Virtual Pool, Bank Runs, and Fees

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The chapter explores the role of the virtual pool in protecting the network from price manipulation and the relationship between its depth, volatility, and trade volume. It also discusses the potential consequences of network trouble and how it could lead to a bank run. Additionally, the chapter explains how volatility in the layer one pool affects fees and the importance of measures to prevent an infinite flow of new assets entering the supply.

In today's episode we are joined by Chad Barraford, technical lead of THORChain, to chat about how the protocol works with layer-one assets, disrupting the traditional "island-like" view of blockchains as separate ecosystems. The protocol offers decentralized lending specifically for non-EVM chains like Bitcoin and Litecoin, aiming to always maintain liquidity. Key mechanisms are discussed to safeguard against vulnerabilities like price manipulation, ensuring that the protocol acts more like a 'bodyguard' to liquidity providers.

As always Sam and Dan are joined by 2 Blockworks Research analysts, Ren & Pibblez. The analysts explore the balancer exploit, Coinbase USDC deal, dYdX governance proposal, and Coinbase sharing revenue to Optimism.

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https://hexens.io/

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Timestamps:

(00:00) Introduction

(01:41) Hot-Seat Cool Throne

(27:02) Interview Start: Chad

(27:21) Headline Thorchain Offering

(43:54) “Hexens Ad”

(44:58) Virtual Pool Depth

(53:01) USDC or USD De-peg Scenario

(1:018) Streaming Swaps Explained

(1:09:00) Savers Adoption

(1:13:49) Product Roadmap

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Resources:

Lending on THORChain Explained

https://medium.com/thorchain/lending-on-thorchain-646bbf2e6e1b

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Disclaimer: Nothing said on 0xResearch is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Dan, Sam, and our guests may hold positions in the companies, funds, or projects discussed.