Robin Holdings
March 16th, 2022
Decentralization has been key within blockchain technology, its development and popularity. Thanks to the DeFi (Decentralized Finance) world, anyone with internet access can make use of financial services, such as receiving loans, obtaining returns, exchanges between tokens, among other services.
Decentralized Exchanges (DEX) are digital platforms that work like a traditional exchange but using a smart contract. Eliminating intermediaries, without the need for KYC and increasing security and transparency. The disadvantage of DEX, unlike a centralized exchange, is that they are not used to exchange cryptocurrencies from different blockchains, for example, you cannot exchange Bitcoin for Ethereum.
Thorchain makes it possible to exchange cryptocurrencies directly between chains, in the same way as a Centralized Exchange (Binance, Coinbase, etc.) but in a decentralized way, without custodians and without wrapping; making it the first Multichain DEX. Also, it allows you to obtain returns on your assets, being an LP (liquidity provider).
An LP is the user who deposits assets (BTC, ETH) to liquidity funds and in exchange receives returns (RUNE), these returns come from the transactions made by traders. Traders are the users who want to exchange assets, for example, deposit ETH and receive BTC. So that these two groups can make the exchange, instead of sending the funds to a central custodian, they send them to a Node Operator, which are users that manage nodes, these nodes together form the THORChain Node. The funds, instead of being controlled by a central server, are controlled by different node operators that validate the transactions.
Rune is the token used by the platform, which in addition to being the utility token is the token used for the security and governance of the platform.
Despite being a great solid project with a lot of potential, there is still work to be done, as the mistrust of some users increased in the last year due to the hacker attack that occurred in the summer of 2021. More than 13 million dollars were lost and suspended the network for a few months, affecting its price and reputation.
Thorchain is a great project with a great team and a great community, who continue to work, increasing the chains, improving the network and user security. Without a doubt, its potential and fundamentals will place it higher and higher in the ranking by market capital.
