According to data from TBEN Markets Pro, THORChain (RUNE) has gained nearly 41% in the last seven days, and its recent price action is even leading the entire crypto market at first.

A quarter of 2021. One of the major causes that contributed to its recent price increase is the introduction of its mainnet, which was originally scheduled for last year.

The integration of synthetic assets into its network, on the other hand, has provided extra momentum. Why was this such a huge issue, and what does it mean for the future of THORChain?

Because it allows merchants to exchange multiple tokens, THORChain is sometimes likened to Uniswap. The only distinction is that users on THORChain can trade Layer 1 currency.

Thorchain Synths Under The Hood

Users can construct synthetic versions of coins ranging from Rune Rally BTC to Aave using THORChain (AAVE). Users achieve this by adding RUNE or the crypto asset itself to a THORChain liquidity pool.

THORChain’s synths are unlike other synthetic assets in that they are not entirely backed by the underlying asset and do not demand a high collateral rate.

Another synth-building platform, the Terra (LUNA) Mirror protocol, has a 150 percent collateralization rate.

A THORChain synth, on the other hand, is backed by a liquidity pool that is split 50/50 between RUNE and the underlying asset. This is accomplished through pool ownership and collateralization.

How Synths Benefit Users

Aside from the trading advantages, Rune Rally THORChain synths are also less expensive to trade than Layer 1 assets, with a 50% reduction in trading fees when exchanging an asset for a synth, a synth against an active, or a synth against another synth.

The fact that it is a simpler, more profitable way to produce a farm is likely its most compelling selling point. Synth holders will be able to receive a return by merely keeping their assets in a vault, according to THORChain’s plans.

This makes the process more accessible to new participants because they won’t have to learn about liquidity pools or the risks of momentary loss.

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