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THORChain Phases Out Support For Rune Tokens on Ethereum, BNB Chain

Shaurya Malwa - CoinDesk
2022-07-19 12:30

THORChain has activated a “killswitch” that will eventually phase out rune (RUNE) based on Ethereum and BNB Chain in favor of rune issued on its native blockchain.

“The BEP-2 and ERC-20 $RUNE killswitch will be activated at block 6500000. Upgrades will no longer be 1:1,” developers said in a tweet Monday. BEP-2 and ERC20 refer to tokens issued atop the BNB Chain and Ethereum networks respectively.

  

Today, the BEP-2 and ERC-20 $RUNE killswitch will be activated at block 6500000. Upgrades will no longer be 1:1. Exchange rates will linearly tick down to 1:0 over the next 12 months.If you hold $RUNE in a self-custody wallet, ensure your wallet address begins with `thor1...`

— THORChain (@THORChain) July 18, 2022

The killswitch will reduce the redemption rate of the BNB Chain-based rune (BNB.RUNE) and Ethereum-based rune (ETH.RUNE) from 1:1 to 1:0 over the next year.

This means 1 BNB.RUNE presented after six months of the killswitch will only be redeemed for 0.5 THOR.RUNE, and after one year, it will be redeemed for 0.0 THOR.RUNE, is effectively entirely deprecated.

RUNE was, so far, issued on the BNB Chain and Ethereum networks as an IOU, meaning they were redeemable for an equivalent value of THORChain-based assets. Users acquired these tokens 18 months before the launch of its multichain testing network “Chaosnet.”

Anyone could have acquired enough RUNE to run a THORNode, which processes transactions on and validates the THORChain network.

However, developers explained earlier this year that BNB.RUNE and ETH.RUNE, the two IOU tokens, allowed third parties to create new tokens using THORChain’s “mint” function, which made THORChain dependent on the two networks.

“Six months ago, a white-hat found a critical vulnerability, that was *almost* exploited but swiftly prevented, around this mint functionality on Binance Chain,” developers pointed out at the time. “ETH.RUNE also has unfavorable characteristics for long-term holders, being the transferTo() function which makes it easy for users to be phished.”

Moving the tokens over to THORChain’s native network makes the ecosystem less susceptible to exploits, the developers opined.

Meanwhile, THORChain developers said in Monday’s tweet that several large exchanges who have listed BNB.RUNE are yet to make the switch to THORChain-issued rune.

“This has created two separate markets for RUNE and one that is both unnecessary, and problematic, since it slows adoption of the network,” they said. “These exchanges have not yet been given an imperative to switch to native RUNE.

THORChain allows users to trade bitcoin (BTC) for any other supported asset without the use of bridges or wrapped assets. Bridges are protocols that rely on smart contracts to exchange coins from different blockchains between users.

The protocol currently supports swaps between seven major ecosystems: bitcoin, ether (ETH), binance coins (BNB), dogecoin (DOGE), litecoin (LTC), bitcoin cash (BCH) and rune (RUNE). Support for cosmos (ATOM) and avalanche (AVAX) is expected in the coming months.

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