Podcast Summary
Discussing Thorchain's mission and how it works with Chad Barraford and Eric Voorhees: Thorchain is a decentralized finance project enabling instant, permissionless, and borderless transactions through a decentralized liquidity pool. Its native token, Rune, plays a crucial role in the ecosystem, and the project aims to disrupt the traditional financial landscape.
Thorchain is a decentralized finance (DeFi) project aiming to create a borderless, decentralized economy. Chad Barraford, a core developer, and Eric Voorhees, a Bitcoin OG, joined the podcast to discuss Thorchain's mission and how it works. Thorchain is designed to be a decentralized liquidity pool, enabling users to swap and earn yields on various cryptocurrencies. The native token, Rune, plays a crucial role in the ecosystem, capturing value through transaction fees and staking. The conversation highlighted Thorchain's potential to disrupt the traditional financial landscape by providing instant, permissionless, and borderless transactions. Eric described Thorchain as the spiritual successor of his old centralized exchange, Shapeshift, as both aim to enable seamless, trustless value transfer. Sponsors Kraken, Metamask Portfolio, and Arbitrum were also discussed, emphasizing their role in advancing the crypto industry and providing essential tools for users. Overall, the conversation provided valuable insights into Thorchain and its potential to contribute to the bankless future.
Decentralized Exchange Connecting Multiple Blockchains: Thorchain is a non-custodial, cross-chain DEX enabling swapping between various assets on different blockchains, increasing interoperability and accessibility.
Thorchain is a decentralized exchange (DEX) that enables cross-chain swapping between various assets on different blockchains, such as Bitcoin, Ethereum, AVAX, BNB, Doge, Litecoin, and more. Unlike traditional DEXs built on Ethereum using smart contracts, Thorchain operates on its own Cosmos chain with a validator set, allowing for the custody and control of funds during trading or swapping. Thorchain's goal is to act as a middleware layer between different blockchains, increasing interoperability and integration. Eric Voorhees, a crypto OG and the creator of ShapeShift, was drawn to Thorchain due to its non-custodial nature and the ability to operate outside of regulatory pressures experienced with centralized exchanges. Thorchain's unique approach to being a cross-chain DEX has the potential to transform the crypto space by making various blockchains more accessible to each other.
Decentralized Exchange Thorchain enables Bitcoin and Ethereum trading without intermediaries or KYC checks: Thorchain is a decentralized exchange that allows for trading of Bitcoin and Ethereum without intermediaries or KYC checks using smart contracts and Cosmos interoperability standard.
Thorchain is a decentralized exchange (DEX) that allows for the trading of Bitcoin and other major cryptocurrencies without the need for intermediaries or Know Your Customer (KYC) checks. This is made possible through the use of smart contracts and the Cosmos interoperability standard, which enables Thorchain validators to run full nodes of multiple blockchains and facilitate cross-chain swaps. The project's origins can be traced back to 2018, but it wasn't until the technology and infrastructure were in place in 2019 that the team was able to launch Thorchain. The system works by observing transactions on various blockchains, executing swaps through automated market makers, and assigning transactions for the distribution of the new cryptocurrency. The only requirement for using Thorchain is the ability to sign transactions on the respective blockchains. Thorchain remains the only DEX that enables trading between Bitcoin and Ethereum at scale on their native layer 1 networks.
Thorchain functions as an AMM exchange for swapping assets across blockchains: Thorchain enables asset swaps between different blockchains without intermediaries, eliminating bridge risks and maintaining user sovereignty
Thorchain is not a cross-chain bridge in the traditional sense. Instead, it functions as an automated market maker (AMM) exchange, allowing users to swap native assets between different blockchain networks without the need for intermediaries or bridged assets. This setup eliminates the risks associated with bridges, such as prolonged exposure to bridge risk and the added centralization. Thorchain's security model relies on economic incentives, ensuring honest behavior and maintaining the integrity of the system. Users can swap their assets on one blockchain for native assets on another without the need to trust a third party or communicate between the two chains directly. This approach allows users to maintain sovereignty over their assets while accessing the benefits of various blockchain ecosystems.
Thorchain's Economic Security: Thorchain ensures validators invest more than assets secured, making attacks unprofitable, and provides stakers with network yield through trading fees and block rewards.
Thorchain stands out among cross-chain systems due to its economic security. Unlike other platforms where the value securing assets may be worth less than the assets being secured, Thorchain ensures that the value of the network's assets is always worth more than the validators' risk. This is accomplished through a design where validators must invest more money than the value of the assets they are securing, making attacks unprofitable. The incentive for stakers comes from the network's yield, which is generated through trading fees and block rewards. The network balances the rewards between liquidity providers and validators using a mathematical equation. Thorchain's native asset, Rune, has a hard cap of 500 million tokens and is integral to the network's functioning, as it drives value through various activities such as swapping, providing liquidity, opening loans, and running validators. This integration of Rune into the network's economy has contributed to its recent adoption and price increase.
Thorchain uses Rune as an intermediary token for all trades: Thorchain's design with Rune as an intermediary token reduces the need for multiple pools, maintains non-custodial nature, prevents liquidity fragmentation, and allows for efficient trading with lower fees.
In the Thorchain system, the Rune token plays a crucial role in facilitating non-custodial trades between assets, acting as an intermediary token. Unlike Uniswap, where assets are traded directly against each other, Thorchain uses Rune as a substrate for all asset trades, reducing the need for multiple pools for each asset permutation. This design maintains the non-custodial nature of the system, prevents liquidity fragmentation, and allows for more efficient trading with lower fees. Additionally, Rune's increasing value is driven by the adoption and trading volume on the platform, creating organic demand for the token. This design choice is essential for Thorchain's economic security and efficient trade execution.
