THORChain has activated a “killswitch” that will eventually phase out rune (RUNE) based on the Ethereum blockchain 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.
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.
That means 1 BNB.RUNE presented after six months of the killswitch will be redeemed only for 0.5 THOR.RUNE, and after one year, it will be redeemed for 0.0 THOR.RUNE, which means the token is effectively entirely deprecated.
RUNE was, so far, issued on the BNB Chain and Ethereum networks as an IOU, meaning the tokens were redeemable for an equivalent value of THORChain-based assets. Users acquired the 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.
Developers, however, 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 to THORChain’s native network makes the network less susceptible to exploits, the developers said.
Meanwhile, THORChain developers said in Monday’s tweet that several large exchanges that have listed BNB.RUNE haven't made the switch to THORChain-issued rune yet.
“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 software that allows users to transfer coins among different blockchains.
The protocol now supports swaps between seven major tokens, including bitcoin, ether (ETH), binance coin (BNB), dogecoin (DOGE), litecoin (LTC), bitcoin cash (BCH) and rune. Support for cosmos (ATOM) and avalanche (AVAX) is expected in the coming months.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.