THORChain spikes by 34% after activating synthetic assets

The price of the native asset for cross-chain decentralized exchange THORChain (RUNE) has spiked by 34% in a day following the activating of synthetic assets on the network.

At the time of writing the price had settled back to a 21% gain over the past 24 hours to sit at $5.27..

Crypto synthetics or synths are derivative tokens of other digital assets that are pegged to the value of the underlying collateralized asset such as Bitcoin (BTC) or Ether (ETH). In THORChain’s variation, the project has opted to back its synths with 50% of the underlying asset and 50% in RUNE. The activation went live earlier today and synthetics such as sBTC and sETH are now able to be traded on the network.

THORSwap Finance highlighted the advantages of the synthetic assets via a March 10 blog post, noting 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.”

“In the future, it will allow THORChads to also earn yield with Synths thanks to vaults and provide other exciting THORFi utilities," the post added.

The activation went live earlier today and synthetics such as sBTC and sETH are now able to be traded on the network. The price of RUNE has responded positively, up by more than 20% to sit at $5.27.

According to Messari, THORChain is now the third largest project in DeFi, after Uniswap and Maker, and ahead of well known projects like Aave and PancakeSwap.

Earlier this week, the team highlighted its roadmap moving forward, as it vowed to make “decentralized liquidity 10X” larger than centralized. After ticking off synths from the list, other significant future landmarks include decentralized finance (DeFi) – dubbed THORFi in this instance — services such as lending and saving.

Thorchain clocking in $40M of volume on day of synths launch A good startBullish $RUNE pic.twitter.com/rgJPu4MFeI

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

Another notable point of interest will be the highly anticipated mainnet launch on THORChain which is getting closer to fruition but still lacks a specific launch date. As Cointelegraph previously reported, RUNE’s recent surge which also sees it up more than 48.4% over the past 14 days, may also be in relation to the full integration of Terra (LUNA) into the THORChain protocol at the start of this month.

THORChain core developer Chad Barraford also emphasized the importance of freshly launched synths via Twitter earlier today, suggesting that trade volume could on the network could soon surge:

“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.”