The crypto space moves fast, Thorchain has taken several steps to make whole to the LPs who lost funds and add protocol level insurance and bounties as discussed here:
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I think there are 2 potential issues with it:
- Historical APY is not a good measure of performance. Ponzi schemes have great ROI.
Btw, I am not accusing Thorchain of anything. - This is a quote from their own website. As such, it can be biased / cherry-picked.
IMO, the differences are not as big as you present there. But I think it is up to the investors to make their own decision anyway.
Regarding censorship, it is a matter of how many nodes are running. For instance, Ren uses darknodes to be the bridge out of wrapped tokens. It is not like USDT where Tether is the only issuer.
What actions did they take? I see only actions to fix their bugs but no plan to refund the losses. Am I missing something?
For me the key point is:
It speaks to the value of integration.
I donāt agree with @aiyadt about the development costs, but I think there is not much more I can add. I provided commits references, doc links, and file comparisons to support my opinion. Short of coming up with the actual implementation, we will never know for sure.
Regardless, I agree that if there is so much market opportunity, the cost is not too high. Could it be lower? I think so, but no one seems to want to do it anyway. Credits to @aiyadt for taking the lead.
However, because the value relies heavily on future partnerships, I would like to say that these donāt always come true and one should take the possibility of business change of direction.
Letās say the project is funded and it turns out the liquidity is much lower than wZEC and renZEC. Is it ok?
In general, how do we follow through with projects that have a large business value component?
It seems to me that currently, it is not tracked once projects are delivered.
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Agreed, but this is the approach of a lot of crypto projects to provide incentives till a balanced quorum is achieved for the particular projectsā participants. Thorchain uses their LP token RUNE to incentivize the community to work towards their roadmap. I was myself skeptical of Thorchain since their inception 2yrs ago when they did an ICO via Binance. Since then, the Thorchain community has successfully bootstrapped a decentralized network, grown to a community of thousands of active users who are very supportive of the team and operations. Here is a tweet from today about how quickly the caps were filled as they relaunch their network https://twitter.com/ThorWallet/status/1443632671788347398
The difference is enormous, there is no comparison between using a token on the expensive ETH network VS native ZEC which is non-custodial, free to flow and swap to any other native coins. WZEC/renZEC tokens cannot be swapped to BTC directly within the Ethereum ecosystem. Nether can those tokens be shielded without converting to native ZEC.
Read the 5-Pronged Recovery Plan & Treasury sections specifically here Post-mortem: ETH Router Exploits 1 & 2, and premature Return To Trading Incident | by THORChain | THORChain | Medium
Yes, there is a level of expectation set from the NineRealms partnership to provide the 50k+ ZEC liquidity and the initial high % APY will attract every LP/NodeRunner to acquire ZEC to provide liquidity. There is also tremendous support from the Thorchain user base who is not active here on Zcash forums.
This is something the Zcash community needs to evaluate and come to some terms with. On one side we must not block opportunities to expand Zcash adoption, on the other, we must keep in check from being over reliant on specific teams or such endeavors. Just like we should not be reliant on ECC only to grow Zcash: https://twitter.com/zooko/status/1443603621883486215
As for tracking projects, when ZF was the only one funding community projects, there was a sense of ZF tracking the progress/deliverables of such projects and evaluating the works for future proposals from the same individuals/teams. Otherwise, as a community we have the ZFND platform to track the progress of the funded projects.
@hanh What kind of ideas do you have to track projects?
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Thanks, that was quite interesting.
Iām curiousā¦ did they do it?
I think we should all participate in keeping project teams accountable for their work before and after they are delivered.
IMO, there is a tendency for some projects to just meet the contractual bar.
We see it often in corporate business but we are a community around open-source software. I trust we can do better.
Just to be clear, I do not think it is the responsibility of the project to guarantee adoption. Hypothetically speaking, if a project claims they can bring X new users but it turns out they get much fewer, I donāt think we should automatically point the finger at them.
On the other hand, I believe there should be some investigation into why the expectations were not met. It could be a lack of interest from the market, or a real issue with the product (too slow, poor ux, etc).
