1/50 π§΅
@THORChain is slowly resuming operation after the sobering hacks 2 months ago and the hardening that followed. This thread is about my thesis for the protocol and what it means to me. Not financial advice. No rocket emojis & price targets here. #DYOR
@THORChain is slowly resuming operation after the sobering hacks 2 months ago and the hardening that followed. This thread is about my thesis for the protocol and what it means to me. Not financial advice. No rocket emojis & price targets here. #DYOR
2/50
I initially ignored TC (THORChain) back in February because it sounded a bit goofy. The web page I landed on looked like an infomercial. Everything changed after I read @multicoincap's analysis in May: assets.ctfassets.net/qtbqvna1l0yq/5β¦
I initially ignored TC (THORChain) back in February because it sounded a bit goofy. The web page I landed on looked like an infomercial. Everything changed after I read @multicoincap's analysis in May: assets.ctfassets.net/qtbqvna1l0yq/5β¦
3/50
I understood the deterministic price floor of $RUNE and the size of the total addressable market (TAM) for a cross-chain DEX and what followed was a 4-month obsession. There are only 3 whitepapers that I've read more than once: #Bitcoin, #Ethereum, and @THORChain
I understood the deterministic price floor of $RUNE and the size of the total addressable market (TAM) for a cross-chain DEX and what followed was a 4-month obsession. There are only 3 whitepapers that I've read more than once: #Bitcoin, #Ethereum, and @THORChain
4/50
I'm a former Eth 2.0 client engineer - it took me more than I'd like to admit to understand how AMMs work when I encountered them initially and these past couple of months have been an intense crash course in all things DeFi and a pinch of history of the FED.
I'm a former Eth 2.0 client engineer - it took me more than I'd like to admit to understand how AMMs work when I encountered them initially and these past couple of months have been an intense crash course in all things DeFi and a pinch of history of the FED.
5/50
The future is multi-chain for a couple of reasons. Just like physics, computer science and information theory have fundamental limitations - that is why for different kinds of applications we need specialized blockchains with different tradeoffs.
The future is multi-chain for a couple of reasons. Just like physics, computer science and information theory have fundamental limitations - that is why for different kinds of applications we need specialized blockchains with different tradeoffs.
6/50
The Cambrian explosion in different sectors (smart contracts, storage, NFTs, etc.) is inevitable in these early stages and it might take decades for all the dust to settle for the true winners to emerge in power-law distributions.
The Cambrian explosion in different sectors (smart contracts, storage, NFTs, etc.) is inevitable in these early stages and it might take decades for all the dust to settle for the true winners to emerge in power-law distributions.
7/50
Competing chains actually help as temporary sharding & horizontal scaling solutions for the young industry. Capital is sticky - even the chains that will eventually die will be around for a long time and some will survive purely thanks to the sheer will of their communities.
Competing chains actually help as temporary sharding & horizontal scaling solutions for the young industry. Capital is sticky - even the chains that will eventually die will be around for a long time and some will survive purely thanks to the sheer will of their communities.
8/50
Transacting is to currencies what exchange is to assets & trade - they are just as fundamental and most of the time the two go hand in hand:
Transacting is to currencies what exchange is to assets & trade - they are just as fundamental and most of the time the two go hand in hand:
https://twitter.com/kankanivishal/status/1433095431395987456
9/50
Web 3.0 needs a permissionless DEX between the puzzle pieces of the stack - here's a great read detailing all the aspects & tradeoffs for cross-chain bridges: medium.com/1kxnetwork/bloβ¦
Web 3.0 needs a permissionless DEX between the puzzle pieces of the stack - here's a great read detailing all the aspects & tradeoffs for cross-chain bridges: medium.com/1kxnetwork/bloβ¦
10/50
@THORChainβs design is a holistic approach to systems and incentives - try to break it and think of a NON-MARGINAL architectural improvement that's technically possible today. It's no BTC/ETH in terms of decentralization but it sure beats "a few dudes with a multisig".
@THORChainβs design is a holistic approach to systems and incentives - try to break it and think of a NON-MARGINAL architectural improvement that's technically possible today. It's no BTC/ETH in terms of decentralization but it sure beats "a few dudes with a multisig".
