Decentralized exchanges (DEXs) are all fun and good, if not also revolutionary. Although influential within their own respective ecosystems, in the grand scheme of things, they mean little if they continue to remain isolated within a cryptocurrency's own particular blockchain; Uniswap on Ethereum, Binance DEX on Binance, Yolo on EOS, Vexchange on VeChain, etc.
Users who want to swap tokens or provide liquidity to earn passive income would have to hop on over to another ecosystem, use their specific and compatible DEXs and tokens separately, even have separate wallets. Wouldn't it be great if there was a DEX out there that can connect all of these different blockchain ecosystems and allow users to easily and safely cross networks to swap tokens or provide liquidity?
Well, it turns out that there is such a protocol, and it is called THORChain. A chain-agnostic DEX, it favors no specific digital asset or blockchain and allows users to easily move across different blockchains and swap tokens, provide liquidity and other activities. It also helps to mitigate the issue of impermanent loss and provides a mechanism against manipulation on on-chain price feeds. Sounds cool, right?
ThisTHORChain Price Prediction article will first examine the price forecast for this protocol's native token, RUNE, on both a short and long-term basis to conclude if it's worthy of being added to your portfolio. Next, we will examine the project's unique features, what makes it different, and how this DEX is at the forefront of building bridges between isolated blockchain ecosystems.
THORChain Historical Price Analysis
Since its Initial Dex Offering (IDO) back in July 2019, the price of RUNE first appeared on CoinMarketCap on July 24, 2021, at $0.0154. Even though its mainnet was only launched in January of this year, the price for RUNE began to slowly increase throughout 2019 and 2020. By November 9, 2019, the price had doubled.
Even though the price continued to slowly increase, it wasn't until the end of May 2020 when it really began to spike. By August 30, 2020, it was at $1.11 before it began to rapidly lose in value. Throughout the month of October and early November, the price remained somewhere between $0.30-$0.50. On November 4th, it began to rapidly increase again. It ended the year 2020 at $1.15.
The new year started very well for the RUNE token as its value continued to increase throughout January. By February 1, 2021, it was at $3.84.
Current Price, Market Cap, & Supply Details
At the time of writing this article, the price of RUNE is $3.84. THORChain's current market cap, according to CoinMarketCap, is at $590,881,144, which places it in 59th place in the entire crypto market. There are currently 158,432,088 RUNE tokens in circulation, with a total supply of 500,000,000.
The RUNE token experienced a +7.66% increase over the last 24 hours and a +57.63% increase over the last 7 days.
THORChain (RUNE) Future Price Forecast Predictions
The Price Forecast for THORChain's RUNE, according to several sources, looks to be highly positive in both the short and long term. Wallet Investor expects the price to increase up to +60.98% ($6.18) within just one year. By 2025, that percentage increase would be +250%! Digitalcoin also predicted a very positive price outlook for RUNE. It also forecasted a +250% price increase within the next five years.
While the price forecast for both Wallet Investor and Digitalcoin are positive, Tradingbeast's forecast, on the other hand, actually predicts a slight decrease in price throughout 2021 and early 2022. However, that immediately changes sometime in October of 2022. Thus far, it only managed to calculate up to the year 2024. However, even by then, it has predicted the price of RUNE to be an average of $5.818 by the end of 2024.
Short Term Forecast
Long Term Forecast
THORChain Price Prediction 2021
2021 is forecasted to have a positive increase in value for RUNE. Although the price will vary between months, its annual average price is expected to be $5.43.
THORChain Price Prediction 2022
The price upward in value is expected to continue throughout 2022, albeit less so than in 2021. The average price is expected to hover around $6.69, only slightly more than the previous year.
THORChain Price Prediction 2025
By the time 2025 rolls around, the price increase is expected to be much better. The average price is expected to be around $11.80, with January and July experiencing the highest increase in price thus far.
Is THORChain a Good Investment?
After looking at the price prediction and the project's fundamentals, the future looks bright for both the project and any RUNE investor. With the current bull market in full swing and the project's developers still adding on more features and upgrades, it is with much confidence to say that THORChain will continue to be seen as a valuable asset in the rapidly growing defi sector.
