Q/T for thread.
THORChain is simply a distributed exchange secured by a network of bonded nodes using liquidity pools as the method of exchange.
(cont)
THORChain is simply a distributed exchange secured by a network of bonded nodes using liquidity pools as the method of exchange.
(cont)
Take a centralised exchange today.
(1) You deposit an asset (BTC), and it is credited to your account
(2) You exchange it for another (USDT) via an orderbook
(3) You redeem it for on-chain USDT and send to your account.
(1) You deposit an asset (BTC), and it is credited to your account
(2) You exchange it for another (USDT) via an orderbook
(3) You redeem it for on-chain USDT and send to your account.
THORChain does (1-3) all at once.
You send in the BTC, stating to the system you wish to exchange for USDT and provide your USDT address.
The system observes your deposit, and calculates USDT owed using the CLP formula.
It then immediately remits the USDT to you.
You send in the BTC, stating to the system you wish to exchange for USDT and provide your USDT address.
The system observes your deposit, and calculates USDT owed using the CLP formula.
It then immediately remits the USDT to you.
Liquidity Pools solve the method of exchange:
* It is always-available with no counter-parties
* Prices are always deterministic
* Fees can be retained for liquidity providers
* Pools can be linked allowing any-any exchange
* It is always-available with no counter-parties
* Prices are always deterministic
* Fees can be retained for liquidity providers
* Pools can be linked allowing any-any exchange
THORChain solves distributed asset security by coupling the value of staked capital with the bonded capital.
An incentive pendulum always ensures there is twice as much bonded capital as staked capital - which means nodes can never steal (assuming profit-seeking actors)
An incentive pendulum always ensures there is twice as much bonded capital as staked capital - which means nodes can never steal (assuming profit-seeking actors)
Incentivised nodes are always available and thus can participate in multi-party-computation.
THORChain uses TSS MPC:
* Plausible deniability for all participants
* Indistinguishable from normal addresses
* Byzantine fault tolerant
* No trusted dealer (unlike SSS)
THORChain uses TSS MPC:
* Plausible deniability for all participants
* Indistinguishable from normal addresses
* Byzantine fault tolerant
* No trusted dealer (unlike SSS)
THORChain is an always-on distributed exchange that is able to underwrite all staked capital and is byzantine fault tolerant.
