Up almost 30% during today’s trading session, decentralized cross-chain exchange THORChain (RUNE) trades north of $5.28. One of the top gainers in the current relief rally across the market, the network has activated synthetic assets, a new feature that could attract use cases and users to the platform.
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Per an official post, synthetics assets are tokens pegged to the value of their underlying collateral, such as Bitcoin or Ethereum. In order words, users can now access BTC, ETH, and others running on THORChain.
Similar to Wrapped Bitcoin (wBTC), a popular token on Ethereum, with the difference than synthetic assets can also be collateralized by BTC, in this case, and other cryptocurrencies. The synthetic version of Bitcoin running on this blockchain is called sBTC and offers the user exposure to BTC’s price performance.
Unlike Bitcoin, according to the post, its synthetic version on THORChain offers faster transactions and lower fees. In that way, a user can trade with this benefit and benefit from other yield generation products. Per the post:
As a benefit, you will have access to yield generating vaults, and be one of the first users who will vest their funds. Minting synths will be capped and access will depend on how much liquidity is in the THORChain pools.
The post adds that users can simplify their trading experience, and gain access to different cryptocurrencies from multiple blockchains without using a centralized exchange. Core developer Chad Barraford said the following on the advantages of this feature and its impact on the network’s ecosystem:
Synthetics can be used to change the pool depths, and therefore correct the pool price to match market demands, i.e. arbitrage. This is super important because it means the pools can be arbs faster, cheaper, and more efficiently.
Furthermore, synthetics assets will provide THORChain users with the ability to earn as much as 20% interest on their holdings. For that, users will need to lock their assets on a vault called THORSaving which will have an initial 5% APY.
One of the most hyped products in the lending and borrowing use case. Users will be able to access “self-repaying loans” which generate yield on collateral. As the post clarified:
You take the loan which will be paid automatically by the interest the vaults generate from the locked synthetics.
Barraford predicts a potential increase in trading volume for RUNE and the THORChain ecosystem in general. The project recently integrates with Terra (LUNA) and will begin acquiring this network’s native token along with its native stablecoin UST.
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Ultimately, the decentralized exchange aims at increasing its liquidity 10-fold. To achieve this goal, THORChain published a roadmap that included the integration of DEX aggregators, more features, wallets, and access to other blockchains.
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