July 20, 2019
On Friday, July 19th, we had a great AMA with THORChain, the lighting fast liquidity protocol, in our Telegram Chat. The key points of the talk were THORChain platform BepSWAP, their interest to Atomic Wallet and technical features of the project. The questions of our community were intelligently handled by Kai Ansaari, the Project Lead of THORChain and Jean-Paul Thorbjornsen, advisor and one of the researchers for the project. Here are some essential points of the session:
Please, welcome Kai (K), JP (JP) and the questions from our Telegram chat members (Q).
Q: What is exactly your project about?
K: THORChain is a liquidity protocol aiming to create a massive marketplace of liquidity through cross-chain bridges & continuous liquidity pools which enable people to swap between digital assets on almost any chain, in a trustless & permissionless manner. Swaps happen almost instantly at fair market prices with liquidity provided by stakers who earn fees on every swap.
Q: In your all network transactions which token we have to use as a transaction fees?
JP: There will be a USD pool, which will be connected with many different USD stablecoins, not risking them all and allowing traders to arbitrage the price to exactly $1. We anticipate the rUSD to be the most stable and reliable stablecoin. On-chain the tx fees are needed to prevent DoS attacks, but unlike other protocols, all tx fees BURN Rune, which means the supply of RUNE is forever capped at 1 bn.
Q: How did you determine the number of coins to be sold?
JP: RUNE needs to be widely distributed. There are a few measurements:
- 1) initial DEX offering and associated sales (130m);
- 2) marketing, like the BNB and ATOM hard spoon (120m);
- 3) Operational Reserves such staking in pools, such as the upcoming AWC pool (130m);
- 4) on-chain emission (500m). By allocating it this way, it means many participants can be involved and receive RUNE.
Q: We know mobile apps are the best things people use their phones for every day, So, are you planning only for web version or we can expect Android/IOS app?
K: THORchain is primarily a protocol. We live & breathe the trustless, permissionless, non-custodial, censorship resistant philosophies; which is why we have already done some R&D to enable almost anyone to build their own interfaces for staking & swapping. This will come later in the roadmap. One way this can be achieved is through progressive web apps!
Q: 3. After joining BEPSwap, It is likely to open so many opportunities for ANKR like -Liquidity & incentive. But I am curious to know how is it going to benefit Rune community or Rune users?
JP: Each pool requires RUNE to be staked alongside the other asset. This solves the following problems:
- 1) It creates a one-many relationship, which is much less complex than a many-many relationship;
- 2) the Rune token will be deeply liquid, which supports weaker coins as they will inherit its liquidity;
- 3) the RUNE token also provides economic security. It means if $10m in external assets are staked, then RUNE staked must also equal $10m.
Q: With your BEPSwap platform, Is it right to say that RUNE could truly be a blessing for the entire crypto space?
K: If you look at some products like UniSwap, they don’t have or need a protocol level token. It’s actually really important for THORChain particularly because Validators will need to be economically incentivised not to collude & run away with main chain assets – it’s something we’ve spent months on and we believe we have the right structure. The other interesting thing about $RUNE is that it’s the settlement currency and is being staked alongside each asset in pools. We simply cannot achieve the almost instant swaps we envisioned without $RUNE.
Q: Decentralized Exchanges like switcheo and Nash support different Blockchain tokens on a single platform, how THORChain will be better than those platforms?
JP: BEPSwap will start with 11 validators. Some of who may elect to run these validators will come from the community, as well as launch partners. BEPSwap won’t charge any fees, since it is more important to ensure the market adopt it ahead of the upcoming THORChain mainnet. THORChain will have 100+ validators.
Q: How many tokens will be owned by the foundation & founders? Is there a vesting schedule? What companies are you partnered with or seeking to partner with?
JP: Only a max of 100m (10%) is owned by the teams (made of three teams from three separate companies – MNV, Swishlabs, Chainfuel). Vesting is over 15 months. We’re pursuing BEP2 projects for start! Then next year we’re planning for mainnet, the team will be busy integrating other blockchains, such as BItcoin.
Q: Where are you physically based out of? What milestones do you have in place? How will you inform investors when milestones are achieved?
