THORChain To Launch the RUNE Token on Binance Chain

THORChain

2019-06-25 — 5 min read

THORChain

THORChain is a decentralised liquidity network that aims to do three important things:

Build trustless and secure bi-directional bridges to any other chain.

Incentivise and unlock latent liquidity to power deep liquidity pools.

Allow instant asset swaps and trans-currency payments across any payment network.

To do this, THORChain must achieve the following aspects:

Anchor and connect to deeply liquid and secure chains with high economic activity.

Achieve a strong token distribution to ensure widespread liquidity incentivisation and increase decentralisation.

THORChain can be seen as a trustless Shapeshift, or a Cosmos-powered multi-chain Uniswap and will bring a number of measurable benefits to Binance Chain.

Binance Chain

Binance Chain is one of the most compelling ecosystems to build with because of its strong leadership, cutting edge technology and highly engaged community.

Additionally THORChain and Binance Chain share a common codebase — being both powered by Cosmos with Tendermint consensus. This makes them both compatible (being able to be connected via THORChain’s Bridging Protocol, as well as potentially the IBC Protocol being currently built by the Cosmos community).

By launching on Binance Chain as a BEP2 token, THORChain has an opportunity to achieve wide distribution prior to its mainnet launch in Q1 2020, build common tooling, and enhance the benefits to the ecosystem.

Building Common Tooling

THORChain is building a suite of tools that will allow Cosmos-powered chains to connect to any other chain in a trustless and secure way. THORChain is already the recipient of an Interchain Foundation grant, where the team is working with their development partner Swishlabs to build a two-way value transfer bridge between Ethereum and Cosmos-powered chains. Phase 1 of that project has already been shipped, which you can read about here:

Over the next 12 months the THORChain team will be releasing their highly-anticipated Bridge Daemon which implements the Bifröst Protocol. This tooling will be open-source and allow any Cosmos-powered chain to sync, connect and maintain secure two-way value-transfer bridges between Bitcoin (and all of its forks), Ethereum (and all of its forks and tokens), as well as most other protocols such as cryptonote coins (Monero, Loki, Graft) and Proof-of-Stake coins (Tezos, TON and Facebook Libra).

The Bifröst Protocol is unique because it uses observable economic incentives to ensure safety without hard security guarantees. Users will use bridges that are secure and bring liquidity; while liquidity will increase incentives and in turn ensure security. Bridges are always opt-in so validators can elect to participate in supporting only the bridges that match their risk-reward profiles. Some bridges (such as those to privacy coins) may not be supported by all validators due to increased jurisdictional pressure, which will reduce the bridge set and increase incentives in turn preventing exit race conditions.

Benefits for the Ecosystem

THORChain brings a large number of benefits to the Binance Chain Community.

Liquidity

THORChain is a decentralised liquidity network, paying out incentives for users to stake their existing assets in trustless liquidity pools. These liquidity pools in turn allow other users to swap their assets (trading, arbitrage or by payments) instantly with continuous liquidity. By connecting with Binance Chain, THORChain will see increased liquidity be provisioned for Binance DEX, without added risk and management for Binance Chain Validators.

Reduces Risk

As mentioned, THORChain reduces risk on Binance Chain validators to host coins that although the community would want, Binance Chain may be unable to provide a two-way peg for (such as most privacy coins). THORChain’s bridging protocol allows anonymous and safe hosting of redemption assets with a continually rotating bridge set that is geographically distributed with the power of rotating threshold signatures. This means that pegged assets can be maintained in THORChain liquidity pools without the risk of asset seizure or censorship. In turn this means that these assets can one day be used in the Binance Chain community without pushing risk to Binance Chain validators.

Improves User Experience

THORChain’s liquidity pools allow assets to be swapped instantly at fair market prices. This allows users to easily swap between assets in the process of arbitrage, trading and payments, improving the overall experience and increasing liquidity for the ecosystem.

Enables Decentralised Finance

The most important enabler of THORChain is that it allows decentralised finance for any Cosmos-powered Chain (Binance included) by solving for trustless, manipulation-resistant price feeds without needing oracles. Each of THORChain’s liquidity pools transmit a price feed that is extremely difficult to manipulate. If a liquidity pool is manipulated by a bad actor, they immediately open themselves up to permissionless arbitrage and will quickly be exploited by the free market. The more valuable the asset is, the more difficult it is to move the price away from the free market. You can read more about the economics behind this here.

Development Progress

THORChain has been under active research and development for over 12 months. Research began in June 2018 and a testnet was launched in Q4 2018. The first bridge was shipped in early Q2 2019. Mainnet launch is currently scheduled for Q1 2020.

Token Generation Event

Since THORChain will be a Proof-of-Stake network, it is necessary that it achieves wide token distribution prior to mainnet. The team plans to begin token distribution activities starting over the next 6 months, and then continuously for 5 years after mainnet launch:

Token Launch on Binance Chain

Successfully list on Binance DEX

Airdrops for trading and community

A Binance Chain Snapshot and Drop (hard spoon)

Validator block rewards

Liquidity emissions in staking pools

This will ensure the token achieves maximum distribution and ensures the validators are adequately decentralised. This will prevent sybil attacks on the network once launched, an important consideration considering the potential value of assets the network could hold.