They are one of the few protocols trying to become a cross-chain platform, from a purely financial perspective, that puts them in a strong position to rapidly expand, especially as more and more blockchains are encouraged to become interoperable.
How to Buy THORChain?
RUNE is a popular cryptocurrency and is available on various exchanges (both centralized and decentralized ones). The most prominent ones are Binance, Sushiswap, Hoo, FTX, BitMax, Bithumb Global, and ProBit Exchange. For a complete list of exchanges that list RUNE, please see CoinMarketCap or CoinGecko.
More Information About THORChain
What is THORChain?
Their website explained it best:
“THORChain enables users to swap between digital assets on almost any blockchain in a trustless & permissionless setting. Liquidity is provided by liquidity providers who earn fees on swaps, turning their unproductive assets into productive assets in a non-custodial manner. Market prices are maintained through the ratio of assets in pools which traders can arbitrage to restore correct market prices.”
Their native token is, of course, RUNE.
The platform is also not profit-oriented. All fees go back to the users, whether they are liquidity providers or nodes. The team is only incentivized to hold onto the RUNE tokens that they were originally given. According to the Binance DEX proposal, the team was given 10% (50 million) RUNE tokens, which were to be locked until the launch of their mainnet. Yet even then, only 20% is to be given every 3 months for 12 months.
THORChain currently uses BEPSwap, a web-based client that strictly limits it to the Binance chain. This is only temporary, as it will soon be replaced with ASGARDEX, a censorship-resistant desktop client that will act as the main portal to the system. It is designed to fully control the life cycle of a transaction whilst making it compatible with THORChain.
There are four key players in the ecosystem:
Liquidity providers who are paid to provide liquidity
Swappers who use the liquidity to swap assets ad-hoc, paying fees
Traders who monitor pools and rebalance continually, paying fees but with the intent to earn a profit.
Node Operators who provide a bond and are paid to secure the system
Like any other DEX, liquidity providers provide liquidity to a digital asset. They earn passive income through swap fees and other rewards. Also, like any other liquidity provider, they are at risk of suffering an impermanent loss. They earn those rewards in RUNE and to the connected asset. For example, if a user provides BTC/RUNE in a pool, he will receive rewards in both BTC and RUNE. Liquidity providers earn swap fees per block. How much yield a provider will get is calculated on how many swap transactions occurred in every block.
What is interesting about this protocol is that, unlike Uniswap, THORChain provides a slip-based model. So whenever a swapper swaps tokens and causes a price slippage, he will have to pay higher fees for it, which will then go to the liquidity providers in that particular pool that is experiencing that slippage. So, instead of frightening any liquidity providers, the protocol instead incentivizes others to provide even more liquidity.
As mentioned before, liquidity providers earn swap fees from swappers and traders. On the other hand, the rewards come from THORChain's own reward emission, which follows a predetermined schedule. Rewards also come from a large token reserve that is filled with all the network fees and is paid over the long-term. These rewards are paid to liquidity providers even during low trade volume.
THORChain seeks to make the process of swapping tokens very diverse through cross-chain compatibility, superior user experience, and easy access to other chains (Binance, Ethereum, Bitcoin, etc.). Users can swap any tokens whose chains are connected and are being provided in pools and even add a new token simply by depositing it to put it in the queue for listing.
The swapping mechanism is completely autonomous. All swaps are finalized and processed. But, any invalid swaps will be refunded. All valid swaps are transparent and resistant to front-running. Validators can not influence the order of trades and are punished if they fail to observe a valid swap.
Whether it be Bitcoin, BNB, Ethereum, that can be swapped is connected to the native RUNE. These pools are called Continuous Liquidity Pools because the RUNE links all of them in a single network.
The cost of swapping is made up of two parts: network fees and price slippage. All swaps are charged network fees, and they are calculated by averaging a set of recent gas prices. You can learn more about it here. Price slippage fees were already discussed in the liquidity providers sections.
Unlike other projects, THORChain does not use any oracle to extract any off-chain information. It instead uses Traders.