Obviously, crypto is risky, hindsight is 20/20 and we have a large stack of money, but it doesnāt mean we should forget sound investment.
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Not yet, but theyāve set up Dashboards for LPs to track their holdings and awaiting the lost funds to be compensated. Here is the general dashboard https://thorchain.live/thorchain/chaosnet
There are too many factors that go in to this, I think the encouragement & support from community is of core importance when extracting the most value from funded projects.
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While I appreciate the enthusiasm and positivity of the community here, I think we should keep in mind that it is but a fraction of the potential user base.
Iāve noticed that some project announcements have fewer clicks on their link than likes.
Iāve been exploring ways to get zec converted to eth for DeFi activities without having to perform any extra KYC-tasks (like using a CEX) other than paying for the original zec.
The main problem is getting zec to eth. Eth is required in pretty significant amounts (hundreds of $) to pay for gas for any defi activities. Right now, renZEC allows you to go from ZEC to renZEC on Ethereum, but you canāt do anything with your renZEC without Eth. This problem is not solved by Ethereum L2 solutions either, since they still require their own tokens (matic for polygon, eth for optimism/arbitrum, etc.) for transactions, even if the token amounts are minuscule. The only solution AFAIK to obtain the necessary tokens to put oneās renZEC to use would be would be to use a CEX without KYC, which are fast disappearing I think.
In summary, the thorchain grant seems like a necessary primitive to allow Zec interoperability with DeFi with an added benefit of providing another option for zec holders to get returns by being liquidity providers. The first reason is fundamentally important for privacy since it turns the zec shielded pool into a robust mechanism for the avoidance of mass surveillance in the cryptocurrency ecosystem (Note: as others have mentioned, shielded support for zec on thorchain is not necessary to accomplish this task due to ease of transferring from transparent to shielded pools.).
Given my above Sunday afternoon research, I would urge @ZcashGrants to approve the Thorchain grant in whatever form they deem necessary to accomplish the goal of zec integration into Thorchain. To test my thinking, I am interested in othersā thoughts on the above points.
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I thought Shapeshift didnāt require KYC since it was one of their biggest selling point. Do they now?
You have many options to acquire ETH without KYC. Use something like shapeshift. There are plenty of services that offer this without KYC.
Shapeshift delisted zec last year. AFAIK, it has not been re-listed.
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Long story short. They were forced to for a time (KYC), ZEC was delisted, they shifted to a DAO and now use Thorchain. Iām a strong advocate for Thorchain integration.
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I thought you were talking about how hard it is to get ETH without KYC, werenāt you?
Zec to eth. Pretend other currencies donāt exist.
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Safetrade has eth/yec and yec/zec pairs
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Ah I see. If someone is 100% in ZEC or only wants to do a ZEC/ETH conversion, Thorchain would help quite a bit.
However, I think most of the users of Defi have ETH, BTC or even fiat in their portfolio.
-
With Thorchain you can do native swap between BTC BTCH DOGE LTC and ETH. Maybe a few more but I couldnāt find the info (their network is down at this moment).
UniSwap or PancakeSwap have thousand of pairs. -
From one of @aiyadt early post on this topic,
25 kUSD daily represents a volume of ~250 ZEC per day.
Thatās a projected 250 ZEC daily transactions across all users of the Thorchain bridge. That is not much at all.
Therefore, I donāt think the exchange price would be very good.
IMO, If I had any amount of money to invest into strengthening the Defi ecosystem around zcash, I would not put it into Thorchain but into facilitating access to the large liquidity pools.
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Precisely.
Getting Eth is the gateway to DeFi at the moment. Perhaps one day everything will be abstracted enough to not worry about Zec to Eth, but at the moment thorchain can serve as a base layer for this abstraction since that is their main goal.
I donāt think we can make too many projections now about volume. Thorchain has barely begun, sort of feels like Uniswap in 2019 to me. I feel we have to gather future growth potential through community enthusiasm as well, and not just Zcash community, but also word of mouth as Zooko has pointed out.
