Thorchain: Creating Trustless Bitcoin Swaps in a World of Economic Turmoil and Banks Dying

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avatar of @khaleelkazi
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2 months ago - 4 minutes read


Thorchain (RUNE) has always been a fascination of mine - ever since @shanghaipreneur, @jk6276 and @nealmcspadden started talking about it here on LeoFinance.

I bought into RUNE under $0.40 and overtime, continued to accumulate. In the bull cycle, I took some profits but I still hold RUNE as one of my largest crypto portfolio holdings. I participate in the RUNE-ETH LP and hold the rest as liquid RUNE, signaling my long-term belief in what they're building.

The world economy is hurting right now. We've seen some of the largest banks in the world go under. We're seeing a clearer picture in terms of banks losing customer funds and being negligent overall.

It's no surprise... We all know that banks are crooks. That's half the reason Bitcoin and Crypto even exist today. The 2008 crisis and subsequent bailout was cited in Satoshi's paper.

The problem? 14 years after BTC's creation and we are still heavily reliant on crypto on-ramps and off-ramps. Additionally, we are highly dependent on centralized exchanges like Coinbase, Binance and others.

Our reliance and inability to trust these exchanges was proven with the collapse of FTX. The constant FUD around stablecoins and CEXes like USDC, Binance, etc. continue to prove themselves as a targeted weakpoint in our industry.

A lot of projects are aiming to solve these problems. Thorchain has long been a fascination of mine since they have aimed high and actually achieved the many milestones they've set out to achieve.

Nothing happens in a straight line though. Thorchain has had a number of issues over the years including a few hacks that resulted in millions of dollars lost. I believe most of those LPs were made whole from RUNE reserves, but the damage of the hack remains in peoples' minds.

Thorchain: Creating Trustless Bitcoin Swaps in a World of Economic Turmoil and Banks Dying

We've identified the problem: we have a massive reliance on both banks as onramps/offramps as well as crypto CEXes for crypto-crypto trading.

We need to fix both of these problems. Crypto-crypto trading is slowly being solved with the advent of DEXes like Thorchain, Uniswap, Pancakeswap, 1INCH, etc.

We're seeing a colossal level of innovation in this arena of crypto-crypto trading liquidity and volume. This trend needs to continue.

Thorchain brings native crypto assets and a multi-chain future into focus. Wrapped assets can have a whole other layer of issues (and values) but having some native layer for trading is huge.

Native BTC swaps are the core value prop of Thorchain.


This tweet calls up a huge point in crypto. Swapping assets - especially across blockchains - is still relatively difficult. You often have to use some kind of centralized intermediary like a multi-chain bridge or a CEX to convert across chains.

Thorchain solves this.


Thorchain offers a wide variety - hundreds of altcoins, native BTC, ETH, LTC, etc. - of crypto trading options.

You can now trade assets in a trustless, decentralized and permissionless way on Thorchain.

Why No Mass Adoption?

It isn't all sunshine and rainbows. There isn't mass adoption of Thorchains cross-chain trading rails.

Why is that?

A lot of it - as I mentioned before - comes down to trusting the protocol. I think a lot of people fear the Thorchain protocol and they are afraid to LP given its history.

That combined with a lack of overall awareness, marketing, etc. Thorchain has many of the same problems that Hive does. Great technology, amazing community but growth is challenging.

Growth for Hive means more users. Growth for Thorchain means more liquidity.

Gaining liquidity requires a mix of trust, incentives, etc. We need Thorchain to deepen their liquidity pools to kickstart a pinwheel effect.

As thorchain LPs deepen in liquidity, there will be a lot more trading volume. More volume = more incentives to provide liquidity and so on and so forth. I wrote an article way back in the day about black hole theory.

I think mass adoption for protocols like Thorchain is more important now than ever before. The real thing standing in the way of decentralized trading in the crypto space is having sizable liquidity for low slippage. We're slowly seeing this become reality on Thorchain.

The question isn't if... but wen.

Image from thread

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