, node APY, pool APY, Next churn height and a range of other stuff. Also, users can monitor the block reward, bond reward, and pool reward.
Users need to understand if the RUNE circulating supply that is locked in THORChain is deterministic.
“If 80%+ of RUNE gets locked into THORChain pools, by economic design, RUNE’s market cap will be minimum 3X the value of all non-RUNE assets locked into THORChain. Some call it deterministic RUNE.”
Users who are new should understand deterministic RUNE, “The more (ᚱ) RUNE is locked into THORChain (80%+), the more its deterministic value becomes accurate. (ᚱ) RUNE also becomes more stable, transparent and manipulation resistant.”
For those who are trying to understand if THORChain Protocol is an exchange, it is important to understand that the interface which connects to the THORChain protocol are technically the exchanges.
The BEPswap, ASGARDEX, community-written apps, interfaces or even bots i.e Mjölnir Telegram bot are the interfaces which can be deemed to be the exchanges.
THORChain is a permissionless liquidity network, where anyone will be able to tap into it to provide swapping or pooling services and also earn fees from it. Important to note that a network of 99+ distributed, public and anonymous nodes power the whole liquidity network.
With a clear understanding of how to use liquidity pools, users can earn greater, stable and or less risky yields. Users should identify the most profitable liquidity pool, add funds to liquidity pools asymmetrically and use different strategies to earn greater stable and risky yields to further track returns.
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