THORChain hits $10B monthly volume as Bitcoin maxis security debates.
The decentralized liquidity protocol THORChain has achieved more than $10 billion in total monthly trading volume for the first time in history. However, top Bitcoin (BTC) experts are divided on whether the platform provides enough security for potential borrowers.
Runscan data from THORChain's official social media account posted to X on March 27 shows that the protocol has earned $10.26 billion this month.
In a series of comments and posts, Bitcoiners who want to take interest-free loans on their BTC using the platform THORChain debate arose between Bitcoin maximalists on security and potential pitfalls.
In a March 27 post for X, mathematician and Bitcoin investor Fred Kruger declared THORChain to be “real” and “willing to take the heat” — essentially saying that BTC-backed loans on the protocol are a safe bet. Bitcoiners who want to earn more in the way of liquid funds.
However, Bitcoin analyst Dylan Le Claire pushed back against Krueger's claim.
“A bitcoin-secured loan based on an altcoin currency simply transfers the risk to provide a ‘0% interest no liquidity risk' loan,” Le Clair said.
“You're shortening the tail that you don't know how to measure.”
THORChain is a decentralized liquidity protocol that facilitates the exchange of resources on the blockchain. The protocol offers interest-free loans against major crypto assets such as Bitcoin and Ether (ETH) and does not enforce liquidations or specific expiration dates.
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As part of the protocol's most recent January 30th update, collateral requirements for Bitcoin and Ether have been reduced from 400% to 200%, allowing users to borrow up to half of the total value of their assets.
On March 10, analyst Chris Blake described THORChain's cashless lending model as “interesting,” but noted two major issues with the concept.
The first makes clear the risk of lending protocol to protocol, which Torchchain has already done in 2021, even if the investors get their money back.
Second, investors are risking their loans by relying on the centralized servicer not to change the terms and conditions later.
Specifically, THORChain is forced to retire its mainnet in 2023.
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