Total Mastery of Thorchain (RUNE): A Detailed Guide for Beginners
Hello! We're going to take a deep dive into Thorchain (RUNE), the leader in innovation in cross-chain DeFi. We'll explain step-by-step with real-world examples so that even those who are new to the world of blockchain and cryptocurrency can easily understand. Especially now that cross-chain technology is gaining attention in 2024, let's take a look at the value and potential of Torchain.
In-depth Introduction to Torchain (RUNE)
Torchain is not just a simple cryptocurrency, but an innovative cross-chain liquidity protocol. It was created to solve one of the biggest problems in the current cryptocurrency market: 'blockchain isolation'. For example, if a user holding Bitcoin wanted to use an Ethereum-based DeFi service, they had to go through a complicated bridge process, but Torchain has dramatically improved this inconvenience.
RUNE tokens serve as the central axis of this ecosystem. Node operators responsible for the security of the network stake RUNE to protect the network and receive rewards in return. It is currently connected to major blockchains such as Bitcoin, Ethereum, Binance Smart Chain, and Avalanche, and is continuously expanding its support chains.
History and development of Torchain (RUNE)
The Torchain project began in 2018 when the cryptocurrency market was undergoing major changes. The founders noted that each blockchain was like an isolated island at the time. The Bitcoin network is secure but has limited smart contract functionality, while Ethereum has excellent smart contracts but high transaction fees.
• 2018-2019: Project conception and initial development start
• 2020: Testnet 'Chaosnet' launched
• 2021: Mainnet officially launched, Bitcoin-Ethereum bridge implemented
• 2022-2023: Expanded multi-chain support, added synthetic asset functionality
• 2024: Lending protocol and new DeFi features to be introduced
In particular, the launch of the mainnet in 2021 marked an important milestone in the history of DeFi. For the first time, you can directly exchange Bitcoin and Ethereum without a centralized exchange or complex wrapping process. This opens the door for many Bitcoin holders to participate in the DeFi ecosystem.
How Thorchain (RUNE) Works
At the heart of Thorchain is a revolutionary technology called 'Threshold Signature Scheme (TSS)', which is a way for multiple nodes to work together to securely manage assets on other blockchains. Instead of a centralized entity storing assets, a decentralized network secures them through collective signatures.
1. Asset Deposit: User deposits Bitcoin to Torchain
2. Token Issuance: Synthetic Bitcoin (sBTC) is created in the same amount of Bitcoin
3. Liquidity Pool: sBTC and RUNE form a liquidity pool in a 1:1 ratio
4. Exchange Execution: Instant exchange via an automated market maker (AMM)
5. Asset Withdrawal: Direct withdrawal to the native token of the desired chain
The core of this system is the 'economic security' model. Node operators must provide RUNE equivalent to twice the value of the assets in the pool as collateral, so they suffer greater losses if they engage in malicious behavior. This incentive structure ensures the security of the network.
Torchain also prevents node misconduct through the 'Slashing' mechanism. If a node violates the rules or engages in behavior that harms the network, some of the staked RUNE will be automatically burned, resulting in economic punishment.
Various Use Cases of Torchain (RUNE)
The Torchain ecosystem provides various DeFi services beyond simple token swaps. Let's take a look at some specific examples of how actual users are utilizing it.
Bitcoin holders can directly participate in Ethereum DeFi protocols, or Ethereum users can acquire Bitcoin to diversify their portfolios. Previously, they had to go through a centralized exchange, but now they can be exchanged directly on Torchain.
Users can deposit their cryptocurrencies into Torchain liquidity pools to earn transaction fees. For example, if you provide the same value of Bitcoin and RUNE to the BTC-RUNE pool, you will receive a proportional share of the fees for all transactions that occur in that pool.
The Savers feature introduced in 2022 allows you to generate income with a single asset. You can receive a portion of network fees and block rewards by depositing only Bitcoin, so you can earn income without worrying about embezzlement loss.
Large-scale cross-chain transactions through Torchain are increasing, especially among institutional investors. This is because it is faster and safer than traditional bridge methods and allows direct exchange without intermediate steps.
Major exchanges where Torchain (RUNE) is available
RUNE is currently actively traded on major cryptocurrency exchanges around the world. Let's compare the features and pros and cons of each exchange.
• Binance:
- The world's largest trading volume, supports various trading pairs
- Additional income possible with staking service
- Excellent Korean language support and mobile app usability
• Coinbase:
- High reliability due to compliance with US regulations
- Beginner-friendly interface
- Coinbase Pro service for institutional investors
• Kraken:
- The largest exchange in Europe, strict security standards
- RUNE staking service provided
- Relatively low transaction fees
• FTX (currently suspended):
- Service due to bankruptcy in 2022
- Case showing the importance of reliability verification when choosing an exchange
When choosing an exchange, considerations include transaction fees, security level, Korean language support, and deposit/withdrawal methods. In particular, check the KYC (Know Your Customer) policy to see if it matches your trading purposes.
