THORChain Finance

THORChain Finance - A comprehensive overview of financial primitives and mechanisms within the THORChain ecosystem

THORChain Finance encompasses the core financial primitives that enable cross-chain liquidity and trading on the THORChain network. These mechanisms provide the foundation for decentralized finance (DeFi) operations while maintaining security and efficiency across multiple blockchain networks.

Core Financial Primitives

Continuous Liquidity Pools

The foundation of THORChain's AMM (Automated Market Maker) system, enabling permissionless liquidity provision and efficient asset swapping across chains without wrapped tokens.

Trade Assets

A capital-efficient alternative to synthetic assets, offering 2x the efficiency for arbitrageurs with 6-second finality and no slippage redemption.

Secured Assets

THORChain's approach to maintaining asset security through distributed key management and threshold signature schemes (TSS).

TOR

THORChain's native algorithmic stablecoin, designed to maintain price stability while integrating with the broader THORChain ecosystem.

RUNEPool

Pooled liquidity provision mechanism that allows smaller RUNE holders to participate in liquidity provision with lower barriers to entry.

Economic Model

THORChain's financial architecture is built around the Incentive Pendulum, which maintains a 2:1 bond-to-stake ratio ensuring network security. The native RUNE token serves four critical roles:

• Settlement Asset: All cross-chain swaps settle in RUNE

• Security: Node operators bond RUNE to participate in consensus

• Liquidity: Liquidity providers pair RUNE with external assets

• Governance: RUNE holders participate in network governance decisions

Key Features

• Cross-Chain Native: Direct swaps between native assets across different blockchains

• Permissionless: No centralized authority controls access or operations

• Capital Efficient: Advanced mechanisms like Trade Assets maximize capital utilization

• Secure: Distributed key management protects user funds across all supported chains

• Transparent: All operations are verifiable on-chain

Getting Started

Choose the primitive that best fits your needs:

• New to DeFi: Start with Continuous Liquidity Pools

• Active Trader: Explore Trade Assets for efficient arbitrage

• Stability Seeker: Learn about TOR stablecoin

• RUNE Holder: Consider RUNEPool for passive liquidity provision