Thorchain AMA Recap

Thorchain AMA Recap

CryptoDiffer team

We are glad to meet here 

Josip Zdilar  (@JosipZ), Community/Marketing manager at Thorchain

Kai Ansaari (@tckai), Project lead at Thorchain

Leena M. (@leena156 ), Developer at Thorchain

Let’s CryptoDiffer x Thorchain AMA get started

Q1: Can you introduce yourself to the community? What is your background and how did you join Thorchain? 

Leena M.
Developer

I’m Leena from the THORChain research team. I help analyse and come up with answers to the hard problems around THORChain’s security, liquidity, economics and more. I also write some code when I get the chance =) I joined the team when I realised it was important for me to do so.

Josip Zdilar
Marketing manager

Hi! My name is Josip Zdilar. 

My academic background are two master’s degrees in Economics and Diplomacy/International relations. I have been involved with various projects and all things crypto since early 2017. 

I worked with various members of the THORChain team through different projects and have been an active member of the THORChain team since late 2018.

Kai Ansaari
Project lead

I’m Kai, project lead. Despite the fact the team has a flat structure & is self managed, I look after day to day product development & operations. I was around in the beginning when a team at the Binance dexathon here in Australia conceptualised the THORChain model.

CryptoDiffer team

Q2: Can you briefly describe what is Thorchain in 3-5 sentences? What technology stands behind Thorchain and why it’s better than the existing one?

 

Leena M.
Developer

In the eleven years since Satoshi Nakamoto launched Bitcoin and gave the world its first and most important digital asset built on economics and computer science, a pareto distribution of other digital assets have emerged from the free market each with different characteristics. However users have never had the ability to exchange them using similar principles. Current digital asset exchanges carry the same design as traditional financial exchanges, being custodial, competitive and centralised. What is missing is the ability to exchange digital assets in a manner that is non-custodial, connected and distributed. Such a network would have incentives for anyone to contribute to either security or liquidity, which should be tightly coupled so that the network is never unsafe. This network should be agnostic to other chains such that it can be connected to any, and must be able to scale sufficiently to handle connections to as many external networks as required. This network must be permissionless; anyone should be able to transact on it or contribute to it. This network must be resilient, being able to evade capture and continually stay live despite being run by a network of distributed anonymous nodes run from various infrastructure.

CryptoDiffer team

Q3: What are the major milestones you have achieved so far?

 

Kai Ansaari
Project lead

Well, the juicy milestones are for the most part ahead of us with Chaosnet right around the corner and mainnet (hopefully) in Q1 this year. Looking back, the public testnet was launched last year which was our first major milestone since the IDO in July 2019.

 

Cryptodiffer Community

Q1. Why does THORChain network decide to postpone the release of CHAOSNET and hope this delay won’t affect the Mainnet launch?

Q2.  What are the design goals of the CHAOSNET?

 

Kai Ansaari
Project lead

The space we’re in is relatively immature, both methods & goals are not always well defined and course corrections are sometimes required. The team decided to expand the scope of the audit, following some major additions to the product scope. 3x audits will be taking place, which we mentioned in detail here: https://medium.com/thorchain/an-update-to-chaosnet-and-milestones-6a15bf9a5fe2

 

The delay will give the community much more confidence in security and the CLP model the team chose.

 

Cryptodiffer Community

For Adoption, Good Marketing of Project & Platform is very Important So, Can you tell us about you Markeing plans for Good Development & Adoption of Thorchain?

As per website, ThorChain is the Lightning fast Liquidity Protocol So, can you explain that which Technology and consensus algorithms are used by ThorChain for Instant transactions ?

Josip Zdilar
Marketing manager

Marketing plans for 2019 are mainly divided into 2 categories: Incentivising users on the platform itself and on-boarding BEPSwap/Asgardex to other different platforms like online wallets/exchanges to increase exposure and user base. 

Even though the current incentivisation for users is extremely favorable for stakers, we will probably go one step further and offer incentivisation milestones for users that use the platform heavily.

 

Cryptodiffer Community

Hello, I’m mainly using Ethereum, big fan of DeFi and dapps like Uniswap, Synthetix, etc. From what I read about THORChain and from what I understood you’re basically cross-chain Uniswap. Nice.

How are we incentivized to participate in your system? What benefits do you expect the partnership with Synthetix to bring to the table? Do you plan to provide decentralized price feeds?

Josip Zdilar
Marketing manager

Yes, BEPSwap will be its own price oracle. Stakers are incentivised by the CLP formula which makes the platform much more attractive(larger fees) for liquidity providers. On top of that, the users are incentivised by network block rewards which they share with node operators.