JP: Our team is all around the world, but HQ in Melb, Australia. As for announcements, Kai will release a weekly blog. =)
Q: BEPSwap offers partner token holders a way to monetise held tokens through a staking system that provides BEPSwap with liquidity for loans? More particularly, are staked tokens locked for a minimum period of time? How is ownership of staked tokens managed given BEP2 tokens have no smart contracts available? Is the ROI for a token variable based on lending demand or is it a fixed ROI % across all tokens in the BEPSwap platform?
JP: There is no minimum or maximum time or amount. Join and leave whenever you wish. As for ownership, an external statechain observes and manages state relating to the pools, with assets secured by threshold signatures. And ROI is dependant only on volume and liquidity depth.
Q: Can you tell me why you use cross-chain bridges rather than atomic swaps? What is the advantage?
JP: Great questions! Cross-chain bridges are better than Atomic Swaps. Atomic Swaps involve a complex 6-8 process of signing cryptographic keys between two parties that require interactivity. You also need a counterparty on all trades. Cross-chain bridges, coupled with continuous liquidity pools means you don’t need a counterparty, and swaps can happen in less than a second. It is a much better UX.
Q: How do you think to mitigate the risk of someone manipulating the symmetrical liquidity pool. And are you taking steps to prevent liquidity wash trading?
K: The great thing about CLP’s (Continuous Liquidity Pools) is that they can only contain real main chain assets – unlike say exchanges where there are a lot of buy/sell walls ie. artificiality. Centralised exchanges have also been known to offer low & zero fees for market making which leads to massive manipulation. If someone tries to game the pools they open themselves up to massive losses because economically incentivised actors will be watching on and balancing the CLP’s. There are also small fees for withdrawing which prevents against known attacks so anyone who is trying to game the system will also incur losses in CLP withdraw fees and protocol fees.
Q: Why did you choose to partner with AWC and what were the advantages over other projects?
JP: Atomic Wallet is a fantastic platform that we are looking forward to integrating BEPSwap into. Hopefully, Atomic Wallet will allow users to STAKE and SWAP directly inside the wallet interfaceю This is possible because AWC can ping the statechain to return the pool data via websocket & API. Users can then (at the speed of a Binance Chain block of ~300ms) stake, swap, withdraw and send. =)
Since Atomic Wallet is a multi-asset platform, it also means they are perfectly suited to being the wallet of choice for THORChain.
K: I was using Atomic just today, the UX is amazing and solves the problem of having one wallet for every digital asset (who wants that?). The convenience of asset swaps (even atomic swaps) is handy in-wallet.
As JP indicated above, we have endless possibilities to work together on complementary value propositions. JP: imagine staking your Bitcoin right inside the Atomic Wallet, or swapping litecoin into monero, and sending it immediately away.
Q: What will be the duration of staking or it will customisable by the user?
JP: you can come and go anytime you want. You don’t lock up assets for a certain period of time.
Q: What is your Monetary Policy? Inflationary? Deflationary? Fixed supply forever or additional tokens to be issued?
JP: Fixed supply forever! Great question. Instead of constantly emitting (infinite supply like Cosmos or Ethereum) or reducing the emission down to zero (Bitcoin) the team elect to match emissions to the difference between current circulating supply and the max supply, as well as burning fees. This means: Fixed supply of 1bn means token holders don’t get diluted; Constant emission means validators constantly get rewarded; Constant burn means emission stays high.
Q: My questions are about adoption. How scalable is the network to handle the load once it goes mainstream? Will there be community voting on tokens adopted for staking? Will there be B2B tie-ups with other exchanges, too?
K: We’re confident we can scale. We start with 11 validators but this can be in the hundreds with very fast block times and instant finality. It’s trustless, permissionless – Validators can vote in new bridges. Initially we will influence which first bridges will be added. But then over to the validators! Once mainnet is launched we don’t need to work with exchanges. We’re providing a massive liquidity marketplace. Exchanges will be able to integrate via websocket/api to provide liquidity & arbitrage though.
Q: What has been the biggest challenge that you overcame?
JP: Threshold Signatures!!! TSS is new and exciting and makes this all possible. With TSS – it means there is no trusted setup and no private key – ever! The 11 parties must always cooperate to process BEPSwap transactions.
Q: Where do you see the project in 5 years time?
K: 4- 5 years time is a huge time horizon in crypto. I see THORChain & Atomic wallet leading in innovation solving asset ownership, transfer & swaps in a multi trillion dollar market cap. I imagine THORChain to hold billions in liquidity processing hundreds of millions in asset swaps daily.
Q: What is your next big boom plan?
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