Traders on THORChain earn a profit by maintaining the prices of certain tokens. They find any digital asset that is mispriced between markets, buy that digital asset on markets with low prices and then sell them on other markets with high prices. They keep the difference. So, if the price of a token in an external market is lower than on THORChain, traders buy it from there and sell it on THORChain and vice versa. This does this in high-frequency and allows prices to stabilize and be competitive.
For more information, please click here.
THORNodes service the THORChain network. The network itself is powered by the Tendermint & Cosmos-SDK, and it utilizes the Threshold Signature Schemes (TSS). The Tendermint is especially important as it keeps the network safe through a two-thirds majority agreement. This keeps the network safe from attacks and allows for large scale cooperation and communication through the proof-of-stake (PoS) consensus mechanism. According to their website, there is an initial intent to have only 99 THORNodes. All Node operators earn 67% of the system income, which is paid out in RUNE.
One of the primary requirements needed in order to become THORNode is to buy and stake 1 million RUNE tokens. This stake of tokens essentially becomes a bond and is held at leverage for each node in order to ensure they all behave with the best of intent. Any malicious intents or attacks will result in slashing.
Another requirement has to do with keeping the identities of all nodes anonymous. This is crucial for the network as it prevents nodes from trying to delegate with each other and hence, from becoming contaminated with bis, subjectivized ideas, and influence. The primary stakeholder concern is not the nodes but the liquidity providers who stand to lose a lot if a node starts to act maliciously. This is why even on their own website, nodes are not to be treated nor considered superstars. In fact, they are to be viewed as ‘second-class citizens.'
“It needs to treat node operators as second-class citizens, paying them for their services and ejecting any node that has been in the system for too long or starts misbehaving. THORChain treats liquidity providers as first-class citizens and does everything it needs to protect their capital.”
Their argument stems from one of the weaknesses of a PoS consensus algorithm; the ability to centralize the network. The creators feared that if a node's identity was revealed, whether by someone or by the node itself, they would use their position to delegate more and more funds to theirs, as well as brand their side of the network at the expense of the rest. This is the primary reason why nodes must stake 1 million RUNE tokens.
In regards to their concern for security and node anonymity, THORChain seeks to have an easy and minimalist form of government. It allows its members to vote on which chain and assets are to be listed and what upgrades are to be done on the protocol. It can even decide on how many nodes it can have. But, that is it. It does not encourage any further involvement, especially between nodes.
Just as nodes' identities are being kept confidential, so too are the team's identities that created THORChain. In fact, the project does not have a CEO or directors, nor any founders. According to CoinMarketCap, its entire development was being done through Gitlab. Even those currently working on the project are being kept anonymous.
A tweet by the project sheds some light on the theory as to why they want to maintain an anonymous team. On that tweet, it was stated:
“THORChain can only succeed if it is sufficiently decentralized: 1) Nodes must be anonymous and never socially signal 2) Stakers must be driven only by incentives 3) Developers must be transient.”
The ‘official' goes on to say:
-> Developers work for the Nodes by shipping code that makes the system more valuable.
-> Nodes work for the Stakers by securing assets and being online.
-> Stakers bring capital, placed on-market for the Swappers.
-> Swappers pay fees, bringing economic activity.
In conclusion, the Norse Gods seem to have given this project their blessing. Despite having its main net launched only in January 2021, THORChain continues to be developed and upgraded by the ‘phantom' team. Moreover, its RUNE value had been steadily increasing since 2019, and there have been few signs of its stopping anytime soon. Given its strong commitment to being completely decentralized and community-driven, many are finding the project appealing.
It also needs to point out that having an anonymous team, although a bit uncommon, is not unique. Satoshi Nakamoto's, the found of Bitcoin, identity is still not known. The identity of the creators of Sushiswap is also not known.
With many now seeing the flaws of having isolated, territorial-driven blockchain ecosystems, more and more are opting for interoperability as the most secure way for this industry to succeed. And THORChains seems to be one of those protocols leading the charge. So, long as the process for interoperability and easy migration between ecosystems continues, it is not too farfetched to say that this protocol could even lead to the eruption of Ragnarok (final epic Norse battle, i.e., the end of the world) against the old centralized, traditional financial system.