THORChain rune

THORChain is an independent Layer-1 cross-chain liquidity protocol and decentralized exchange built with the Cosmos SDK, CometBFT consensus, and GG20 threshold signatures. It coordinates native-asset swaps between supported blockchains rather than requiring a centralized exchange or a wrapped representation of the asset.

The protocol is designed so a user can send an asset such as BTC to a THORChain vault and receive a native asset such as ETH on another chain. THORChain's continuous liquidity pools (CLPs) provide always-on liquidity and transparent, on-chain pricing.

RUNE is the protocol's native utility token and the hub asset in the liquidity architecture. Every supported asset is paired with RUNE, so a cross-chain route generally executes as input asset → RUNE → output asset. RUNE is also used for validator bonding, liquidity, settlement, and incentives.

Cryptocurrency liquidity is fragmented across independent Layer-1 networks. Conventional solutions often require centralized custodians, exchange accounts, bridges, or wrapped and pegged assets, which introduce counterparty, custody, smart-contract, and operational risks.

THORChain addresses this by letting users exchange native assets through a decentralized network of bonded validators and distributed vaults. It observes deposits on external chains, reaches consensus on the observed transaction and its memo, and signs the corresponding outbound transaction without any single node controlling a complete private key.

The design does not eliminate risk: users depend on supported-chain finality, vault and node security, liquidity depth, and protocol software. Official documentation describes confirmation counting, outbound throttling, solvency checks, and chain-level halts as mitigations rather than guarantees.

Each asset has a RUNE pair in a continuous liquidity pool. For a cross-chain swap, the source asset is exchanged into RUNE and RUNE is exchanged into the destination asset; the user does not need to hold RUNE or manage the intermediate leg. The CLP uses a liquidity-sensitive slip-based fee, so larger trades relative to pool depth generally pay more slip and fee.

THORNodes run Bifrost services that observe external-chain transactions involving THORChain vaults. Nodes convert observations into a standardized witness transaction and require consensus—official Bifrost documentation states 67% agreement for validation—before the state machine processes the inbound. The network uses confirmation counting for chains where finality can be delayed or reorganized.

Funds are held in distributed vaults. Logical vaults represent bonded validator sets, while physical vaults shard operations; the default asgard-size parameter is documented as 20 nodes per shard. TSS distributes signing authority across the set, requiring a supermajority and ensuring that no single node possesses a complete private key. Vaults rotate through init, active, retiring, and inactive states during validator churn.

Liquidity providers supply paired assets and receive pool units representing their ownership share; fees are distributed according to protocol incentives. Users may use streaming swaps to divide a large swap into smaller executions over time, trading speed for lower slippage; the documentation describes price-optimized streaming swaps as similar to a TWAP with a maximum 24-hour period.