What Is THORChain? How It Works, Fees and Safety

THORChain is a Layer-1 blockchain that runs a decentralized exchange for swapping native coins such as BTC, ETH and DOGE across chains, with no wrapping. Liquidity sits in pools paired with its RUNE token, a rotating validator set controls the vaults, and swappers pay a slip-based liquidity fee plus gas on each side.

This guide covers how THORChain works, what a swap costs, what has gone wrong, and where things stand as of October 2026.

How THORChain works

THORChain describes itself as a Layer-1 network built to move value between other blockchains. You swap from your own wallet with no account or identity check, and the protocol only holds inbound coins for as long as the swap takes. Its documentation lists Bitcoin, Ethereum, BNB Smart Chain, XRP Ledger, Solana, Tron, Zcash, Dogecoin, Bitcoin Cash, Litecoin, Avalanche, Base and Cosmos Hub as connected chains, and it notes that individual chains are sometimes paused.

RUNE: the asset in the middle

RUNE has four jobs in the system:

• Settlement. Swaps settle through RUNE, and every pool pairs an external asset with RUNE. A BTC-to-ETH trade therefore moves through two pools.
• Security. Node operators bond RUNE to join the validator set, and the bond is at risk if they misbehave.
• Liquidity. Liquidity providers deposit RUNE next to the paired asset.
• Governance. Active node operators vote on network parameters through a mechanism called Mimir.

Continuous liquidity pools and the slip-based fee

THORChain has no order book. Trades execute against Continuous Liquidity Pools (CLPs), and each pool holds a RUNE balance and an asset balance. The output starts from a constant-product curve, and then a fee scaled to the trade's own slip is taken out. Slip is the input amount divided by the input amount plus the pool's depth on that side. Small trades in deep pools pay very little, while large trades in shallow pools pay a lot.

The docs give the reasoning: fees rise when demand on a pool rises and fall toward zero when it fades. That keeps pools solvent and gives arbitrageurs a reason to pull prices back toward the wider market. Governance can also set minimum fee floors, in basis points, for different asset classes, so tiny trades never pay literally nothing.

Vaults, Bifrost and threshold signatures

Bitcoin has no smart contracts, so THORChain doesn't rely on them there. Every node runs a service called Bifrost that watches the connected chains for deposits to the network's vaults. Nodes need 67% agreement on what they observed before the network acts on it. Outbound payments are signed with a threshold signature scheme (TSS): a supermajority of the nodes in a vault must cooperate, and no single operator holds a full private key. Vaults are split into shards of about 20 nodes by default, and funds migrate to new vaults as the validator set rotates, a process called churning.

Memos: how a swap is instructed

Your instructions travel as a memo attached to the deposit transaction. The swap format is SWAP:ASSET:DESTADDR:LIM/INTERVAL/QUANTITY:AFFILIATE:FEE, usually shortened with = or s. The limit field sets the minimum output you'll accept. If the network can't meet it, the deposit is refunded. An optional refund address can follow the destination. On Bitcoin the memo sits in an OP_RETURN output, which is capped at 80 bytes, so interfaces shorten memos as much as they can. Because the memo carries your destination and your price protection, it has to be exact. Front-ends generate it for you.

Streaming swaps

A slip-based fee makes big trades expensive, so THORChain can split them up. A streaming swap breaks one order into sub-swaps spaced a set number of blocks apart, which lets arbitrageurs rebalance the pool between pieces. The interval and quantity go in the memo, and a quantity of 0 lets the network choose. A stream can't run longer than 24 hours (14,400 blocks). The newer swap queue streams ordinary swaps by default with tuned parameters, and /1/1 forces a single execution. The cost is time: a large streamed swap takes far longer than a single-block trade.

THORChain swap fees

A THORChain swap has no single headline percentage. The developer docs list these components:

Fee	Where it comes from	How it's calculated
Inbound network fee	Source chain	The normal gas or miner fee on your deposit transaction
Liquidity (slip) fee	THORChain pools	Slip multiplied by the swap amount, with governance-set minimum floors
Affiliate fee	The interface you use	Basis points written into the memo by the front-end
Outbound fee	Destination chain	Destination gas multiplied by a dynamic factor between 1x and 3x
Native transaction fee	THORChain itself	0.02 RUNE for transactions that start on THORChain

Refunds aren't free, because the network deducts an outbound fee when it sends coins back. And the docs recommend a minimum swap size of of at least four times the largest of the source-chain outbound fee, the destination outbound fee and $1, because a swap whose fees approach the input will probably be refunded.

Fee policy is still changing. THORChain's Q2 2026 quarterly report says a dynamic fee model (ADR-026) shipped in v3.18 in May 2026. It's off by default and is being turned on for whitelisted partners. Go by the quote you're shown, not a fee table.

