Thread by @Curious__J

0/ There is one project in the entire crypto space that's a paradigm shift in the making involving cross chain defi and that is @THORChain. $Rune is one of the most fundamentally bullish altcoins of 2023. Let's expand on my thesis......🧵

1/ 2022 was full of bridge exploits, implosions and centralized exchanges collapsing due to lack of trust. To combat these issues, there is an on-chain version that lets you swap and earn yield off your NATIVE coins within your wallet without any bridge risks? That is Thorchain.

2/ What is it?
Thorchain is a liquidity protocol designed to essentially link all native blockchain assets in a decentralized market through its cross-chain bridge and ongoing liquidity pools that are rewarded and protected by validators using $rune token.

3/ Quite simply it's a blockchain that allows you to exchange any other native cryptocurrency for another. Consider it a decentralized version of coinbase, kucoin, etc.; however, instead of requiring you to create an account and provide your ID, it links to your wallet. @THORSwap

4/ Thorchain is built on Tendermint, which also powers chains like Juno, Osmosis, Secret Network, Cosmos hub, and Terra.
This means that it's essentially a Cosmos appchain built on the premise of crosschain transfers, which can enable #IBC if they wanted to.

5/ Why is swapping native assets so important?
Currently the only other way to swap native assets is through a CENTRALIZED exchange. This means KYC and relying on trusting these exchanges. After the fall of FTX trust in CEXs is almost nonexistent.

6/ Now some of you guys may be thinking ok but you can just get wBTC on uniswap or sushiswap utilizing Ethereum, polygon, or even ren protocol with BTC bridge. Here's the issue with this: wrapped Bitcoin for example is a CENTRALIZED bitcoin that's run by BITGO.

7/ BITGO is a company that if they chose to close down or government seizes their assets then you can say bye bye to that $wBTC. This goes for any wrapped token as they are created/managed by CENTRALIZED custodians.

8/ If you're buying a wrapped asset you don't actually own the asset yourself, synthetic assets have additional risks. Yes there are novel protocols that are developing decentralized wrapped BTC like @nomicbtc and @InterlayHQ but that's not the native asset at the end of the day.

9/ P.S. I'm personally on bullish these as well, because they have their place in this defi market too. More familiar with nomic but decentralized wrapped assets are still better than centralized ones if they're implemented safely.

10/ How does it work?
Thorchain was created to be interoperable, and blockchain agnostic, meaning it can connect with theoretically everything. The protocol that does this is Bifrost Protocol which is the glue that holds the entire THORChain ecosystem together.

11/ Bifrost works by having a set of 100 staked validators. These staked validators govern the multisig accounts on Thorchain to create vaults. When a native coin is moved to that vault it becomes the responsibility of one of these validators to sign the transaction.

12/ Once they do so a new equal version of the external token is created on Thorchain and whenever someone wants to withdraw their staked coins, the external coin is unlocked by burning the Thorchain equivalent coin.

13/ Bifrost enables the seamless trading of any digital asset across any distributed ledger. This method makes bridging between chains far safer and it gives far greater liquidity than the current implementation of atomic swaps.

14/ But how can we trust these validators?
Well to become a thorchain validator, you need 1 million RUNE bonded. That's over $1.4mil USD today. For every $1 of non-RUNE assets on the network, the network incentivizes $3 of RUNE to be locked which means they have more to los5

15/ This also has a positive effect on tokenomics, market cap, and price potential, check out this thread on $rune tokenomics for a better understanding

https://twitter.com/jake_pahor/status/1608478781727023104?s=20&t=owsjQiyhpv63tTIAtYQZ4w

16/ 2022 was full build mode and thorchain launched several updates:

-Mainnet upgrade
-Terra addition then removal
-Cosmos hub Gaia integration
-Avalanche integration
-Thorswap dex aggregator
-Synthetics
-Savers Vaults
-Trust wallet integration & Edge wallet integration

17/ Mainnet upgrade began the elimination of non native rune, along with this, upgrades to features such as synthetic assets and savers vaults rolled out which I'll talk about them a little later. Mainnet upgrade will also bring some new features rolled alongside it such as...

