Understanding THORChain | THORChain Docs
THORChain is a cross-chain decentralized protocol that allows native swaps between different blockchains.
docs.thorchain.org
THORChain is used to trade or swap BTC for ETH (and vice versa).
.@THORChain is insolvent
In the event of any large debt redemption and/or savers & synths deleveraging, it is certain that TC cannot meet its bitcoin and eth denominated obligations.
Validators decided to pause the network while they vote a restructuring plan
I'm not going to beat around the bush and act like everything is allright. It isn't.
Thorchain's liabilities :
- $97m of lending liabilities ($eth $btc)
- Approximately $102m worth of savers and synths ($eth $btc)
Thorchain's assets are $107m of exogenous liquidity into the liquidity pools
This can also be pulled by LPs at any time or sold into by $rune holders if there is panic.
Lending obligations are met by minting $RUNE and selling it into the pools, it makes the design highly reflective and even worst than it looks
Repaying $4m $rune of liabilities yesterday resulted in the protocol owing a few million $rune extra
By design the protocol is short btc and eth
I have been warning about the danger of hidden leverage since I joined this community (since ILP).
I've argued for deleveraging since the streaming swaps launched, the protocol simply needs less capital to fill since active liquidity can now participate in filling them.
I'm not writing this with a happy heart please don't shoot the messenger, I am stepping up here because Thorchain has gotten so complicated that only a handful of people fully understands how the leveraged feature & liquidity works with each other and affects the underlying assets.
If nothing is done it will be a race to the exit and the entire protocol's value will vanish.
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@1984_is_today: .@THORChain is insolvent In the event of any large debt redemption and/or savers & synths deleveraging, it is certain that TC cannot meet its bitcoin and eth denominated obligations. Validators decid...…
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Bad design = poof, it's gone