ThorChain is a decentralized liquidity network and facilitates cross-chain liquidity pools with no pegged or wrapped tokens. Its core use case, is to create a decentralized network which can connect to any blockchain, which will be available to anyone and anyone can contribute to the network, Along with that it has to be stay online always, and allow users to have control for their assets instead of an individual entity.
Core of this project is THOR Blockchain, which is based on Tendermint & Cosmos-SDK, and works on Proof of Stake consensus model. At front end they have an exchange by the name of ASGARDEX. Which is a decentralized, non-custodial and cross-chain exchange. Where user can exchange their cryptos with another in permission less manner and liquidity providers can provide liquidity to earn in multiple ways. RUNE is the native currency. It powers the entire ecosystem and provides the economic incentives required to secure the network. It has fixed supply of 5 Billion.
ThorChain connects to different blockchain using “one-way state pegs” protocol. This means that no assets need to peg or wrap, only state of the transaction of external blockchain will be synced with ThorChain, and not every transaction, only those which are related to ThorChain. And for this purpose, they use cross-chain connection by the name of Bifrost.
ThorChain is managed by a large group of nodes. To run a node, you need to create a bond, which is like sending RUNE into their primary vault. As more as RUNE you bond, your chances to be selected as active node increases.
Under Network, we have vault managers as well. Vaults are basically to hold assets, each connected chain has one primary vault to keep incoming assets and multiple secondary vaults for sending assets out. When liquidity providers add assets to the liquidity pool, they send assets to primary vault address. When it comes to taking assets out from the network, like withdrawal or an exchange, secondary vault comes in usage by the network.
ThorChain maintain pools of assets which contain an external asset, like Bitcoin, Ethereum, xrp, etc and RUNE which is the native currency of ThorChain. This means that all external assets are linked via RUNE which makes it possible for the network to know the price of any external asset. ThorChain to make a reliable way to make people act to keep the system secure and they achieve it by using a reward system and the Incentive Pendulum and to keep the balance of assets correct.
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