0xResearch
The End of Wrapped Tokens: THORChain's Native-Asset Edge | Chad Barraford
Aug 30, 2023
Chad Barraford, Technical lead of THORChain, disrupts the notion of separate blockchain ecosystems. Protocol's lending for Bitcoin and Litecoin. Mechanisms to prevent vulnerabilities. Balancer exploit, Coinbase USDC deal, dYdX governance proposal, and Coinbase sharing revenue. Cross-chain capabilities of THORChain. Emergency shutdowns and decentralization in DeFi. Coinbase's stake in Circle and USDC governance. Unique features of THORChain lending. Dynamics of borrowing in a bear market. Transition from minting to borrowing in the reserve. Understanding V pool depth and its impact on trading. Role of virtual pool, bank runs, and fees. Discussion on emerging projects and innovative capabilities. THORChain's native-asset edge and increasing trade volume. Fees and future perspectives. Synthetics and derived assets.
01:23:37
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Quick takeaways
- Thor Chain offers decentralized loans on non-EVM chains with zero interest rates and no liquidations.
- Thor Chain's unique security model ensures validators have greater economic incentives to protect the network.
Deep dives
Thor Chain Lending
Thor Chain has launched a lending protocol that allows for decentralized loans on non-EVM chains like Bitcoin, Doge, Litecoin, etc. The protocol offers loans with zero interest rates and no liquidations. Users can open a loan by swapping their collateral into a derived asset called Thor BDC. The debt is obtained in the form of a stablecoin called Tor. The loan process involves four swaps: collateral to Thor BDC, Thor BDC to Tor, Tor to Rune, and Rune to the desired asset. Closing a loan follows the same process in reverse. The lending feature has seen around 300,000 Rune ($500,000) bought and burned in less than 48 hours since its launch.
