Quarterly Treasury Report — Q4 2021

THORChain

2022-02-12 — 4 min read

The treasury comprises of $146m, funding protocol development, liquidity and paying out to community grants. Liabilities have all been repaid. The protocol has 174m ($1.2bn) in RUNE reserves. Planned Obsolescence not before July 2022.

Summary

The treasury is at $146m.

The Protocol Reserves total 174m RUNE, worth $1.2bn. These are allocated for Chaosnet & Mainnet emissions.

Planned Obsolescence is guided not before July 2022.

Operational Treasury

The treasury comprises of $18m non-RUNE assets, $90m in RUNE and $38m in LP positions, total of $146m.

These funds are spent on protocol development, technical costs and community grants.

The LP Positions are maintained in THORChain and Uniswap to provide:

yield on assets
liquidity for RUNE
LP of last resort

Liabilities

All liabilities have been re-paid. Occasionally some network instability issues or bugs cause unfair slashing events to nodes. Generally if these slashing events are put down to network issues, then they are refunded. After mainnet, this practice will cease, and instead Node Operators who are slashed should:

1) Attribute the slash to the cost of doing business as Node Operator;

2) Investigate the slash and raise a PR if a bug is found;

3) If slashed due to an external chain instability; then campaign to have that chain removed from the network.

These market-based principles are important to ensuring the protocol doesn’t subsidise chains that cause a cost to the network above their revenue generated.

Debt

THORChain has no longer any debt and will not entertain debt after mainnet. Any fund-loss events after mainnet will be shared with all network participants as the network is designed.

Protocol Reserves

60m RUNE remains in standby, with 114m RUNE already deployed to the network. The standby reserve will continue to be held in standby until mainnet to create options for the treasury.

Runway

The current project runway is at 18+ months and is more than sufficient.

Community Grants

Treasury has handed over curation and administration of community grants to NineRealms. Every 3 months, all community projects will need to send a quick pitch to 9R to close another 3 months of funding. This is to ensure capital is being expended efficiently, fairly, and inline with THORChain objectives:

Increase Security of the network (node tooling, node features, wallets)

Increase Liquidity of the network (LP education, LP tools, LP wallets)

Increase Volume of the network (Wallets, Integrations)

Applications have closed for Q1 2022, but will re-open in April for Q2.

NineRealms

NineRealms is a community-led team that stood up to assist core devs with the delivery of THORChain and its ecosystem. In 2021, 9R was awarded several liquidity grants not exceeding 1m RUNE for their assistance in bringing liquidity to the network.

They have since expanded their scope and breadth of help, now assisting with:

Strategy and network rollout
Security (THORSec)
Chain integrations (DOGE, Terra and more)
Business Dev (wallet integrations and Dev UX)
Community initiaves

As such, NineRealms was awarded a RUNE vesting package, taken directly from the original team allocation. It is an 24month vesting package that starts at mainnet and will continue to beyond Planned Obsolence. NineRealms will qualify for their vesting package by meeting key performance and engagement milestones.

Planned Obsolescence

Treasury plans to hand over full control of the protocol, github, socials and its treasury not before July 2022 and when the following is hit:

Mainnet, 4–5 chains
THORFi rolled out
Decentralised (100+ nodes)
Adequate community support (wallets, exchanges, dashboards, bots)

Decentralising The Treasury

It is important that centralised points of failure are removed; the largest one being the treasury management. The goal to mitigate this risk is to distribute the treasury to teams who have demonstrated long-term alignment with the protocol’s objectives and who can efficiently and effectively manage a pool of funds with no legal owner for a greater good. Not everyone is up to this task.

The original team have demonstrated their ability for this task, and some emerging teams include NineRealms and some ecosystem projects. These teams are short-listed for the role of treasury management post-obsolesence.