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Thorchain (RUNE): How it works and where to buy it
Learn more about how Thorchain works, why the RUNE token is useful and where to buy it.
RUNE is the native token of the Thorchain network.
Thorchain is a liquidity and interoperability system with an emphasis on facilitating secure cross-chain cryptocurrency transactions.
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific
provider, service or offering. It is not a recommendation to trade.
| Cryptocurrency | RUNE |
|---|---|
| Circulating supply (approximately, as of August 2020) | 183,500,000 |
| Maximum supply | 500,000,000 |
| Blockchain network | Agnostic |
| Purpose | Validator node staking, liquidity |
What is DeFi? Read the beginner’s guide
How does Thorchain work?
Thorchain’s goal is simple: build bridges to enable anyone to securely and cheaply move any assets between any blockchains.
Although similar to other cross-chain compatibility systems, such as wrapped Bitcoin (wBTC), Thorchain aims to enable the movement of the assets themselves on their home chains.
The first part of Thorchain’s solution is liquidity pools, all of which are composed of RUNE tokens in combination with other assets.
These pools serve as the source of all the different swappable coins from different blockchains, while the RUNE token acts as an intermediary currency to allow swapping between any two supported assets. Basically, whenever an end user wants to swap an asset from one blockchain to another, they’re making a trade through these pools.
In addition to providing the liquidity necessary for the system to work, Thorchain also uses its liquidity pools for pricing data, under the assumption that any discrepancies between its liquidity pools and other markets will be arbitraged out quickly.
The other part of Thorchain’s solution is the nodes, whose job it is to provide security to the network, to build bridges to all the different supported blockchains and to ensure that all transactions are broadcast to the appropriate chains.
Basically, the nodes all keep one eye on the liquidity pools and another eye on the supported blockchains. When someone makes a cross-chain transaction using the liquidity pools, the nodes see it happen and then perform the actual on-chain transactions on the user’s behalf.
Nodes are theoretically kept honest through their staking of RUNE tokens, so the system can act as a convenient one-stop shop for someone’s cross-chain transfer needs.
What does the RUNE token do
The RUNE token serves two key purposes in the Thorchain network.
Firstly, the token is found in all Thorchain liquidity pools, to create an intermediary asset for use across all of them, greasing the wheels for transfers.
Secondly, it acts as an incentive and penalty mechanism, helping ensure that nodes are honest in their behaviour and their reporting of transactions on different chains.
How to buy RUNE
Here’s a step-by-step guide on one way of buying RUNE. Note that there might be other options available, so you may want to compare cryptocurrency exchanges to find the one that’s right for you.
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly
volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of
future performance. Consider your own circumstances, and obtain your own advice, before relying on this information.
You should also verify the nature of any product or service (including its legal status and relevant regulatory
requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may
have holdings in the cryptocurrencies discussed.
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