THORChain, the decentralized liquidity protocol, has achieved a significant milestone by surpassing $10 billion in total monthly trading volume for the first time ever. However, there is a divide among Bitcoin maximalists regarding the safety of the platform for potential borrowers.
On March 27, THORChain’s official social media account announced this achievement, which was confirmed by Runscan data, indicating that the protocol has reached $10.26 billion in trading volume this month.
Following this announcement, a debate erupted among Bitcoin maximalists regarding the security of THORChain and the potential risks for Bitcoiners who want to take out interest-free loans using their BTC on the platform.
Fred Krueger, a mathematician and Bitcoin investor, expressed his confidence in THORChain by stating that he believes it is a safe platform for BTC-backed loans, even though he acknowledged the potential risks involved.
However, Bitcoin analyst Dylan Le Clair disagreed with Krueger’s claims, arguing that a loan collateralized by Bitcoin and dependent on the exchange rate of an altcoin is simply transferring the risk to another asset.
THORChain is a decentralized liquidity protocol that facilitates the swapping of native assets across different blockchains. The protocol allows users to take interest-free loans against major cryptocurrencies such as Bitcoin and Ether, without imposing liquidations or fixed expiry dates.
In its most recent upgrade on January 30, THORChain reduced the collateral requirements for Bitcoin and Ether from 400% to 200%, enabling users to borrow up to half the value of their provided assets.
However, analyst Chris Blec highlighted two significant concerns with THORChain’s lending model. Firstly, investors face the risk of lending their Bitcoin to a protocol that could collapse or be exploited, as has happened in the past. Secondly, investors are reliant on a centralized provider not changing its terms and conditions, which exposes their loans to potential risks.
It is worth noting that THORChain has faced security vulnerabilities in the past, leading to the halting of its mainnet on two occasions in 2023.
In conclusion, while THORChain celebrates its milestone of $10 billion in monthly trading volume, there are differing opinions among Bitcoin maximalists regarding the safety and risks associated with its platform for borrowers.