11/50
It offers verifiable solvency for cross-chain liquidity with the best crypto-economic security budget when solving this custodial problem in a generalized way. There is no delegation to nodes because capital ought to have a cost.
It offers verifiable solvency for cross-chain liquidity with the best crypto-economic security budget when solving this custodial problem in a generalized way. There is no delegation to nodes because capital ought to have a cost.
12/50
This liquidity will facilitate more than just an AMM: vertically integrated DeFi - aggregating the most consequential & applicable aspects of the so-called money legos.
This liquidity will facilitate more than just an AMM: vertically integrated DeFi - aggregating the most consequential & applicable aspects of the so-called money legos.
13/50
#ThorFi will bring borrowing & lending, self-repaying loans & more even to non-productive assets with the least counter-party risk - including wrapped tokens through fully collateralized synths.
#ThorFi will bring borrowing & lending, self-repaying loans & more even to non-productive assets with the least counter-party risk - including wrapped tokens through fully collateralized synths.
14/50
Capital flow between chains will be simpler than ever - currently, wrapping incurs too many steps & trust assumptions and atomic swaps cannot provide fair markets & adequate liquidity. Look for liquidity flywheels and understand that the deepest pools always set the prices.
Capital flow between chains will be simpler than ever - currently, wrapping incurs too many steps & trust assumptions and atomic swaps cannot provide fair markets & adequate liquidity. Look for liquidity flywheels and understand that the deepest pools always set the prices.
15/50
The volatility that's been plaguing crypto is bound to decrease because of this and I couldn't be more excited about @THORChain being one of the best places to park capital due to the synergy between its fee structure, CLP model, transparency, security & incentives.
The volatility that's been plaguing crypto is bound to decrease because of this and I couldn't be more excited about @THORChain being one of the best places to park capital due to the synergy between its fee structure, CLP model, transparency, security & incentives.
16/50
The only participants are LPs, Arbs, Swappers & NOs and there aren't thousands of people required to run it (just a handful) - no centralized company can compete with that. No men with guns are required to enforce the rules.
The only participants are LPs, Arbs, Swappers & NOs and there aren't thousands of people required to run it (just a handful) - no centralized company can compete with that. No men with guns are required to enforce the rules.
17/50
Building such a service inside-out in public is an embodiment of crypto's ideology and the level of ambition, complexity & importance of the protocol is breathtaking. The name of this game is trust minimization. Owning $RUNE is owning liquidity security.
Building such a service inside-out in public is an embodiment of crypto's ideology and the level of ambition, complexity & importance of the protocol is breathtaking. The name of this game is trust minimization. Owning $RUNE is owning liquidity security.
18/50
Most people won't even know they are using it - either from their own wallets or for big orders on centralized exchanges that would tap into this liquidity. Cross-chain savings account with single asset exposure? You've got it.
Most people won't even know they are using it - either from their own wallets or for big orders on centralized exchanges that would tap into this liquidity. Cross-chain savings account with single asset exposure? You've got it.
19/50
Once you grasp TC's potential the only question that remains is what the odds it failing are, and that isn't straightforward for most to answer - roughly quantifying the risk is hard, but not impossible. The bar is higher for other financial & computer science innovations.
Once you grasp TC's potential the only question that remains is what the odds it failing are, and that isn't straightforward for most to answer - roughly quantifying the risk is hard, but not impossible. The bar is higher for other financial & computer science innovations.
20/50
Let's say that you think the chance TC could fail is not 5, 10, but 20% (I'm not saying it's that much). But what's the upside? "$RUNE has already gone up 400x"... But it was launched in a bear market with little hype and it made a lot of people wealthy - community matters.
Let's say that you think the chance TC could fail is not 5, 10, but 20% (I'm not saying it's that much). But what's the upside? "$RUNE has already gone up 400x"... But it was launched in a bear market with little hype and it made a lot of people wealthy - community matters.
21/50
If it launched today it would start with a billion $ MC right from the get-go. What is the TOTAL ADDRESSABLE MARKET & POTENTIAL even if all of crypto stays at 2 trillion $ MC? Smart money does its research, looks for PMF, evaluates the risks, and places bets accordingly.
