We’ve been exploring ways to proactively surface opportunities for the Zcash community to express interest and contribute to new initiatives. I’d like to introduce Thorchain, a multi-currency decentralized exchange built on the Cosmos / Tendermint SDK. I wanted to share a brief update after speaking with their team.
Thorchain is a decentralized liquidity protocol that provides a trust-minimized way to trade spot tokens. It enables traders to swap tokens across various Layer 1 blockchains without taking on counterparty or custody risk. For example, a user could swap spot ZEC for spot BTC without ever using a centralized exchange. Thorchain improves on the model for decentralized exchange by reducing, or even eliminating, impermanent loss through the use of Continuous Liquidity Pools as the basis of exchange. A detailed overview of the Thorchain protocol can be found here.
Benefit to Zcash:
To date, most DeFi protocols trade synthetic assets or wrapped assets on Ethereum. Thorchain would provide the ability to transact with spot Zcash in DeFi, while interacting directly with the shielded pool.
Benefit to Thorchain:
The Zcash shielded pool secures over $65M USD, protected by strong cryptography. Protocols like Thorchain can provide privacy to their users by supporting deposits from the Zcash shielded pool. If a user holds value in the shielded pool, they can exchange it on Thorchain without leaking any information about themselves on the blockchain.
To build a ZEC.RUNE bridge, a developer would require the following documentation.
- The chain client enables thorchain to observe & make witness transactions re. on-chain activity.
Node daemon: https://gitlab.com/thorchain/devops/node-launcher
- The node daemon is required to be run by each node (as above).
Wallet client: ASGARDEX Common · GitLab
- The wallet client is a simple js common interface/client for all the chains including btc, eth; so zcash will need to be added.
THORchain is a community-driven project and the imperative needs to come from both the Zcash community and the Thorchain community. The next step is to gauge developer and community interest in building the Zcash bridge.
Look forward to hearing your feedback. Thanks!