Thorchain – A Decentralized Liquidity Network For Instant Digital Asset Swap Immune To Manipulation
The Blockchain infrastructure base is growing quickly, which is a necessary prerequisite for global adoption on a wide scale, but there are other obstacles to its acceptance by the general population.
One of those obstacles is the manipulation of volumes and prices by some digital asset exchanges, causing concern for both users and regulatory bodies.
The Tie, a research outfit recently reported that almost 90% of trading volumes on exchanges are dubious. For instance, it was revealed that of the top 100 crypto exchanges analysed, 75% of the recorded trading volumes were fake.
THORChain is a decentralized liquidity network that permits users to trade assets spontaneously at manipulation-immune market prices. The liquidity protocol is based on Tendermint and Cosmos-SDK, utilising Threshold Signature Schemes (TSS) to create a marketplace of liquidity for digital assets to be traded in a trustless, permissionless, and non-custodial manner.
In a chat with QBITtimes under the Blockchain Start-up series, Kai Ansaari, THORChain project Lead noted:
“The protocol is designed to encourage asset holders, swappers, and traders to participate in a massive Marketplace of Liquidity (MoL) underpinned by cross-chain bridges and continuous liquidity pools. THORChain’s liquidity marketplace obviates the need for order book exchanges when simply swapping one asset for another. It provides ancillary benefits, including manipulation resistance and on-chain price feeds.”
Primarily, THORChain is the infrastructure that enables global users to exchange digital assets freely in a deeply liquid market without sacrificing security. RUNE is the native currency which powers the THORChain ecosystem and renders the economic incentives required to secure the network.
Ansaari explained that RUNE has the following four key roles:
As the native currency of THORChain, RUNE functions as the transaction fees on the network. It includes user-initiated transactions, pool settlements (double swaps), and governance proposals, among others. The Whitepaper indicates that all transaction fees on THORChain would be burned to ensure the total supply of RUNE never reaches the theoretical one billion limit.
Validator, Staking And Rewards
With Proof of Stake (PoS) as the underlying technology on the Tendermint BFT consensus engine, the platform uses economically incentivised validators to secure the network. Validators are required to stake and bond RUNE for it to be accepted into the current validator set.
Malicious validators are punished for bad behaviour by having their RUNE stake slashed. Block rewards are paid to validators ensuring value is transferred to those securing the network without diluting the value of those who demand security from the network.
RUNE is also used for governance, facilitating a vote on issues in the ecosystem by holders, such as adding new bridges, dealing with side-chain forks, and enabling other events. Proposals, as well as votes on them, require RUNE.
RUNE is, more so, the base currency in the ecosystem, required to be staked alongside every asset in pools. The mechanism avoids value being diluted across many pools, which has been the case in other implementations.
Without a native settlement currency, each asset would need to be pooled with every other asset, which would eventually result in hundreds of new pools being created for just one new asset, diluting liquidity.
V0.1 | SEP 2018
V0.2 | Q1 2019
Exchange and trading modules built
V0.3 | Q2 2019
Ethereum 1-way Bridge
V0.4 | Q4 2019
Ethereum 2-way Bridge and BEPSWAP
V0.5 | Q1 2020
Mainnet launch with Bitcoin and Biance Chain bridges
V0.6 | Q2 2020
Launch with Ethereum, Litecoin Mainnet Bridge
V0.7 | Q3 2020
Launch with Monero, Loki Mainnet Bridge
V0.8 | Q4 2020
Launch with Developer Tooling for any altcoin bridge
Launch of the Flash Network
V1 | Q2 2021
Message To Community
The Project Lead told us that in seven days, a RUNE staking platform will be available at https://runevault.org/ and have more than 27% of the circulating supply staked from 160 THORChain Warriors!
“Our devs have also been very hard at work in making our upcoming BEPswap platform for swapping and staking BEP2 tokens as best as it can be,” Ansaari said. “BEPswap is THORChains first go-to-market liquidity pool platform and can be described as Uniswap for Binance Chain.”
He furthermore revealed that Prominent Launch partners such as Bolt, Fantom, ANKR network, and Atomic wallet are just a few that are on board with their vision to change the DeFI apps landscape. BEPswap will also use 50% of THORChains technology and will pave the way for the Mainnet launch in 2020.
With that in place, people will be able to stake and swap not only BEP2 tokens but Bitcoin, Ethereum, Monero and others, which will be truly groundbreaking in terms of DeFi apps current landscape. “All of this wouldn’t be possible without our engaged investors and community that shower us with constant love and support! We are determined to make them proud by delivering an outstanding and game-changing product,” he pointed out.