Thorchain is an independent blockchain that is powered by the Cosmos SDK. It is also a decentralized exchange (DEX) that operates across several blockchains.

This protocol utilizes an automated market maker (AMM) model similar to that of Bancor (BNT) or Uniswap, but uses THORChain's native token (RUNE) as the base swap pair.

It is basically a Decentralized Liquidity Protocol which helps us deposit native assets into Liquidity Pools to earn yield and this network is 100% autonomous and decentralized.

Users can swap from any connected asset to any other connected asset. They can also swap from any connected asset to RUNE. Learn more about how chains and assets get added to the network in the Governance section. To add an asset to THORChain, users simply deposit a new asset to put it in the queue for listing.

References:

https://docs.thorchain.org/roles/swapping

https://zipmex.com/th/en/coin-info/rune-th/

The RUNE model allows traders to move between different asset pools while keeping their identity somewhat hidden. Additionally, it rewards liquidity providers (LPs), who deposit assets either side of a liquidity pool, with a portion of the trading fee.

The below graph shows the trading volume by Pool name over the past few months on Thorchain network on a daily basis.

Here is the visual that shows the trading count across each Pool name over the Thorchain network in the past few months.

Traders compare the exchange rates on THORChain with the rates on external markets. If they find the price is lower on THORChain they can buy there and sell on an external market. If they find the price is lower on external markets they can buy there and sell on THORChain. This process is repeated at high-frequency. Over time, price information propagates and THORChain settles with external markets.