If it launched today it would start with a billion $ MC right from the get-go. What is the TOTAL ADDRESSABLE MARKET & POTENTIAL even if all of crypto stays at 2 trillion $ MC? Smart money does its research, looks for PMF, evaluates the risks, and places bets accordingly.
22/50
I'm glad that the hacks happened despite the pain because the measures taken are the way to go and should have been there in the first place. The protocol is in a better position than ever despite the delays and is slowly resuming operation - one chain at a time.
I'm glad that the hacks happened despite the pain because the measures taken are the way to go and should have been there in the first place. The protocol is in a better position than ever despite the delays and is slowly resuming operation - one chain at a time.
23/50
Mainnet by EOY - liquidity has actually been capped until now precisely in case of hacks early on and the floodgates were opening briefly every week or so (yes, the protocol hasn't actually launched officially yet).
Mainnet by EOY - liquidity has actually been capped until now precisely in case of hacks early on and the floodgates were opening briefly every week or so (yes, the protocol hasn't actually launched officially yet).
24/50
TC's ecosystem is not a collection of peer-reviewed logos but of actual builders and products - usually, only L1s have ecosystems and not DEX-es, but TC is a different beast.
TC's ecosystem is not a collection of peer-reviewed logos but of actual builders and products - usually, only L1s have ecosystems and not DEX-es, but TC is a different beast.
25/50
Think of the last 2-3 months of the TC "bear market" like the 2018/2019 crypto bear market - building never stopped and the fruits of this labor are about to shine. $RUNE is not a meme - it's a leaderless crypto maxi cult and there's a good reason for that.
Think of the last 2-3 months of the TC "bear market" like the 2018/2019 crypto bear market - building never stopped and the fruits of this labor are about to shine. $RUNE is not a meme - it's a leaderless crypto maxi cult and there's a good reason for that.
26/50
TC can be understood by financial outsiders in a couple of days/weeks (no free lunch, sorry) and reasoning by analogy will reveal the TAM. Have you done the research? Here are a few good links:
TC can be understood by financial outsiders in a couple of days/weeks (no free lunch, sorry) and reasoning by analogy will reveal the TAM. Have you done the research? Here are a few good links:
27/50
- What @ErikVoorhees (crypto OG) had to say about TC: erikvoorhees.medium.com/an-introductioβ¦
- A recent one by @greymattercap (very good): greymattercapital.substack.com/p/thorchain-anβ¦
- And an older one by @Delphi_Digital: cdn.delphidigital.io/uploads/2020/0β¦
- What @ErikVoorhees (crypto OG) had to say about TC: erikvoorhees.medium.com/an-introductioβ¦
- A recent one by @greymattercap (very good): greymattercapital.substack.com/p/thorchain-anβ¦
- And an older one by @Delphi_Digital: cdn.delphidigital.io/uploads/2020/0β¦
28/50
I love it when someone mentions that $RUNE is capital inefficient and that the token isn't necessary - but they haven't looked into the crypto-economic side of it. Coinbase is a public company with a 65$ billion MC. I had no way to participate as a shareholder.
I love it when someone mentions that $RUNE is capital inefficient and that the token isn't necessary - but they haven't looked into the crypto-economic side of it. Coinbase is a public company with a 65$ billion MC. I had no way to participate as a shareholder.
29/50
I couldn't participate in BlockFi. Nor Kraken or any such company using traditional capital formation rails. How do you value alignment with crypto's ideals? How do you think about custodial risk or permissionless finance?
I couldn't participate in BlockFi. Nor Kraken or any such company using traditional capital formation rails. How do you value alignment with crypto's ideals? How do you think about custodial risk or permissionless finance?
30/50
What excites you in this space? How does $RUNE stack up to such companies? Have you read "The Purpose and Value of Cryptocurrency and Tokens" or have you just been chasing pumps & drawing lines & triangles on charts?
smartcontentpublication.medium.com/the-purpose-anβ¦
What excites you in this space? How does $RUNE stack up to such companies? Have you read "The Purpose and Value of Cryptocurrency and Tokens" or have you just been chasing pumps & drawing lines & triangles on charts?
smartcontentpublication.medium.com/the-purpose-anβ¦
31/50
There's plenty of misguided criticism of TC. Some cynics even accuse the team of the hacks - that makes me question humanityβs ability to reason - just think of the team's token allocation and the reputational damage of such hacks & what delaying the time to market means.
