For the first time, THORChain, the decentralized finance protocol, has recorded a monthly transaction volume exceeding $10 billion. Despite this landmark, Bitcoin enthusiasts are sharply divided over THORChain’s security assurances for users. The protocol’s social media presence highlighted this accomplishment, with Runscan confirming a volume of $10.26 billion for the month.
Debate Among Bitcoin Maximalists
The announcement ignited a flurry of discussions among Bitcoin advocates regarding the trustworthiness of THORChain, particularly when it comes to Bitcoin-backed, interest-free loans. Bitcoin-based investors are considering these loans as a means to generate additional returns without liquidation risks.
Conflicting Opinions on Investor Security
Fred Krueger, a mathematician and Bitcoin investor, expressed support for the platform by touting the safety of Bitcoin collateralized loans. In contrast, Bitcoin analyst Dylan Le Clair conveyed skepticism, suggesting that the protocol merely shifts risk by offering loans backed by a volatile altcoin exchange rate.
THORChain specializes in enabling cross-chain swaps and provides loan services against major cryptocurrencies like Bitcoin and Ethereum, with terms that do not include liquidation or fixed repayment schedules. The protocol modified its collateral requirements in January, reducing the percentage necessary for Bitcoin and Ethereum, which permits higher borrowing amounts relative to the collateral value.
Despite the innovative model, concerns linger about the potential risks of the lending framework. These include the possibility of the protocol suffering an attack, as it did in 2021, and the chance of changing loan terms by central authorities, which has led THORChain to suspend its operations twice due to security concerns.