Bitcoin

THORChain

The decentralized liquidity protocol THORChain has notched more than $10 billion in total monthly trading volume for the first time in history. However, Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) maximalists are divided on whether the platform offers enough safety to potential borrowers.&nbsp;
In a March 27 post to X, the official social media account for THORChain announced the milestone, with Runscan <a href="https://runescan.io/stat/swapVolumeUsd?time=month" target="_blank" rel="noopener nofollow">data</a> showing that the protocol has since notched $10.26 billion this month. 
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-03/38ea14a7-999f-49d6-89cf-50cef3e582b9.png">
 <figcaption style="text-align: center;">
 Source: <a href="https://twitter.com/THORChain/status/1773063585213587648" target="_blank" rel="noopener nofollow">THORChain</a>
 </figcaption>
</figure>
In a series of follow-up comments and posts, a debate between Bitcoin maximalists broke out over THORChain’s security and potential pitfalls for Bitcoiners looking to take out interest-free loans against their BTC using the platform.
In a March 27 <a href="https://twitter.com/dotkrueger/status/1772304193920946624" target="_blank" rel="noopener nofollow">post</a> to X, mathematician and Bitcoin investor Fred Krueger said he was “willing to take the heat” for declaring THORChain to be “real” — which is essentially saying that BTC-backed loans on the protocol were a safe bet for Bitcoiners looking to gain more in the way of liquid funds.
However, Bitcoin analyst Dylan Le Clair pushed back on Krueger’s claims.
“A bitcoin collateralized loan that is dependent on the exchange rate of an altcoin to offer you a ‘“0% interest no liquidation risk” loan is simply transmuting the risk,” asserted Le Clair. 
<blockquote>
 “You are shorting a tail that you don’t know how to quantify.”
</blockquote>
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-03/0a81f944-a78f-4d96-ae35-c875657743e5.png">
 <figcaption style="text-align: center;">
 Source: <a href="https://twitter.com/DylanLeClair_/status/1772326294904029482" target="_blank" rel="noopener nofollow">Fred Krueger</a>
 </figcaption>
</figure>
THORChain is a decentralized liquidity protocol that facilitates native asset swaps across blockchains. The protocol offers interest-free loans against major crypto assets like Bitcoin and Ether (<a href="https://cointelegraph.com/ethereum-price">ETH</a>) and doesn’t enforce liquidations or fixed expiry dates. 
Related: <a href="https://cointelegraph.com/news/thorchain-third-largest-dex-rune-weekly-surge">THORChain becomes third-largest DEX as RUNE surges 50% in a week</a>
As part of the protocol’s most recent Jan. 30 <a href="https://gitlab.com/thorchain/thornode/-/merge_requests/3403" target="_blank" rel="noopener nofollow">upgrade</a>, collateral requirements for Bitcoin and Ether were slashed from 400% to 200%, allowing users to borrow half the total value of their provided assets.
On March 10, analyst Chris Blec <a href="https://twitter.com/ChrisBlec/status/1766521637199859931" target="_blank" rel="noopener nofollow">described</a> THORChain’s no-liquidation lending model as “interesting,” however he noted two major catches with the concept. 
The first was that investors take the risk more obvious risk of lending their Bitcoin to a protocol that could otherwise collapse or fall victim to an exploit — which THORChain already did in 2021, although the funds were returned.
The second was that investors are relying upon a centralized provider not to change its terms and conditions at a later date, exposing their loans to risk. 
Notably, THORChain was <a href="https://cointelegraph.com/news/thorchain-mainnet-halted-amid-new-vulnerability-reports">forced to halt its mainnet</a> twice in 2023 amid reports of potential security vulnerabilities with the protocol. 
Magazine: <a href="https://cointelegraph.com/magazine/bitcoin-etf-coinbase-honeypot-hackers-government-trezor-ceo/">Bitcoin ETFs make Coinbase a ‘honeypot’ for hackers and governments — Trezor CEO</a>

THORChain hits $10B monthly volume as Bitcoin maxis debate safety

Cointelegraph

Other articles published on Mar 28, 2024

Amazon Boosts AI Ambitions with $4 Billion Investment in ChatGPT Rival Anthropic

From $100 to $200K: The Success Story of Bitgert Coin Investors

WEMIX.Fi - SOOHO.IO joins WONDER Staking

Dogecoin’s Price Surge: What’s Driving the Rally?

Wilder World Launches on Epic Games Store as The First ‘GTA of Web3’ Game

Milei Moneda presale heats up; analysts see ETH at $5.4K in 2024

Join our free newsletter for daily crypto updates!