 

Cryptodiffer Community

THORChain is an agnostic protocol to dynamically scale with assets, can you tell us more about your protocol and how do you scale assets?

Kai Ansaari
Project lead

The primary limit to how large committee sizes can be is that of TSS key-generation speeds. The network grows its TSS committee sizes for its primary vault as new nodes join. At some point, a new tss key gen ceremony will hit a pre-designated time-limit. The committee size at this point is the limit for the primary vault, and the network then chooses to shard the primary vault into two partitions, and continue growing them until they time-out again. This is continued until the network hits either the block consensus limit or the economic limit. 

Since the network uses tendermint consensus, there is a block consensus limit. Large committee sizes with inefficient connections with each other result in block timeouts, increased block times and poor network performance. Increased block-times reduce the block-based revenue for nodes and should reduce node count until back below an equilibrium. The network targets block-production speeds of around five seconds.  With a minimum bond limit, as well as a fixed-supply asset, there is an absolute maximum of the number of nodes that can participate, known as the economic limit. 

The network can scale to handle a significant number of connected chains, and a practically unlimited number of assets. Connected chains have a resource burden on the network, but this can be alleviated since light nodes that have been fast-synced are more than sufficient to function as chain connections. There is an asset listing cycle of a few days which ensures that only in-demand assets are listed and throttles how quickly new assets are added. Assets are listed in order of how much capital is staked towards them.

Cryptodiffer Community

One of the article of Coindesk.com titled “Decentralized Liquidity Is the Backbone of DeFi”

What can you say about this?

In regards with this What problems in Defi able to solve by THORCHAIN?

Leena M.
Developer

It is interesting you bring this up. Currently DeFi is not actually decentralised finance. From my assessment the best example of a decentralised finance application is UniSwap, which suffered its own censorship and is about to be replaced by a V2. MakerDAO has centralised management and price feeds, Dharma requires KYC and Compound Finance has a centralised admin key. 

Decentralised Finance to the team means a protocol that can resist capture, evade censorship and stay live in the face of adverstiy. That is the attack spectrum that THORChain builds to. 

Finance requires liquidity. MakerDAO has 150% collaterisation ratios because DAI isn’t liquid and auctioned CDPs don’t have price guarantees. THORChain tackles liquidity head-on. It IS liquidity. 

This will play a big part into the future. More protocols will be censored, more gitlabs will be shut out, more websites will be seized. Blockchain and cryptocurrency is first and foremost a peaceful revolution against oppression and control. As Satoshi said, one-cpu-one-vote. That’s the democracy we aim for, nothing less.

 

Cryptodiffer Community

How its history until the name Rune?

Josip Zdilar
Marketing manager

The ticker RUNE was borrowed from the Norse mythos like the whole branding aspect of our project. RUNE’s were letters of the old norse alphabet.

 

Cryptodiffer Community

Atomic swap is the first solution for people to swap assets as a trustless solution. However, Thorchain choose cross-chain bridges to build protocol instead of it. So, why is this? Which advantages can cross-chain bridges bring to both users and project ecosystem?

With Voting build inside, in positive side, Governance function of ThorChain will be fair when changing on key parameters Thorchain system. In negative side, how will Thorchain team prevent manipulating may happen when bad people try to buy big amount of RUNE (>51%), accquiring many Validators Nodes and make bad impact to Thorchain ecosystem?

Leena M.
Developer

I don’t think it’s possible to buy 51% of the RUNE. Nor is that threshold relevant. 33% + 1 of the Nodes is enough to cause a chain halt. You need 67% to steal funds.

 

Cryptodiffer Community

2019 was an eventful year for RUNE, in terms of future development, what milestones have you in place for Q1 2020 and share present and future partnerships that will drive you to success in this highly congested crypto space? 

Can you explain why MERKLECHAIN is Comparatively better than other chains and useful for SWAPS

Josip Zdilar
Marketing manager

We have around 12 launch partners for BEPSwap which will help jump-start the network. Other than that, we have raised investments from institutional investors which are alligned with the project and will further work on spreading the word, helping the network by operating nodes, and just generally offering their assistance in any way that they can. 

We are always on the lookout for perspective partnerships, and this will only increase once the platform is out. 

At that point our focus on partnerships will shift to onboarding BEPSwap to different partner platforms.

 

Cryptodiffer Community

How you will compare and differentiate  airswap , 0x, kyberswap and your swap?

Leena M.
Developer

Airswap: requires match-making. 

0x: requires match-making. 0x token is a governance token only.

Kyberswap: heavily uses uniswap liquidity, KNC is a governance token. 

