“Trading using synthetics on THORChain offers half the swap fees, making swaps cheaper, gas expenses lower, and trading faster.” “You can make near-instant trades at huge volume,” developer Chad Barraford explained.
Following the activation of synthetic assets on the network, the price of the native asset for cross-chain decentralized exchange THORChain (RUNE) increased by 34% in a single day.
At the time of writing, the price has returned to a 21 percent gain over the previous 24 hours, sitting at $5.27.
Crypto synthetics, often known as synths, are derivative tokens of other digital assets that are linked to the value of the underlying collateralized asset, such as Bitcoin (BTC) or Ether (ETH) (ETH). In THORChain’s variant, the project has chosen to back their synths with 50% of the underlying asset and 50% in RUNE. Synthetics such as synthetic BTC (sBTC) and synthetic ETH (sETH) can now be traded on the network since the activation went live earlier today.
In a Thursday blog post, THORSwap Finance emphasized the benefits of synthetic assets, stating that “synths have enormous use for traders and arbitrageurs, as they can be traded practically quickly and at a fraction of the cost compared to native L1 swaps.”
“In the future, it will enable THORChads to earn yield with Synths via vaults, as well as providing other fascinating THORFi services,” the statement continued.
The activation went live earlier today, allowing synthetics like sBTC and sETH to be exchanged on the network. RUNE’s price has risen by over 20% to $5.27.
Earlier this week, the team detailed its future plans, pledging to make “decentralized liquidity 10X” greater than centralized liquidity. Following the removal of synthesizers from the list, other key future milestones include decentralized finance (DeFi) — called THORFi — services such as lending and saving.
Another significant point of interest will be the highly awaited THORChain mainnet debut, which is growing closer but still lacks a firm launch date. As previously noted by Cointelegraph, RUNE’s current boom, which has seen it rise by more than 48.4 percent in the last 14 days, could be related to the full integration of Terra (LUNA) into the THORChain protocol at the beginning of March.
THORChain core developer Chad Barraford also stressed the significance of newly launched synths on Twitter earlier today, implying that transaction volume on the network may soon increase:
“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.”