Announcing THORChain Exchange Partners

THORChain

2019-12-01 — 4 min read

THORChain

THORChain is a decentralised liquidity network (DLN). Anyone can participate in the following ways:

Bond over 1m RUNE and run a THORNode.
Stake any supported asset in a pool.
Swap and arbitrage over markets.
Support the development team.

THORChain offers the following breakthroughs:

Complete transparency on the liquidity and logic of the entire network at all times.
Distribution of risk across the 99 THORNodes (in future, higher).
2x collaterisation of staked capital versus bonded capital.
Permissionless access to global liquidity.
Manipulation-resistant price feeds.
Deterministic always-on liquidity for all assets.
Shared incentives for all participants.
Non-custodial staking of assets.
On-chain swaps with no pegged tokens.

Traditional Exchanges

Traditional exchanges with limit-order books are borne out of compromise, originating from a system of counter-parties, manual intervention of trades, assets that can’t be divisible below 1 unit and legally-enforced transactional relationships.

In the last 11 years since Satoshi Nakamoto gave the world its first digital asset built on a system of decentralised leaderless trust, the manner in which to convert digital assets has not caught up to what is possible. The largest digitial asset exchanges today do so using custodial trading interfaces with MySQL databases of IOU tokens captured with KYC’d gate-keeping.

What is possible should only be limited by mathematics and computer science, and the only consideration should be mechanism design and incentives. This is the pursuit of the THORChain project.

As such, the THORChain team believe that over the course of the next few years, there will be a rapid switch from the current industry of centralised exchanges, to decentralised liquidity networks. This switch will primarily be driven by incentives — users of decentralised liquidity networks will share in the income of the system. The secondary driver will be because decentralised liquidity networks are much more secure and transparent.

The Future

The future is in decentralised liquidity networks, like THORChain, and over time all exchanges that wish to stay relevant will throw out their current architecture and rebuild their interfaces on decentralised liquidity networks.

Their users will be able to stake their assets to earn a return, and access low-fee swaps at any time. The exchange is likely to acquire a node, which will become their primary source of income. Incentives will be clear, security will be very high and the global liquidity network will rapidly become the entire market. This is also because assets can simultaneously be held in a non-custodial manner but still be “on-market”. This will result in increased liquidity and reduced volatility of markets, since the current mantra of “not your keys, not your coins” works to reduce liquidity and thin out markets, leaving the remaining liquidity at-risk and highly manipulable.

Less than 10% of Bitcoin is “on-market”, resulting in low liquidity

THORChain Exchange Partners

Any exhange who wishes to list the Rune token, may do so without permission. However, if an exchange wishes to become a THORChain Exchange Partner, they will access the following:

Development assistance from the THORChain team in integrating the THORChain protocol and Midgard API.
Product assistance from the THORChain team in designing appropriate staking and swapping interfaces.
Promotion throughout the THORChain community.

Obligations

The THORChain team have limited bandwidth, but are willing to support Exchange Partners who share the vision.

Exchange Partners should commit to the following:

Acquire Rune and become an aligned stakeholder in the ecosystem.
Fully open-source any code or implementations that integrate with THORChain.
Promote the staking and swapping of assets throughout their own communities using the integration.

Limited Time

The THORChain Exchange Partner program will run for as long as it is necessary to bootstrap an ecosystem of THORChain-integrated exchanges, and while the THORChain team are available to conduct it.

The THORChain and Midgard API codebase is fully-open source, and anyone can integrate with the protocol. However assistance from the THORChain team will give Exchange Partners an edge in integration for rapid on-boarding to the ecosystem.