Uniswap: Great. Love it. I have issues with its fixed-rate fees tho

 

Cryptodiffer Community

What is CLP algorithm? What is the relation between CLP algorithm and XYK concept?

Kai Ansaari
Project lead

The CLP formula is derived from the constant-product market-making formula, but includes a slip-based fee.  The XYK used in Uniswap uses a flat 30 basis point fee. 

A slip-based fee is better and ensures the final fee paid for is proportional to the demand of liquidity and that market participants consider the time imperative. (impatient trades pay higher fees, whilst patient trades give the market time to absorb any new information that could change market prices)

Cryptodiffer Community

THORChain isn’t built on ethereum and therefore doesn’t have any smart contracts. Thornchain team is building THORNodes using tendermint & cosmosSDK (golang) and using threshold signature scheme cryptography. Could you tell me more about this ?  Where does rune’s profits come from ?

Leena M.
Developer

I am dubious of an general-purpose compute platform for two reasons:

1) A general purpose machine has to do everything, but does any single thing poorly

2) Blockchains are the by-products of the waste necessary for validation. General purpose compute has enormous waste (state growth) so become centralise very quickly, so they stop becoming good blockchains.

I think ETH 2.0 will struggle. Polkadot will likely do *it* better, but we won’t know what *it* should be. CosmosSDK is great for launching application specific blockchains, but $ATOM has poor value-accrual. 

So I think they are all high-risk bets that will end up losing value over time and you should just hold BTC instead, because it does exactly what it should do.

 

Cryptodiffer Community

Where i am can stake Rune?

How to stake & unstake?

Kai Ansaari
Project lead

You can stake $RUNE on www.runevault.org which will continue capped at 1m RUNE for all participants until ChaosNet is launched.

Cryptodiffer Community

What is Aesir Protocol, the Yggdrasil Protocol, and the Bifröst Protocol? What are the features of all 3 and how they differentiate

Josip Zdilar
Marketing manager

Aesir was a fantastic on-chain governance protocol that was meant to be implemented in the later stages of the project. However, the team has since realized that all nodes need to stay anonymous to prevent social signaling and buying of votes, so the Aesir protocol will not be implemented.

Yggdrasil protocol is a novel sharding mechanism unique to THORChain. Unlike legacy sharding applications that reformat databases tables into horizontal rows, Yggdrasil Protocol deploys a vertical sharding technique based on transactions between entire chains that are stored on different nodes. This framework is more effective because it removes the need for a validator to piece together shards and is, in turn, ideal for cross-chain token transactions and trading.

Bifrost protocol enables the creation of fast and secure cross-chain bridges that allow trading of any token pair on the dex.

However, most of these have been utilised in new ways since the project’s inception. Keep a lookout on our new updated whitepapers which will be coming out soon to find out how these protocols tie in together.

Cryptodiffer Community

What do you think is the main feature of Thorchain that will make it standout with other crypto?

Josip Zdilar
Marketing manager

Main two features will be : 

1. Staking any native currency and earning liquidity fees on them

2. Using realiable cross-chain swaps to access deep liquidity at any time on the market

Cryptodiffer Community

Adoption is one of the important factors that all sustainable blockchain projects should focus to be more attractive in the investors’ eyes. What ThorChain has done and plans to do to achieve real world adoption?

Leena M.
Developer

Most people don’t really care about security or decentralisation or can I run a node and verify the sats that I stack, (although you should), what is more a driving factor is incentivisation. 

Will you get paid to do something? 

The answer is yes, with THORChain you will be able to retain custody of your assets and earn a dividend on them. You can think of THORChain as a mechanism that transfers money from the impatient to the patient. So just become a low-time preference sat-stacking meat-eating chad and you will see.

Cryptodiffer Community

Why you use cross-chain bridges rather than atomic swaps? What is the advantage of cross chain Bridges?

Kai Ansaari
Project lead

Atomic swaps require a counterparty & interactivity and require many steps without incentivising liquidity provision. THORChain’s CLP model pays fees to liquidity providers which will create deeply liquid pools for swappers. One-way state pegs mean only main chain assets are utilised, eliminating the risks and challenges associated with pegged assets ie. they are representative, not the real asset and therefore with fungibility concerns the price of the representative asset can deviate from the real asset.

Cryptodiffer Community

What are the main benefits and benefits of RUNE Coins? Why should I or any investor invest in RUNE?

Leena M.
Developer

To be quite honest, $RUNE is worthless without the THORChain network, and THORChain is worthless without $RUNE. Holding Rune is a bet that the team can deliver on the promise of cross-chain liquidity. Cross-chain liquidity is the holy grail. 90% of crypto is just speculation, and RUNE is fueled by liquidity.

