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THORChain ⚡️(ᚱ) Profile picture
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9 Nov, 11 tweets, 3 min read
THORChain is not built to skirt rules, it's built to operate in a way that the rules are no longer applicable.

A centralised exchange has to follow KYC/AML because they hold user funds and have a legal relationship with their users.

Instead, THORChain is a protocol. /n
If you hold a Bitcoin UTXO that you can spend, you sign a tx and broadcast it. Individual Bitcoin miners can choose to not to process it, but they cannot stop it being eventually processed.

Bitcoin users do not have a relationship with miners, and miners don't hold funds.
If you sign a tx spending Bitcoin into THORChain, it will get processed by miners, then witnessed by THORNodes into the state machine. Any THORNode can choose not to witness it, but they will get unavoidably slashed.

So it will eventually end up in the state machine.
When it enters the state machine, THORChain will process a new block and generate a txOut. Any THORNode can choose to not process that block, but they will get skipped.

So the txOut will end up being generated.
If the txOut is delegated to a Yggdrasil vault, the THORNode can choose not to send it, but 300 blocks later they will get slashed, and the txOut sent back to Asgard.

So the txOut will get prioritised.
Asgard forces 67% of the nodes to process it. A THORNode can choose to not join, but they will get slashed.

So the txOut will get finalised and broadcasted back to Bitcoin.
If any THORNode does not like anything that happened above, or they don't like sending txOuts, or they are under pressure from local regs, they can leave at any time.

So it's not possible to censor or block any swaps on THORChain.
Thus THORChain operates similarly to Bitcoin or Ethereum.

THORChain is an unstoppable protocol that continually processes anything that is transacted on vaults that it is concerned about.
KYC/AML does not apply to Bitcoin miners, instead it applies to the centralised services that transact on Bitcoin with users, such as Coinbase.

Thus KYC/AML does not apply to THORChain, instead it applies to any centralised service that operates on THORChain.
Indeed even open-source wallets that hold ASGARDEX keystores also are not applicable, since a non-custodial wallet is not a centralised service.

fincen.gov/sites/default/…
Thus THORChain, and any non-custodial wallets that interact with THORChain operate outside the rules. The rules simply don't apply because of how THORChain operates.

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More from @thorchain_org

THORChain ⚡️(ᚱ) Profile picture
9 Nov
Legacy markets are centralised against a custodial hub, so speed counts to favour those who can scalp the fastest.

However this is irrelevant to a global decentralised market.

Thread on why pursuing speed/latency is a fool's errand for a DEX.

/n
An asset's price is simply net buyers meeting net sellers, and the balance of the two depends purely on information about that asset.

If new information about an asset is found, then the price will change in response to that information.
How fast the price changes depends purely on how fast information about that asset can propagate across the market participants.

The "real" price of an asset does not change every 5ms. For a 24/7 global market with no centralised hub, price changes should be much slower.
Read 13 tweets
THORChain ⚡️(ᚱ) Profile picture
10 Aug
Why is THORChain called THORChain?

* Because the team recognised early that memetic growth of the network is an important driver to gaining widespread adoption. *

Simply, because it's a meme.

/thread
Decentralised crypto money networks are held together by the people who make it.

The more they can identify with each other, share their ideas, spread their memes, the stronger the network is.

Norse mythology is as old as time itself, arguably one of the strongest memes ever
Norse Mythology likely descends from the Old Testament (Book of Genesis) containing similar ideas (even a version of Adam & Eve - Aska & Embla, with similar fates).

It's a rich brand, woven in and out of culture for thousands of years, including recent comics and movies.
Read 8 tweets
THORChain ⚡️(ᚱ) Profile picture
3 Aug
Many new projects claiming "cross-chain".

To cut thru the noise, ask these questions:

1) Are the assets wrapped or pegged?

If they are wrapped/pegged, the project is out-sourcing security to another protocol.

THORChain secures native assets.
2) Is the security model scalable?

If the security model is "proof of stake" but does not couple the security of vaulted assets with their value, then the protocol can become unsafe.

THORChain uses an Incentive Pendulum - which is scalable and autonomous.
3) Does the protocol use Atomic Swaps?

Atomic Swaps are a deal-breaker for incentivised liquidity pools, since Atomic Swaps cannot be pooled or incentivised, and is vulnerable to the "American Call Option"

THORChain uses always-on pooled liquidity.
Read 9 tweets
THORChain ⚡️(ᚱ) Profile picture
29 Jun
Ethereum Testnet Update

Latest update using a method suggested by @0xEther

Thread on how it works.

rinkeby.etherscan.io/address/0x1069…
Step 1)

Call `deposit()` with 0.1 ETH, and memo:

SWAP:ETH.TKN-0x6D052e01B0C60d8c1aBB6C936651f9bf55633CD4:0x<yourAddress>

Remember - you are trying to pass transaction intent through to THORChain.
The contract will receive the deposit and emit an event once confirmed on-chain.

This only happens once it is confirmed. Every THORNode is hooked to an Ethereum node and will receive the event logs.
Read 10 tweets
THORChain ⚡️(ᚱ) Profile picture
14 Jun
THORChain's Bifröst protocol today is a substantial different design from the original concept and other bridges.

The Bifröst does not seek to prove an event observed and reported actually did occur via validation.

Instead THORChain only seeks "observation consensus"
Nodes are connected to a plurality of chains. Everytime they see a transaction concerning a THORChain vault, the bundle up their observation into a witness transaction.

A client sits between each chain-node and the Observer, which abstracts away chain nuances
The witness transaction object looks like the following, where, no matter the originating chain, all witness transactions are the same.
Read 10 tweets
THORChain ⚡️(ᚱ) Profile picture
14 Jun
If ASGARDEX was built 10 years ago, then it would have prevented 10 years of hacks, insolvency and scams.

But the tech is only just ready:

* Distributed state machine (@cosmos)
* Leaderless TSS (@sgoldfed)
* AMM protocols (@UniswapProtocol)

/thread
State Machine work stated with @jaekwon in 2014 with @tendermint_team, original driving motivator in fact to build a decentralised exchange.

Cosmos hub launched in 2018, @Binance_DEX in 2019.

The tech is mostly complete, some necessary upgrades include better upgrading, IBC
TSS paper (GG18) unveiled in 2018 by Gennaro & Goldfeder. Significant because it was the first scalable ECDSA TSS with no trusted dealer.

@ZenGo implemented in Rust, Binance implemented in Go in 2019.

A faster, more scalable version this year. (GG20)

eprint.iacr.org/2019/114.pdf
Read 10 tweets

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