THORChain's incident history

Any honest safety answer starts with the record:

When	Incident	What happened	Outcome
July 2021	Ethereum router exploits	Several attacks within about a week abused the way Bifrost read Ethereum router events. THORChain's post-mortem put the resulting insolvency at roughly $16M.	The treasury covered liquidity providers' losses. Audits by Trail of Bits and Halborn followed.
January 2025	THORFi lending and savers halted	An admin key paused Lending and Savers on January 9, and node operators reversed it the same day. Nodes then voted to pause both on January 24, with about $200M owed to users.	The debt was converted into TCY: 1 TCY per $1 owed, with 10% of network revenue paid to TCY stakers.
February 2025	Bybit hack proceeds	After the February 21 Bybit hack of more than $1.4B, THORChain processed over $5.4B in swaps. A node vote to block hacker-linked funds was reverted, and a core developer quit.	Reputational damage; no protocol loss reported.
May 15, 2026	GG20 TSS exploit	A newly churned node operator exploited a flaw in the GG20 threshold-signature implementation, rebuilt one vault's private key, and drained about $10.7M from one of five vaults.	The network was down about five weeks and restarted on June 22 with patched TSS code. As of the Q2 report, the financial recovery was unresolved.
September 26, 2026	Rujira FIN contract bug	On the app layer, an attacker moved a concentrated liquidity position they didn't hold. Only a Rujira-team position was affected.	The app layer was paused, and the fix is scheduled for v3.21.
October 2026	ZEC outbound matching bug	A bug in how outbound Zcash transactions are matched was treated as a vault fault. It slashed about 140 RUNE from 18 node operators' bonds.	No user funds were lost. Native ZEC trading was halted pending the v3.21 upgrade.

The incidents differ in kind: integration bugs in 2021, a failed lending design in 2025, and an attack on vault cryptography in 2026. THORChain's exploit report notes that EdDSA-based chains such as Solana weren't exposed to that last class of attack.

THORChain news: where things stand in October 2026

The next milestone as of 22 October 2026 is v3.21, which activates at a set block height rather than on a fixed date, so check THORChain's own channels for whether it is live. Reports say the upgrade patches the Rujira position-transfer flaw and restores Solana trading (disrupted by a new Solana transaction type), native ZEC trading and limit swaps (paused by a state-growth bug), subject to node operator approval.

Other 2026 changes from the Q2 quarterly report: about 65M RUNE was burned in April with v3.17, bringing total supply to roughly 360M, and the quarter closed with about $2.06B in volume and $2.37M in swap fees.

Is THORChain safe now?

THORChain isn't custodial the way an exchange is: there's no account, and nobody can freeze a balance in your name. But while a swap is in flight, your coins sit in vaults controlled by the validator set. You are trusting the TSS cryptography, the node operators' incentives, and the code that observes each chain. The May 2026 incident showed that a cryptographic flaw can get around bond-based security, since the attacker was a newly churned-in node operator rather than an outsider.

On the other side, the restart included staged key verification across node keyshares, legacy vaults were retired, and assets moved to a new vault set. Even so, halts have been frequent enough that you should plan for delays and refunds. Some sensible habits:

• Check whether your source or destination chain is halted before you send anything.
• Always set a minimum output (the limit), so a bad price becomes a refund, not a loss.
• Set a refund address you control, and send a small test first on any new route.
• Don't route funds you might need urgently, because a halt can hold a swap for days or weeks.

How to swap native BTC without THORChain

THORChain isn't the only way to move native bitcoin across chains. Two other designs are in production.

Chainflip

Chainflip is a proof-of-stake network of 150 validators. Its vaults are controlled with the FROST threshold signature scheme, and a signature needs 100 of the 150. Pricing comes from a just-in-time AMM in which market makers compete to fill each swap. You send native BTC to a generated deposit address and receive native assets on chains such as Ethereum, Solana and Arbitrum. Chainflip's guide lists a 0.1% protocol fee on top of network fees.

NEAR Intents

NEAR Intents takes a different approach. You state the result you want, market makers (solvers) bid to fill it, and a Verifier contract on NEAR settles the trade atomically, refunding you if it can't execute. Withdrawals to external chains go through token bridges. The public 1Click API lists native BTC and ZEC among its supported assets.

	THORChain	Chainflip	NEAR Intents
Liquidity model	RUNE-paired pools	JIT AMM with competing market makers	Market makers bid on each intent
Who holds funds mid-swap	Validator vaults (TSS)	Validator vaults (FROST)	Verifier contract and token bridges
Pricing driver	Pool depth and slip	Market maker quotes	Market maker quotes
Native BTC	Yes	Yes	Yes

None of these is risk-free. Each puts your funds briefly under some combination of validators, contracts and market makers. Comparing them on each trade means one network's halt doesn't strand you. TorrentSwap compares NEAR Intents, Chainflip and Flashnet routes for the same pair and shows the result with every fee already in the quote. For example, here's the BTC to ETH route.

The bottom line

THORChain showed that native cross-chain swaps can work, but its history shows that every layer can fail: contracts, economics and cryptography. Treat it as one route among several, and use a limit on every trade.

If you've been swapping through a THORChain front-end and want a backup for native BTC, read our guide to THORSwap alternatives. It compares routes that need no account, include every fee in the quote, and never hold your funds.