The cross-chain protocol THORChain went live with synthetic assets trading on its platform on March 10, 2022. The result of this was a sudden spike in value, as the token jumped in value by 37%.
Synthetic Assets Launch on THORChain
Synthetic assets are blockchain-based representations of another asset and are backed by half the value of their underlying asset and half of RUNE in the case of the THORChain.
🚨 SYNTHETICS ARE NOW LIVE ON @THORChain 🚨— THORChain #THORFI (@THORChain) March 9, 2022
1 Synthetic #Bitcoin on THORChain is always redeemable for 1 #Bitcoin from the liquidity pools.
-Faster tx settlement (5 seconds)
-Increase trade volume
Complete Launch Details:https://t.co/kqxZQNoIJX🧵
This gives users the opportunity to hold and trade a representative of a layer one or base asset faster and at a lower cost.
THORChain essentially allows for trustless trading and token swaps for several cryptocurrencies, from Bitcoin (BTC) to Ether (ETH) through RUNE.
Thus, RUNE is used as an intermediary that allows for the trading of assets from the network, which can then be traded for another in a decentralized way without reliance on smart contract-based bridges.
This system of trustless trading enables participants to trade without needing to know anyone’s identity. You can take an in-depth look at the THORChain price updates, other recent developments, and future events here.
On the Flipside
- The addition of synthetics will lead to an increase in the overall network usage and the network’s total value locked (TVL), which will enable cheaper swap fees and will generate higher income for liquidity providers (LPs).
Why You Should Care
The addition of these synthetic assets will lead to an increase in the demand for the RUNE token within the network, which will increase its appeal among liquidity providers and investors.