Cryptodiffer Community

Why did you decide to make the node operators on THORChain anonymous, is there any negative implications to the project if they known publicly?

Josip Zdilar
Marketing manager

Requiring the nodes to stay anonymous further ensures that the network is safe at all times. Simply put, it minimises the risk of collusion if the node’s are anonymous. Naturally, not all nodes will stay anonymous and some node holders will share that information, however, requiring 67% of nodes to attack the network is much harder if most of the nodes are anonymous.

Cryptodiffer Community

As we know Thorchain is open-source project and many projects are copying Thorchain’s code  how will you prevent these issues? Will this create a hard competition to Thorchain?

I see Thorchain’s runevault gives 52% APR which no other blockchain coin provide how runewallet works? Which method you use to provide 52% Apr?

Kai Ansaari
Project lead

Even if someone cloned and shipped a competing network, the network with the stronger purchasing power will likely absorb the other. THORChain’s distribution is growing, as has the $RUNE’s market cap, and there are 220m Rune (worth $14m) to emit… Thus THORChain would absorb the competing network.

Cryptodiffer Community

As you Mentioned that THORChain facilitates cross-chain liquidity pools with no pegged or wrapped tokens!! So, How Cross-chain Liquidity possible without any Pegged or wrapped tokens ? What’s the Technology  behind this System ?

What are the meaning of BIFRÖST Protocol & Flash Network of Thorchain Also, Can you give details about Bifrost & Flash network that whats the main use of these products ?

Kai Ansaari
Project lead

Let me answer the first part. THORChain has simply pulled together complimentary technology which already exists to create something new. We see this all the time in the real world, for example why wasn’t the palm pilot as successful as handheld devices? It lacked compliments. Utilising cosmos SDK, tendermint and TSS along with the CLP model has allowed the team to create one-way state pegs which simply observe events on external chains and then update state & take action. There’s really no ground breaking innovation, it’s the art of simplicity. All this technology has been built opensource for the community to use, and the THORChain team are doing just that. Pegged assets aren’t needed when you have a way of securing assets by incentives and employing threshold signatures which nodes are party to.

Cryptodiffer Community

As far as I know ThorChain has built private solution which will be a good idea since it can increase security and privacy. However, when u are on Enterprise level, having impact on national economy, i think government wont like the private part, privacy coin delisting on Korea top exchange is an example. – So, to resolve the problem on regulation and law-related, how will ThorChain team solutions be?

Josip Zdilar
Marketing manager

The main idea is to make the network fully decentralised and self-servicing in a couple of years. After that, there will be no way of stoping the network as the team will not be in control of it any way, shape or form. So it will be impossible to force anyone to censor/shutdown the network as nobody will be in charge.

Cryptodiffer Community

How have you been able to survive this longest bear market and continue building and developing because many projects have died out?

Leena M.
Developer

The team are pretty frugal and try not to over-engineer. They also don’t waste money on unnecessary things. You’ll never see THORChain at a crypto conference

Cryptodiffer Community

There is a cancer in cryptocurrencies today which is SECURITY, please how secure is the THORChain proposed DEX, Staking and Swaps?

Explain more about your Continuous Liquidity pool present in every Tokenchain. and what problem does this solve

Leena M.
Developer

You are correct in that security will increasingly become a concern. 

As an example, USDT on Ethereum is one of it’s highest volume and most valuable assets, yet it inherits very little security from Ethereum. The manages of USDT can control and censor USDT transactions if they will it. 

THORChain couples liquidity with security. The value of the network is always 2x the staked value. This ensures the network’s security scales with adoption.

Cryptodiffer Community

1 In your network transactions, which token we have to use as transaction fees ?

2. Is there any upcoming plan for creating a stable coin on your on-chain platform ?

Josip Zdilar
Marketing manager

1. The network fee is just deducted from whatever the asset is sent out, but is currently 1 RUNE

2. There will be a possibility of creating stablecoin’s on the platform or even making stablecoin basket’s as pools. Realisticaly though, most liquid stablecoins will probably be the ones that are already the most popular

Cryptodiffer Community

Technology is changing every second, so are you afraid that recent projects with new technologies will become a serious competitor for Thorchain? What is the thing that Thorchain has that other projects don’t yet have?

Leena M.
Developer

Not really. The team believe that THORChain’s design is terminal, everything else is sub-optimal. Thus all designs will converge to THORChain and THORChain will always be in the lead

Cryptodiffer Community

Do you introduce or have you already introduced a test network? As we know RUNE was created on blockchain binance, why?

