One of my favorite projects right now and it's still in its infancy is Thorchain. I've written about it before back when a prominent supporter of their biggest competitor, Uniswap, started trashing it out of nowhere. It was the first example of DeFi tribalism that I had ever seen. Usually, the DeFi crew is all about collaboration. The composability of its "money Legos" encourages projects to work together to bring value to an entire ecosystem.
Obviously, that Uniswap supporter was afraid. They've been coasting on going on 15 months in the Automated Market Maker (AMM) space without any competition. That's about to change. Thorchain is about to launch their ChaosNet, their version of an incentivized testnet, for Binance Chain BEP protocol tokens only. However, it will only be a matter of time before that expands to other chains, including Ethereum, at which point it will unarguably be a better product than Uniswap. It will then just be a question of time as to when other people will realize that and begin to use it.
One way to think about Thorchain is simply to refer to it as a "cross-chain Uniswap with a token." If Thorchain can attain the kind of volume that Uniswap saw in 2019, then it could be a very interesting investment even at these levels, which are close to 10 times the price at which Thorchain's native RUNE token debuted at during an Initial Dex Offering (IDO) on Binance DEX in the summer of 2019.
In a private e-mail to subscribers to the amazing Bankless DeFi newsletter, it was estimated that a "Uniswap with a token" model could be worth anywhere between $52.39 million and $169 million in market cap based on the $1.69 million in fees earned by the Uniswap platform in 2019 and its anticipated growth trajectory (i.e. assuming 30-100% growth in those fee amounts in 2020). That estimate was before a huge surge in assets tied up in Uniswap's liquidity pools. The lower bound of these estimates would represent a 3.5x return on Thorchain's current market cap of $15 million.
That current valuation is based off not even having a working product yet. But those are on the way. Soon enough, there will be BEPswap, which is basically like an improved Uniswap for the Binance Chain powered by a native utility token. Part of the reason for the piqued interest is the RUNE utility token, but also given the abuse that Uniswap has seen lately in regard to being a part of the many recent DeFi exploits. BEPswap will utilize Thorchain's slippage-fee based mechanism and NOT require liquidity pool contributors to give up control of their coins, while Uniswap uses an exploitable fixed-fee mechanism and DOES require liquidity pool contributors to give up control of their coins. Uniswap is, of course, working on platform improvements itself. A Uniswap 2.0 is almost certainly on its way. But this is why competition in the AMM space is so damn great! Each project can push the other to add features that benefit the users.
One of the most refreshing aspects about how Thorchain is running its project is the amount of transparency it provides. Yes, Thorchain calls itself "a pseudo-anon team of hand-picked engineers working on a very specific problem with tested technology and a validated economic design." But the anonymity of the developers is a feature not a bug. It's to avoid potential regulatory capture in the future. For example, top-line dex KyberSwap, powered by the recently unstoppable KNC token, recently had to exit Malta for the British Virgin Islands to escape the onslaught of 5AMLD regulation in the EU.
Every week Thorchain provides a detailed review on Medium of what development has been going on with the project. So far they have published one "Weekly Dev Update" in each of the past 32 weeks. Its open-source git on GitLab is well-maintained. The project lead, Australia-based Kai Ansaari, is regularly available to the Thorchain community on Twitter and Telegram.
This is the promise that the project makes on its website:
Of course, this sounds very reasonable. But the fact is that, in the cryptoverse, this level of transparency is almost unprecedented! Monthly communications on financial position are not audited, but they are clearly presented in monthly treasury reports. The last one was published on March 3 and outlines 2 basic reports.
The first report presents the balance sheet or treasury information:
The second report is titled Runway and outlines how many developers the team currently employs, the composition of their pay (70% USDT/30% RUNE) and if they plan on hiring any more. For instance, the project recently took on 2 additional devs to work on its Asgard Wallet. All of this information is presented to calculate a precise number for just how much time the project can survive with its current resources (and no foreseeable future income beyond selling RUNE... that is, at least, until their platform(s) go live).
They even periodically release a report on the distribution characteristics of their native RUNE token. Many people, myself included, believe that the best metric to determining a project's success is distributing it widely amongst a passionate community. To that extent, Thorchain is performing admirably having convinced 3,153 wallet addresses, an increase of 331 during February, to hold RUNE on their Binance Chain address. Of those, 933 engage with RUNEVault, a staking mechanism that rewards hodlers with additional RUNE at a rate of 35-45% APR. Stakers on RUNEvault have increased by 105 this past month.
A lot of this data could be discerned by examining on-chain explorers, but having it regularly and consistently presented in easy-to-understand and readily available reports is part of what makes Thorchain's transparency so unprecedented.
Now I'm not saying for you to go out and mortgage your house and put all that value into RUNE on your TrustWallet on your phone. But I am saying that this kind of transparency should be the rule rather than the exception in the cryptocurrency industry.
It's positively a shame that it's not.
Posted via Steemleo