RUNE Token Soars as THORSwap Resumes Trading
The native token of THORChain, RUNE, experienced an impressive 8% increase overnight as trading resumed on the leading exchange, THORSwap. The exchange had suspended trading last week due to the alleged involvement of illicit funds linked to the FTX exploit in November 2022. However, services such as lending, borrowing, and staking remained unaffected.
THORSwap utilizes the assets deposited on THORChain, a layer-1 blockchain designed for interoperability between different blockchains, to provide liquidity for cross-chain swaps. To prevent the flow of illicit funds and ensure legal compliance, the exchange introduced additional measures in its “terms of service” before resuming trading.
Prior to the positive reversal, RUNE had been in a downtrend, falling by 27% over the week. However, following the announcement of trading resumption, both RUNE and the governance token of THORSwap, THOR, experienced significant price increases of 8% and 11.5%, respectively.
Increase in Trading Volumes
The trading volumes via THORChain saw a notable surge on Thursday, reaching $62 million. This was a significant improvement from the previous days when volumes had dropped below $30 million. These figures were reported by the THORChain Explorer.
Decentralized exchanges (DEXs) like THORChain and Uniswap have implemented guardrails to identify and block transactions associated with financial crime. Uniswap partnered with TRM Labs in April 2022 to analyze and prevent illicit activity.
Some users expressed concerns about the new rules, arguing that they contradict the principle of decentralization. Crypto researcher Matt Ahlborg criticized blanket bans, stating that they negatively impact innocent individuals. In response, a supporter of THORChain defended the measures, suggesting that users from sanctioned countries can utilize alternative applications.
Hot Take: Balancing Compliance and Decentralization
The resumption of trading on THORSwap has brought positive momentum for the RUNE token and THOR governance token. However, the introduction of stricter rules to prevent illicit funds raises questions about the balance between compliance and decentralization. While measures are necessary to ensure legal compliance and protect against financial crime, it is crucial to consider the potential impact on innocent users. Finding a middle ground that upholds regulatory standards while maintaining the core principles of decentralization remains a challenge for decentralized exchanges.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
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