• Test transactions with small amounts first
• Be sure to set up 2-step authentication (2FA)
• Move to a hardware wallet when storing large amounts
• Check the deposit/withdrawal fees and minimum transaction amount of each exchange
Torchain Community and Information Channels
Torchain has an active community worldwide. Here are some of the main channels to get the latest information and updates.
• Official Website: Check out the technical documentation and roadmap at thorchain.org
• Official Twitter: @THORChain - Real-time updates and announcements
• Telegram: Various language channels including the Korean community
• Discord: Technical discussion channel where you can communicate directly with developers
• Reddit: In-depth discussions and analysis at r/THORChain
The Korean community is particularly active. They share information in KakaoTalk open chat rooms and Naver Cafe, and also hold regular online meetups. Beginners are encouraged to join these communities and get practical advice from experienced people.
• Check real-time statistics on the THORChain Stats website
• Monitor price volatility on DEXScreener or CoinGecko
• Subscribe to technical updates on the official Medium blog
• Watch educational content and AMA sessions on our YouTube channel
How to Safely Store THORChain (RUNE)
The most important thing when investing in cryptocurrency is safe storage. Let's find out the optimal storage method considering the characteristics of RUNE.
• Ledger Nano S/X: Native support for RUNE, high security
• Trezor Model T: User-friendly interface
• Advantages: Minimize hacking risk with offline storage
• Disadvantages: Initial purchase cost (100,000-200,000 won), risk of loss
• XDEFI Wallet: Optimized for Torchain-only functions
• Trust Wallet: Supports various chains, mobile convenience
• MetaMask: When storing Ethereum-based tokens
• Pros: Free, ready to use, easy to connect to DeFi
• Cons: Security risks due to online connections
✅ Physically store your seed phrase (recovery keyword) in a safe place
✅ Never store your seed phrase online or in the cloud
✅ Regularly update your wallet software
✅ Beware of phishing sites - always check the official URL
✅ When storing in bulk, store it in multiple wallets
RUNE in particular has a staking function, so you can consider additional profits through staking when holding for a long period of time. However, liquidity is limited during the staking period, so consider your investment strategy and cash flow when making your decision.
Thorchain (RUNE) Investment Strategy and Risk Management
When considering investing in RUNE, you should comprehensively analyze various factors. We will provide practical investment strategies with opinions from market experts.
• Positives:
- Growth potential of the cross-chain DeFi market
- Possibility of institutional fund inflow due to Bitcoin ETF approval
- Continuous technology development and expansion of partnerships
- Increase in real-world use cases and transaction volume
• Risks:
- Impact of changes in the regulatory environment
- DeFi protocol smart contract risks
- High volatility and dependence on market sentiment
- Market penetration of competing projects
Step 1 - Information gathering (1-2 weeks):
• Familiarize yourself with the Torchain whitepaper and technical documentation
• Competition Comparative analysis of projects (Cosmos, Polkadot)
• Analysis of price charts and trading volume patterns for the past 3 months
Stage 2 - Small-scale testing (1 month):
• Start with 10-20% of total investment amount
• Experience using actual Torchain DApps
• Evaluation of fee structure and usability
Stage 3 - Gradual expansion:
• Applying dollar-cost averaging (DCA)
• Establishing a buy/sell plan by target price range
• Adjusting the proportion of RUNE in the portfolio (recommended: 5-15%)
• Set investment limits: Invest only the amount you can afford to lose
• Diversify your investments: Do not concentrate all your funds in one asset
• Stop cut criteria: Consider selling when the purchase price falls -20~30% compared to the purchase price
• Profit taking: Partial selling when the target return is achieved
• No emotional trading: Do not get caught up in FOMO or FUD
In particular, major events such as the Bitcoin halving and Ethereum upgrade are scheduled for 2024, so these macro factors can also affect the RUNE price. Therefore, it is important to continuously monitor the overall cryptocurrency market trends.
In conclusion
Thorchain (RUNE) is an innovative project that blurs the boundaries between blockchains. Based on its technical excellence, real-world use cases, and active community, it is positioned as a core infrastructure for the cross-chain DeFi ecosystem.
However, as with all investments, sufficient research and careful approach are required. We hope this guide has helped you understand Torchain, and you should always make investment decisions carefully and at your own risk.
If you have any questions or additional information, please feel free to leave a comment. Let's create a cryptocurrency community that learns and grows together! π