Rune's value linked to secured assets and liquidity pools: Rune's value influences liquidity pools, incentivizing arbitrage bots to balance prices and maintain security in the Thorchain decentralized exchange system.
In the Rune network, the value of Rune and the value of the assets being secured are intricately linked. Validators secure the network by staking Rune, and the value of this Rune rises and falls in direct proportion to the value of the assets being secured. Liquidity pools, which are made up of Rune and other assets, also have a value that corresponds to the Rune held by the validators. If the Rune price drops significantly, the value of the liquidity pools also decreases, creating an incentive for arbitrage bots to enter the market and restore the balance. This system ensures that there is a natural constraint on the amount of non-Rune assets in the system, preventing an overload and maintaining security. The majority of activity in the Thorchain system is in Bitcoin and Ethereum, making up about 2% of the global spot volume for these cryptocurrencies. This decentralized exchange system is a significant step towards decentralizing price discovery and moving away from centralized exchanges.
Thorchain's Streaming Swaps Improve Capital Efficiency and Price Execution in DeFi: Thorchain's implementation of streaming swaps enables large trades with low fees and high yield, as shown in a recent $6M trade from BTC to WBC, while Celo's layer 2 proposal brings advantages to Ethereum and sees increasing adoption with over 500% growth in active addresses in the last 6 months.
Thorchain's implementation of streaming swaps has significantly improved the capital efficiency and price execution in decentralized finance (DeFi) transactions, allowing for massive trades with relatively low fees. This is evidenced by a recent $6,000,000 trade from Bitcoin to WBC, which was 50% larger than the pool size but only incurred 45 bps in fees. The yield generated from these trades is also significantly higher due to the lower number of participants in the pool compared to larger DeFi platforms. Additionally, the trade execution speed can be adjusted based on the size of the trade and the depth of the pools being traded with. The Celo layer 2 proposal aims to bring Celo's rapidly growing ecosystem to Ethereum, offering advantages such as decentralized sequencing, off-chain data availability, and 1 block finality, leading to increased security, a trustless bridge to Ethereum, and more real-world use cases for Ethereum without compromise. The adoption of Celo is also on the rise, with active addresses growing over 500% in the last 6 months.
Celo and Thorchain: Decentralizing Crypto Trading and Finance: Celo offers low gas fees and stablecoin USDV, while Thorchain enables decentralized Bitcoin trading, contributing to the decentralization of crypto trading and finance.
Celo, a community-governed Ethereum layer 2 solution, offers low gas fees and the ability to pay for gas using ERC20 tokens. It also introduces USDV, a stablecoin that shares yield with the protocols that mint it, backed by US Treasury bills. Additionally, Celo hosts GMX, a decentralized exchange for trading Bitcoin, Ethereum, and leading altcoins, offering perpetual futures, spot trading, and competitive pricing with self-custody. Thorchain, an older project, is important for the crypto landscape as it allows for trading of the largest digital asset, Bitcoin, without intermediaries for the first time. With Thorchain, Bitcoin trading can occur on a decentralized platform, providing a critical piece of infrastructure for the entire space. Celo and Thorchain both contribute to the decentralization of crypto trading and finance, allowing for more user control and innovation. Join the conversations in the Celo and Thorchain communities to shape the future of these projects and the crypto landscape as a whole.
Decentralized Finance Platform Thorchain Focuses on Cross-Chain Asset Swaps and Expanding DeFi Accessibility: Thorchain, a DeFi platform, offers cross-chain asset swaps, synthetics, savers, and lending, expanding DeFi accessibility beyond Ethereum. It's seen significant growth, improving network efficiency and performance, with plans for order books, limit orders, and wallet integrations.
Thorchain is a decentralized finance (DeFi) platform that specializes in cross-chain asset swaps with a focus on efficiency and accessibility. It started with an Automated Market Maker (AMM) and has since expanded to concepts like synthetics, savers, and lending, allowing users to access DeFi features with assets beyond Ethereum. Thorchain aims to make DeFi chain and asset agnostic, providing the same flexibility and power to assets previously isolated from Ethereum's DeFi ecosystem. Recently, Thorchain has seen significant growth, going from the 11th largest DEX to the 3rd, surpassing Curve in trade volume. This growth has led to improvements in network efficiency and performance. Future plans include allowing any wallet in the world to trade with Thorchain and the addition of order books and limit orders, which will expand the network to traders and create a new marketplace. Integration with various wallets, such as Ledger and MetaMask, is also a priority to further expand accessibility. Overall, Thorchain's focus on cross-chain asset swaps and expanding DeFi accessibility sets it apart as a transformative technology in the crypto industry.
Decentralized exchange protocol for cross-chain trading: Thorchain enables seamless cross-chain trading between various blockchains, allowing users to trade assets not natively available on their DEX, with risks involved, learn more on thorchain.org.
Thorchain is a decentralized exchange protocol that enables cross-chain trading between various blockchains, allowing users to trade assets that are not natively available on the DEX they are using. For instance, Uniswap users can trade USDC for Bitcoin through Thorchain by exchanging USDC for Ethereum on Uniswap and then trading Ethereum for Bitcoin on Thorchain. Thorchain aims to make this process seamless and user-friendly. If you're a DEX interested in integrating with Thorchain or a wallet user looking to explore cross-chain trading, you can learn more about Thorchain by visiting their website (thorchain.org), following them on Twitter, or joining their Discord community. It's important to note that while cross-chain trading offers exciting possibilities, it also comes with its own risks, so always do thorough research before participating. Additionally, it's recommended for everyone in crypto to try out a cross-chain transaction, such as ETH to Bitcoin, to gain a better understanding of the technology and its potential benefits.
