THORChain (RUNE) has appreciated nearly 41% in the past seven days, with its mainnet launch and the integration of synthetic assets to its network playing major factors. What will this mean for THORChain going forward?
The addition of synthetic assets to THORChain is expected to grow the network usage.are, of course, virtually tokenized derivatives wherein it mimics the value of another asset. Synthetic assets, or synths, track real-world assets like stocks, commodities or even cryptocurrencies and traders use them for various reasons such as taking advantage of lower fees, performing faster transactions and access to 24/7 trading, among others.
For instance, Terra Mirror protocol, another platform for minting synths, has a 150% collateralization ratio. A THORChain synth, on the other hand, is backed by a liquidity pool that contains 50% of RUNE and 50% of the underlying asset. This is done through collateralization via pool ownership.One of the main advantages boasted by THORChain is it removes impermanent loss, achieved by its protocol structure.
THORChain has also integrated with Terra, catalyzing RUNE’s initial March rally. Lending and borrowing are also coming to the THORChain ecosystem by June 17. This is why many have been bullish to even call an $11.50 target for RUNE. Can RUNE maintain its rally going to the second quarter? Cointelegraph’s Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. The newsletter dives into the latest data on social media sentiment, on-chain metrics and derivatives.
We also review the industry’s most important news, including mergers and acquisitions, changes in the regulatory landscape, and enterprise blockchain integrations. Sign up now to be the first to receive these insights. All past editions of Market Insights are also available on Cointelegraph.com.
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