THORChain introduces synthetic assets leading to a spike in RUNE value

Cross-chain decentralized exchange THORChain’s native token RUNE has seen a huge spike in its price. The coin saw a surge of around 34% in 24 hours and went straight up to $5.27. However, it is currently resting around $4.9. The trading volume of the token is sitting at $352 million, up by around 130% in a single day.

This surge came shortly after the announcement of the activation of crypto synthetic assets on the network. Crypto synthetics or synths, derivative tokens of other virtual assets, are pegged to the underlying collateralized asset’s value. 

THORChain has chosen to back its synths with half of the underlying asset and half in RUNE in its variant. Synthetics like sBTC and sETH can now be exchanged on the platform after the activation went live on Wednesday.

In a March 10 blog post, THORSwap Finance highlighted the benefits of synthetic assets, stating that “synths have great utility for traders and arbitrageurs, as they can be transacted nearly instantly and at a fraction of the cost compared to native L1 swaps.”

The post added that it will enable THORChads to earn yield with Synths via vaults, as well as provide other amazing THORFi utilities in the future.

The team announced its future plans earlier this week, promising to make “decentralized liquidity 10X” larger than centralized liquidity. Following the completion of the synths on the list, other key future landmarks include decentralized finance (DeFi) – termed THORFi in this case – and lending and saving services.

Thorchain clocking in $40M of volume on day of synths launch

A good start

Bullish $RUNE pic.twitter.com/rgJPu4MFeI

— $RUNE Ranger 🔨 (@TheRuneRanger) March 10, 2022

In October, as TheCoinRise reported, THORSwap relaunched cross-chain trading on four out of five networks.

Mainnet launch of THORChain

The highly anticipated mainnet debut on THORChain, which is growing closer to the truth but still lacks a firm launch date, will be another subject of intrigue. 

“Trading with synthetics on THORChain has half the swap fees, making swaps cheaper, cheap gas fees, and faster for traders. You can do near-instant trades at a high volume,” THORChain core developer Chad Barraford said on Twitter earlier today, implying that trade volume on the platform might soon spike.

Why would someone want a synthetic asset?
1) Synthetics can be used to change the pool depths, and therefore correct the pool price to match market demands, ie arbitrage. This is super important because it means the pools can be arbs faster, cheaper, and more efficiently.

— Chad Barraford (@CBarraford) March 9, 2022