Leena M.
Developer

Binance Chain has good characteristics to build on. it is fast and instantly final, plus it has rich memos. Thus it makes it sensible to launch on.

Cryptodiffer Community

What role do you think Thorchain will play in making blockchain highly adaptable in the worldwide stage?

Kai Ansaari
Project lead

THORChain enables permissionless and trustless exchange of crypto assets via nodes which bond RUNE and secure the network, providing the infrastructure to manage assets in vaults secured by threshold signatures. The incentives of the CLP model bring liquidity to the network, which becomes accessible to swappers who can swap with low fees & at fair market prices. Staking is non custodial in the sense that no actor(s) can censor transactions or confiscate assets.

Accordingly THORChain will change the way assets are swapped, from risky centralised exchanges to a decentralised, permissionless network.

Cryptodiffer Community

The future value of the project is always better than the current price of the token, so with modern technology, what contribution has ThorChain made to the community? Do you have any outstanding marketing strategies for next year?

Josip Zdilar
Marketing manager

We strongly believe in user incentivisation as the best form of marketing in crypto. Happy users will be the best marketing tool we can hope for in this closed community, so our focus is on maximum user incentivisation through different methods. The second part is making win-win partnership’s where other platform’s are able to tap into our liquidity and by doing so offer their own users a means to stake their unproductive assets and perform cross-chain swaps.

Cryptodiffer Community

How is Thorchain development going on?  Can you describe in detail about current development efforts, market expansion plans, expected applications & when will they become commercially available?

Josip Zdilar
Marketing manager

You can see the updated roadmap on our webpage and follow @thorchain (hint: read the dev reports 😉 )

Cryptodiffer Community

What’s the secret for the success that you have achieved at Thorchain? Starting by raising low amount of funds towards getting recognized by majority of the crypto world and sky rocket!? 

How does Thorchain generate revenue from it’s technology? Since without revenue, in the long run the project cannot function/or keep going with it’s pace of development

Kai Ansaari
Project lead

You don’t sell Netflix by explaining how the menu works. THORChain doesn’t need to be sold or marketed to anyone. The network only needs to launched and people will use it. There is no secret – find a strong value proposition and build it!

Cryptodiffer Community

What is the Thorchain governance model?

Kai Ansaari
Project lead

The network follows a governance-minimal approach to prevent social-signalling amongst nodes and encourages pseudo-anonymity where possible. There is no supported ability for node operators to coordinate or communicate with each other. Users signal via capital allocation in the network and developers respond to network needs by observing capital allocation and delivering. Nodes run backwards-compatible software.

Cryptodiffer Community

Which programming language thorchain use?

Kai Ansaari
Project lead

Golang, it’s the language Cosmos SDK was built in. Same for Midgard. The front end is react 😉

Cryptodiffer Community

What is Surtyr protocol and how it works and how it is advantageous for  Thorchain ecosystem for longer time

Josip Zdilar
Marketing manager

Surtyr protocol is our token burn protocol. It dictates that any unused reserves that are allocated for the month in question will be burned starting with the new month.

Cryptodiffer Community

What is your background and how did you come to the idea to create your project?

Josip Zdilar
Marketing manager

THORChain was conceptualised at a binance dexathon here in Australia. Almost 2 years later it has legs!

Cryptodiffer Community

Q1.  RuneVault continues limited to 1m RUNE per week?

Q2. How much acceptance has THORChain had in recent months?

Kai Ansaari
Project lead

1. RuneVault continues capped at 1m across all stakers.

2. Distribution has improved significantly, we’ve had a bunch of positive reviews, the latest by Delphi digital and we’re slowly winning over the ETH DeFi community; who are generally difficult to persuade 

Good to see you in another AMA.

Cryptodiffer Community

As we know, every successful project has a few stories behind the scenes, what’s the story behind #rune success? What was that vision when rune  first emerged as an idea? Are there any special prototypes or upcoming rune updates that you want to show/share with us?

Josip Zdilar
Marketing manager

TBH it has been incredibly adventureous for the last 6 months since we started with our IDO preparations. There has been unforseen obstacles and amazing progress to tackle those obstacles head on, and in my opinion, the whole team experience has grown immensly in these last 6 months. Seriously, last 6 months have been like Neo plugging into the matrix!

Kai Ansaari
Project lead

Thank you for having us, and thank you to all those who asked questions. We’d love to see you in our telegram @thorchain_org.

Josip Zdilar
Marketing manager

Thx everyone for the questions, was great to be here! Awesome community and the questions were great!

Cryptodiffer TEAM

Awesome:) Thank you guys for your time! Pleasure to have you in our chat!

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