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THORchain is an application chain built using the Cosmos SDK, designed to enable cross-chain trading of native assets using non-native crypto assets, such as directly swapping BTC for ETH. This may sound like a cross-chain bridge, but there are significant differences.
The three pillars of cryptocurrency are decentralized exchanges, store of value, and stablecoins. THORchain enables users to exchange assets without relying on centralized exchanges or undergoing KYC procedures. It allows anyone within the crypto ecosystem, regardless of location, to trade Bitcoin and use it as a store of value. Furthermore, THORchain enables Bitcoin holders to bridge to another chain without depending on centralized third parties or converting assets, earning yield from native assets—fulfilling the first two pillars.
The six assets with the deepest liquidity pools on THORChain are BTC, ETH, BUSD, LUNA, UST, and BNB in order. Given that BTC and ETH are the most liquid assets across all cryptocurrencies, it's no surprise they dominate THORChain's asset depth.
THORSwap is the primary application on THORchain and functions more like a cross-chain Uniswap, providing liquidity pools for native tokens across underlying L1 and L2 chains, allowing users to transfer assets via trades. However, unlike Uniswap, which provides liquidity for each trading pair, THORchain's trading logic centers around the RUNE token.
THORFi, launched by THORchain, could also become a new model for DeFi lending.
