原文标题:THORChain
原文作者：FIRoute 2 FI
Original source: https://substack.com/
编译：火星财经，Daisy
Hey friends!
Today we delve into THORChain, a project that I have invested in.
By the way, they have a rather "decentralized" community, remember to follow them on Twitter as well:
THORChain
introduce
The cryptocurrency space is rife with vulnerabilities of cross-chain bridges, crashes, and the collapse of centralized exchanges due to trust issues. However, there is an on-chain version that allows you to swap and earn the yield of the native token through your wallet without risking the cross-chain bridge. This is THORChain. Why is it so important to swap native assets before diving into THORChain and its history?
Currently, the only other way to exchange native assets is through centralized exchanges. This means that you need to perform KYC (identity verification) and rely on trust in these exchanges. After the collapse of FTX, people's trust in centralized exchanges has all but disappeared.
Some friends may think that it is possible to use a BTC bridge on Uniswap or SushiSwap to obtain wBTC through Ethereum, Polygon or even Ren protocols. Here's the thing: for example, Wrapped Bitcoin (wBTC) is a centralized Bitcoin managed by BITGO. BITGO is a company, and if they choose to shut down or the government seizes their assets, your wBTC will disappear as well. This applies to any parcel tokens, as they are created and managed by a centralized custodian.
THORChain 的历史
The concept of THORChain was first proposed in 2018 by a team that participated in Binance Dexathon, a decentralized exchange programming competition. THORChain facilitates cross-chain liquidity, reducing the need for centralized exchanges and third parties in the DeFi space. Now we know that JPThor is one of the founders.
Here's how it works
THORChain is a Layer 1 network based on the Cosmos SDK and Tendermint. It operates as a cross-chain permissionless decentralized exchange (DEX) and secures its leaderless asset vault through a Threshold Signature Scheme (TSS). Tendermint and TSS provide a hierarchical Byzantine Fault Tolerance (BFT) consensus mechanism where a two-thirds majority consensus is required for funds to flow in and out of the main TSS vaults.
THORChain allows users to swap native assets between multiple chains without the need to wrap or anchor assets. It ensures transparent and fair pricing without relying on a centralized third party. The protocol features continuous liquidity pools to maximize efficiency. THORChain manages funds directly in the on-chain vault and secures them with economic security without pegging or wrapping assets. It can be described as a "cross-chain automated market maker (AMM)" similar to Uniswap.
There are four key categories of users in the THORChain ecosystem:
- Asset exchanger: Swap assets using liquidity pools.
- Liquidity Providers: Add liquidity to the pool and earn rewards.
- Node Operator: Provide security deposit and get paid to ensure the security of the system.
- Arbitrage Trader: Monitor and rebalance pools for profit.
Asset swaps are achieved through liquidity pools, which are made up of assets contributed by liquidity providers and secured by a group of node operators. Liquidity providers deposit their assets into THORChain's liquidity pool to earn yields, which consist of swap fees and system rewards. Anyone can add liquidity to an existing pool, making THORChain permissionless. In addition, liquidity providers can propose new asset pools, provided that these assets are tokens in the ecosystem that support the chain.
Node operators, called THORNodes, are independent, and they communicate with each other to form a cross-chain exchange network. In return for exchanging network security, they receive a fee for each exchange as a reward. Before becoming a node operator, users must provide RUNE as collateral, which serves as collateral to ensure that the node operator acts in the best interest of THORChain. The total amount of RUNE staked must be twice the amount of RUNE in the liquidity pool.
During the asset exchange process, the exchanger sends their assets to THORChain and gets another asset. For example, when exchanging BTC for ETH, the exchanger sends BTC to THORChain. When BTC enters the network, there is a BTC to RUNE swap, followed by a RUNE to ETH swap. ETH is then sent from THORChain's vault to the exchanger. This process allows THORChain to swap native assets without the need to wrap assets.
The market price of THORChain is regulated by arbitrage traders, who profit from the price difference between different markets. This mechanism allows the market price of THORChain to adjust naturally without the use of oracles.
RUNE pool
RUNE is the native token of THORChain. In the network, it acts as a base pair for users to redeem RUNE for any other supported asset. It has a supply of 500 million tokens and has four main use cases: settlement, security, governance, and incentives.
RUNE as a settlement asset
RUNE is the settlement asset of all liquidity pools, facilitating swapping between the two pools. Each pool requires a 1:1 RUNE:ASSET ratio. For example, a pool with $100,000 in BTC would need to hold $100,000 worth of RUNE.
RUNE for security
To ensure security, node operators must bond an equivalent to twice the amount of RUNE they add to the pool. RUNE bonds are used as collateral to ensure that node operators act in the best interests of the network.
RUNE is used for governance
RUNE token holders can choose which assets or chains they want to prioritize. They do this by voting with liquidity.
RUNE incentives
Block rewards and swap fees are paid out in RUNE to liquidity providers and node operators in accordance with a set issuance schedule. RUNE can also be used to pay for gas.
Tokenomics
The initial pre-minted supply is 1 billion RUNE tokens, which are distributed through sales, rewards for providing liquidity, and direct distribution to early contributors.
In October 2019, THORChain chose to burn all "unused" reserve RUNE, which is about 50% of the supply (500 million tokens)
The price of RUNE is determined by two main factors:
1. Deterministic value based on intra-network liquidity
2. Speculative premium: For every $1 of non-RUNE assets on the network, the network incentivizes to lock up $3 of RUNE.
As of the beginning of 2022, all tokens have been unlocked for investors, teams, and operational reserves.
The remaining issuance (about 40% of the supply) is used for liquidity incentives and THORNode rewards. No one is going to abandon you, and the MC:FDV ratio is pretty modest at 0.828.
Rune pools
When you deposit RUNE into a RUNE pool, it is allocated to multiple pools of blue-chip assets, including BTC, ETH, BNB, AVAX, ATOM, BCH, LTC, DOGE, USDC, USDT, and other major assets on the network. This diversification helps mitigate the effects of impermanent loss while providing stable returns.
How the RUNE pool works
The RUNE pool works in tandem with THORChain's protocol-owned liquidity (POL). When you enter the RUNE pool, you are actually buying liquidity from POL, which provides additional deposit capacity for POL. This system exposes your position to price fluctuations across multiple asset pools, providing more stable and diversified gains than a single dual LP.
It is important to note that the RUNE pool has a minimum deposit (lock) period of 90 days, counting from the user's last deposit. The capacity of the pool is determined by the total amount of protocol-owned liquidity on the network, and a 2% fee is deducted from the profit withdrawn from the RUNE pool. If you withdraw without a profit, there are no fees, and there are no fees for depositing to the RUNE pool.
conclusion
THORChain provides liquidity to traders and provides instant finality to all operations on the network while reducing the risk of impermanent loss. Users can easily exchange top cryptocurrencies from different networks in a decentralized environment with a user-friendly interface.
THORChain provides a custodial-free exchange service for cryptocurrency users, and the ever-expanding range of supported cryptocurrencies provides a smooth user experience. With its technical capabilities and innovative technology, THORChain has the potential to become one of the leading DeFi projects.
Alright, that's all for today.
Take care!
Good bye.