There's plenty of misguided criticism of TC. Some cynics even accuse the team of the hacks - that makes me question humanityβs ability to reason - just think of the team's token allocation and the reputational damage of such hacks & what delaying the time to market means.
33/50
Let me tell you what financial inclusion means to me. It's usually portrayed as banking the unbanked & ending monetary colonialism and that is indeed a huge part of it:
Kudos to @nayibbukele
Let me tell you what financial inclusion means to me. It's usually portrayed as banking the unbanked & ending monetary colonialism and that is indeed a huge part of it:
Kudos to @nayibbukele
34/50
However, there's another angle to it which I'd like to show through a personal story. I'm a huge fan of Buffett's 20 slot rule: jamesclear.com/buffett-slots
I've had 3 cases in my life where I've seen extremely asymmetrical risk/reward & high conviction bets.
However, there's another angle to it which I'd like to show through a personal story. I'm a huge fan of Buffett's 20 slot rule: jamesclear.com/buffett-slots
I've had 3 cases in my life where I've seen extremely asymmetrical risk/reward & high conviction bets.
35/50
The third one is discovering @THORChain in 2021. The previous case was 18 months ago when I dived deep into Tesla as a company and Elon as a CEO. The first bet was 3 years ago when I found a Silicon Valley startup.
The third one is discovering @THORChain in 2021. The previous case was 18 months ago when I dived deep into Tesla as a company and Elon as a CEO. The first bet was 3 years ago when I found a Silicon Valley startup.
36/50
I was in a unique position to recognize their unicorn potential even before their first seed round - I could be the 5th person to join. I spent 4 months preparing for an interview 2-3 hours a day after work and when it finally happened and I went through all the stages.
I was in a unique position to recognize their unicorn potential even before their first seed round - I could be the 5th person to join. I spent 4 months preparing for an interview 2-3 hours a day after work and when it finally happened and I went through all the stages.
37/50
However, they cut me off with 0 feedback and without even reviewing my home assignment. Their current valuation is about 100$ million - still in the early stages. Checking their Crunchbase profile feels like stalking an ex-girlfriend that dumped you.
However, they cut me off with 0 feedback and without even reviewing my home assignment. Their current valuation is about 100$ million - still in the early stages. Checking their Crunchbase profile feels like stalking an ex-girlfriend that dumped you.
38/50
Today I'd still make the rational choice to allocate 10% of my net worth to it expecting 10x (+) within 5 years. But I can't. Accreditation, connections, high barrier to entry - the private capital markets are extremely exclusionary and are exacerbating wealth inequality.
Today I'd still make the rational choice to allocate 10% of my net worth to it expecting 10x (+) within 5 years. But I can't. Accreditation, connections, high barrier to entry - the private capital markets are extremely exclusionary and are exacerbating wealth inequality.
39/50
Contrast this to $RUNE - a token that's been out in the open from the start, available for anyone. And the technology itself enables the expansion of human freedom & connecting other financially inclusive technologies. Build bridges - not walls.
Contrast this to $RUNE - a token that's been out in the open from the start, available for anyone. And the technology itself enables the expansion of human freedom & connecting other financially inclusive technologies. Build bridges - not walls.
40/50
Plenty of talented & capable people are eager to take seemingly crazy risks in the pursuit of optimizing the world through market forces and being rewarded for that - not everything is 0-sum Wall Street-ish short-term trading.
Plenty of talented & capable people are eager to take seemingly crazy risks in the pursuit of optimizing the world through market forces and being rewarded for that - not everything is 0-sum Wall Street-ish short-term trading.
41/50
Money is an information system and financial inclusion allows for shadowy super-allocators to pair up with super-builders. Crypto has enormous potential to improve wealth inequality by leveling the playing field on a global scale unlike anything before in history.
