So what is Thorchain all about? How does it work? And how does it make it possible to swap between native assets across different blockchains? You’ll find answers to these questions in this video.
With billions of dollars in trading volume, decentralised exchanges have been gaining more and more traction. It’s not uncommon to see over $1B in daily trading volume on Uniswap alone.
Although protocols like Uniswap, Sushiswap or Curve are great when it comes to exchanging assets within the Ethereum ecosystem, they don’t support swaps between different blockchains.
To accommodate this problem, a common approach is to represent external assets in the form of wrapped or synthetic tokens on Ethereum. The most popular asset on other blockchains outside of Ethereum is of course Bitcoin. There are multiple ways of representing Bitcoin on Ethereum that allows it to be traded on decentralized exchanges. Wrapped Bitcoin, renBTC, sBTC to name a few.
Even though most of these approaches work fine, they usually make certain tradeoffs when it comes to either the custody or the security of the assets. If you want to learn more about it check out this video here.
What if there was a way of swapping native assets instead? For example, making a trade between Bitcoin on the Bitcoin blockchain and Ether on the Ethereum blockchain.
And this is exactly where Thorchain comes into play.