What happened
One of the more impressive movers in the market (once again) today is THORChain (RUNE -2.84%). As of noon ET, this token has appreciated 21.4% over the past 24 hours, marking the second-largest move among top-40 cryptocurrencies today.
Impressively, today's price action is a continuation of some sky-high momentum for this token over the past month. Since the beginning of March, THORChain's Rune token has gone parabolic, shooting more than 180% higher.
Image source: Getty Images.
This move comes as the THORChain network sees impressive growth in total value locked among its network, particularly as a result of the THORSwap decentralized exchange, which allows for users to transact "across multiple blockchains without wrapped/pegged assets and without a centralized counterparty."
So what
THORChain's Rune token is the governance and utility token of the THORChain network. This cryptocurrency gains value as the network's ecosystem grows. Total value locked (TVL) is a key metric used to determine how much value is locked within a given network, which gives a rough justification for the market capitalization certain tokens receive. Additionally, other metrics such as transaction volumes play a big role in determining the growth trajectory of a given token.
In the case of THORSwap, some pretty impressive numbers have been posted on the project's Twitter page. THORSwap reported March transaction volume of $470 million, representing roughly 900% growth. This also represents all-time high volume, with daily transactions approximating $20 million as of today.
Key factors for this growth have been THORChain's launch of Terra as well as an upcoming integration of the THORSwap cross-chain aggregator V1. Upon integration, this aggregator will allow users to swap any ERC-20 (Ethereum-based) token with Bitcoin and Terra's TerraUSD and Luna tokens.
Now what
THORChain's rise, mostly attributed to the success of its core decentralized exchange, is noteworthy. While this network's aggregator is not expected to be launched until June, investors have reason to believe that this decentralized exchange will see impressive growth over the medium-term. Accordingly, the network's Rune token is front-running these expectations right now.
Of course, risks always abound in the crypto world, particularly for tokens that have appreciated so much, so quickly. Accordingly, investors looking at THORChain right now may want to ease into a position or wait for dips before jumping in. That said, the momentum with this token is impressive right now, suggesting there could be more substantial upside on the horizon in the near-term for this project.