Money is an information system and financial inclusion allows for shadowy super-allocators to pair up with super-builders. Crypto has enormous potential to improve wealth inequality by leveling the playing field on a global scale unlike anything before in history.
42/50
Cleptocracy, regulatory capture, imperialism, oppression, information asymmetry, propaganda, theft. The status quo is depressing AF. Do you think competence & goodwill are running the world? Without crypto, I'd argue it would be undisruptable. Don't you want a better world?
Cleptocracy, regulatory capture, imperialism, oppression, information asymmetry, propaganda, theft. The status quo is depressing AF. Do you think competence & goodwill are running the world? Without crypto, I'd argue it would be undisruptable. Don't you want a better world?
43/50
I want smart people analyzing on-chain data that's accessible for anyone to use - not meetings behind closed doors, lobbying, repressive regulation, and crony capitalism. New independent capital is needed. Competition scares those that are used to rigging the system.
I want smart people analyzing on-chain data that's accessible for anyone to use - not meetings behind closed doors, lobbying, repressive regulation, and crony capitalism. New independent capital is needed. Competition scares those that are used to rigging the system.
44/50
Listen to the latest episode of the @theallinpod to get a feeling of what's in the heads of VCs and where we're at in terms of funding what's most necessary:
They also put DeFi into perspective briefly in the second half.
Listen to the latest episode of the @theallinpod to get a feeling of what's in the heads of VCs and where we're at in terms of funding what's most necessary:
They also put DeFi into perspective briefly in the second half.
45/50
Currently, my entire net worth is split like this: 50% $TSLA (with x1.3 leverage, avg entry 305$), 40% $RUNE (0 leverage, avg entry 10.4$ after rotating out of $ETH), and the rest is $ETH, $FUV and cash for living expenses for a couple of months.
Currently, my entire net worth is split like this: 50% $TSLA (with x1.3 leverage, avg entry 305$), 40% $RUNE (0 leverage, avg entry 10.4$ after rotating out of $ETH), and the rest is $ETH, $FUV and cash for living expenses for a couple of months.
46/50
My bags are small - I started from scratch 3 years ago (after a financially misguided development of a game engine in 2016) - I would definitely not recommend this allocation for everyone as I have a big risk tolerance and am aggressively trying to "make it" - #NFA.
My bags are small - I started from scratch 3 years ago (after a financially misguided development of a game engine in 2016) - I would definitely not recommend this allocation for everyone as I have a big risk tolerance and am aggressively trying to "make it" - #NFA.
47/50
However, I'm actually quite conservative and don't have the nerve to hold something I don't fully understand - hope is not a strategy. I don't trade despite the constant FOMO and I will diversify more with each 0 that I add.
However, I'm actually quite conservative and don't have the nerve to hold something I don't fully understand - hope is not a strategy. I don't trade despite the constant FOMO and I will diversify more with each 0 that I add.
48/50
$RUNE is my current bet in climbing faster on Maslow's hierarchy of needs and I take full responsibility for any errors & risks. But the opportunity is there and am putting my money where my mouth is.
$RUNE is my current bet in climbing faster on Maslow's hierarchy of needs and I take full responsibility for any errors & risks. But the opportunity is there and am putting my money where my mouth is.
https://twitter.com/HighCoinviction/status/1438126222387580929
49/50
The important thing about high conviction moonshots is that even if thereβs an 80-90% drop at some point if the thesis is correct youβd still be way ahead in the end. See you at the peak of the power-law distribution for cross-chain DEXes. Not financial advice #DYOR
The important thing about high conviction moonshots is that even if thereβs an 80-90% drop at some point if the thesis is correct youβd still be way ahead in the end. See you at the peak of the power-law distribution for cross-chain DEXes. Not financial advice #DYOR
So what does @THORChain and crypto mean to you, anon?
ππππππππππππππππππππππππππππππππππππππππππ
Our CEO is #BULLISH
ππππππππππππππππππππππππππππππππππππππππππ
Our CEO is #BULLISH
Go through every tweet from @THORmaximalist and @THORChain since the start of 2021 for more context.
β’ β’ β’
Missing some Tweet in this thread? You can try to
force a refresh
γ