We may have to agree to disagree on this point. DeFi is getting even more complicated with so many L1s and L2s. Also, so many people just want the big coins and if there is no way to go between them natively, we are missing a large user base.
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I completely agree with the complexity of Defi L1 and L2.
Thanks for the open and civil discussion, it helped me understand the use cases. We may not agree on their size, but I think we both agree that there is a use case.
We can always come back later and see which āpredictionā came true 
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I support the idea of Thorchain integration but I think this specific proposal is excessive. It would be imprudent for @ZcashGrants to approve this proposal as is.
If @NighthawkApps team insists on keeping the price of this grant, then I would like two more things included as deliverable: 1) Z-address integration; 2) Nighthawk wallet integration. The team has not committed to these two and are saying that this proposal would only be used to assess the possibilities:
Nighthawk wallet integration would be awesome!
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Iād really like to take a moment to discuss āreimbursing usersā. Thorchain froze several transfers of value as a global policy following recent events. Instead of blacklisting a few of them and restarting the chain, allowing the rest to complete, they pushed a code update which sent all the funds in question into their centralized accounts. Even if you claim itās a decentralized system, the current participants have no issue with handing over the funds in it, possibly out of trust, possibly due to not caring, and possibly because their non-compliance puts them at risk of losing millions of dollars by being blacklisted themselves. The LP situation still isnāt handled and last I checked, the most recent plans either didnāt completely reimburse or they reimbursed some ETH/whatever via RUNE. If all users sell that RUNE to obtain the actual amount of the other token they expected, theyāll end up with significantly less overall, especially if theyāre last to do so.
Users trading at the time had to submit a time-limited Google form to request their funds back. This Google form asked for Discord account information and said requests without it were less likely to go through. They also said requests they deemed malicious, which included anyone who tried to arbitrage and take advantage of pricing during the havoc, would be excluded, not even getting their original funds back.
Combined with the amount of RUNE in the hands of the development team (150m officially), along with the large amount of RUNE the protocol sends to them to burn (BNB doesnāt allow burning tokens except by the token creator. It does have to be sent to them OR sent to an invalid address) of 68m which they havenāt burned in months and represents an undisclosed holdingā¦
Not to mention there remains competency concerns of Thorchainās team, and the blatant false marketing (they tweeted they have no āemergency keysā just the other day when they have them, they have extensive powers, and theyāve used them to shut down trading before). I will note they seem to have thrown enough money at the problem and hired enough developers (some of them also of questionable competency) that future exploits should be limited though.
Even if you love the idea to Thorchain, the actual project has far too many issues in my opinion. While a listing may be beneficial, I wouldnāt want to partner with them and Iād be very careful when discussing how much money should be allocated to it. As Iāve said earlier, this proposal doesnāt actually include shielded transactions, and this really should be just a copy-paste job with some level of tweaking.
Iād also like to note people dissing renVM saying itās open to censorship and surveillance. What do yāall think Thorchain is? Thorchain takes custody into a multisig, like renVM. Neither are private systems and both have the ability to censor/blacklist. Thorchain has extensively done so in response to hacks, along with people they simply donāt like.
And while renVM does open ZEC up to DeFi, Thorchain wouldnāt. Sure, you can LP provide on Thorchain, which is an example of DeFi, but you couldnāt use ZEC on ETH nor with any ETH DApps. You also couldnāt use ZEC on a DApp on Thorchain as it doesnāt have any smart contracts. Thorchain only offers the trading side of things, and only its own trading side of things. While they are planning on synthetic assets, which are tokens mapped to real assets held by Thorchain, synthetic assets will live on Thorchain itself, and not be usable to take out a DAI loan or engage in other DeFi protocols.
The one thing interesting offered here is the DEX services. A step, which wouldnāt go through Thorchain, could simply be an ETH Smart Contract where anyone can redeem renZEC for anyone, as long as they get an amount they can sell to recoup expenses. I do understand thereās supposedly a liquidity offer on the table surpassing renZEC quantity, and renZEC quantity isnāt tradable whereas the liquidity offer amount would be. For the price mentioned, a new DEX could be built instead though, which I believe is the biggest issue here.
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