18/ ...
a. Yggdrasil: sharding solution
b. Aesir: Thorchain governance, allows RUNE to be staked by normies to vote.
c. Flash Network: L2 built on thorchain for fast cross network exchange (maybe this is how @asgardex will be free of fees?)

19/ Thorchain integrating with Terra was a huge milestone at first and drove significant volume thus raising TVL, however it was short lived and as Terra crashed Thorchain was eventually forced to remove Terra altogether.

20/ Later on they onboarded Cosmos hub, this was much needed as it felt like the first time Thorchain returned to its roots by integrating with Cosmos, (if only they enabled #IBC but I digress)
Trading $atom for native $btc is still an underrrated feature.

21/ $avax was the third main chain to be integrated on thorchain and this brought Native asset trading for many avalanche tokens traded on prominent dexes such as @traderjoe_xyz & @pangolindex

22/ Thorchain dex aggregator was a much needed feature that allowed users to be able to swap any ERC20 <> $BTC, $ATOM, $LTC, $BNB, $DOGE etc. using their decentralized wallets.

23/ Thorchain synthetics opened the door for thorchain to flex it's capital efficiency muscles by having synthetic assets of native protocols such as BTC, ETH, and even RUNE itself, introducing lower fees and higher yield.

https://twitter.com/CBarraford/status/1501620810003656706?s=20&t=GQqHLZL7ZXh-yRDcLpOjAQ

24/ Savers vaults was a recent hit success on Thorchain, with the protocol gaining > $11mil TVL within a few short weeks. app.thoryield.com/savers

25/ Savers vaults allows us to deposit native assets such as $BTC in a single pool without pairing and running impermanent loss risks while also gaining yield, all thanks to synthetics. More on how it works.

https://twitter.com/familiarcow/status/1586032272825688066?s=20&t=xd_INmT5fYIYVsv9eP_JWQ

26/ Savers Vaults allow for adoption of mass retail to earn yield off their BTC, incentivizes longer term and stickier liquidity onto thorchain as it's best to plan to hold for at least 2 months to benefit from the yield. Now if only there was a wallet with a large userbase...

27/ Enter @TrustwaIIset & @Ledger which both integrated with @THORChain to power native crosschain swaps. Soon savers vaults will be available to over 9 million individuals accessing thorchain through these wallets.

28/ What's next for thorchain?

-more chains to be integrated
-liquidation free borrow/lending
-orderbook matching, limit orders
-more wallets using thorchain on backend to power native swaps
-more scalability
-more front end protocols with simplistic UX to onboard masses

Thorchain embodies real defi without the risk of centralized parties. It feels like true innovation and solves a problem to the current era of bridges. $rune has a lot of fundamental tailwind ahead.

https://twitter.com/Curious__J/status/1611214142592925698?s=20&t=xd_INmT5fYIYVsv9eP_JWQ

To learn more about synthetics, savers vaults, and thorfi, highly recommend watching this. Great interview with @CBarraford by @ContrarianDude

https://twitter.com/ContrarianDude/status/1602720579664101377?s=20&t=kPJp36MPPS4BPm0eCd8ZXQ

Follow these thorchads for more $rune alpha:
@ErikVoorhees
@CBarraford
@familiarcow
@ChadThoreau
@TheRuneRanger
@Bull_Sander
@THORmaximalist
@Pluto9r

For Cosmos chads:
@CryptoChem0000
@Thyborg_
@flowslikeosmo
@cosmodiver
@airdrops_one
@CCosmonaut_
@CosmosClub_
@imperator_co
@CryptoStreamHub
@N1C0_B_
@cosmoscoffeeDFI
@CryptoRy_
@Cephii1
....and many more

Defi chads:
@sooper__
@TheDeFinvestor
@jediblocmates
@blocmatesdotcom
@byChadManDan
@BMGarber
@PendulumFlow
@ReveloIntel
@crypthoem
@rektdiomedes
@BarryFried1
@Dynamo_Patrick

If you enjoyed this please like, reshare and follow thorchads that have made amazing threads before me.

https://twitter.com/curious__j/status/1613120880758099980

Any mistakes feel free to point them out for future ones. And anything worth mentioning like elaborating on thorfi and mentioning previous hacks (which I left out on purpose but should’ve included it)