Is THORChain (RUNE) Undervalued? with Erik Voorhees and Chad Barraford

What is Thorchain? I don't know, but I'm here to find out and to help me learn about what Thor Chain is. I've brought on two people with me on the show today. First, Chad Berriford, one of the core developers of the Thor Chain project, as well as Eric Voorhees, Bitcoin OG, who discovered Thor Chain to be the spiritual protocolized descendant of his old centralized Shapeshift exchange. If you are looking to understand what Thorchain is, how it works, why the rune token captures value.

And how ThorChain can change the crypto landscape, then this episode is for you. Bankless Nation, I do not own any rune myself. And Bankless as a company holds no position in this particular project. We are simply here to just learn and explore and to give projects like Thorchain that are in pursuit of helping build a bankless future a voice to the rest of crypto to showcase what they are building and why they are building it. So time to put your learning hat on. Let's get into the conversation with Chad and Eric. But first, a moment to talk about some of these fantastic sponsors that make this show possible. Bankless Nation, I would love to introduce you to Chad Barriford, a serial entrepreneur and web 2 builder starting in 2010 until he got bitten by the blockchain bug in 2017. While participating in a Cosmos hackathon in 2019, Chris wrote some of the first lines of code that were committed to the ThorChain project and has been the largest code contributor ever since. Chad, welcome to Bankless.

Uh thank you for having me I've been dying to come on for quite a quite a long time.

I even showered.

Right.

That's how exciting I'm I took a shower.

Yeah, and the Thorchain community are right alongside you with you. I'm sure they're very, very excited to have this episode. In addition to Chad, we also have Eric Voorhees, the crypto OG. You know him. He needs no introduction, other than the fact that I suspect Eric's interest in ThorChain runs parallel to his creation of Shapeshift, a decentralized exchange that has changed many shapes over the years, both as innovations in crypto has offered new solutions and also regulatory pressures has changed what's allowable in the crypto sphere. Eric, welcome back to Banquist.

What's up, David? Good to see you, man.

Likewise, likewise. All right, Chad, I'll throw this one back to you. What is Thorchain?

Yeah, so ThorChain uh is a DEX. It's an AMM similar to Udiswapper, which I'm sure a lot of your your your watchers, listeners are

aware of that. And what makes ThorChain so unique and so different

uh is that it's able to do a cross chain swapping with layer one assets. Uh it doesn't do wrapped assets, it doesn't do anything like fake Bitcoin or whatever, but it can transact between Bitcoin to Ethereum to AVAX to BNB to Doge to Litecoin to a bunch of different chains all at once. And uh that is uh a transformative uh and not much needed technology in our in our space.

When you say Dex Chad, typically my my brain and many others are just kind of gonna go to a smart contract on Ethereum, something like Uniswap, something like SushiSwap, but that's not exactly what Thorchain is. Can you talk about the differences that ThorChain is bringing to the table in the pursuit of the goal, which is to be a decentralized exchange?

Right. So you can't actually build a cross-chain DEX uh in the same context uh

with uh a smart contract. You need to have your own validator set so that they can use what's called threshold signatures to control a wallet amongst over 100 105, I think the number is of validators. So we had to you had to build it outside of Ethereum in order for this to actually function to work. And so uh everything is done by a Cosmos app a Cosmos chain. It's a Cosmos chain itself with 105 validators right now.

And so those all operate together to kind of

custody those funds while you're trading or swapping or LPing or all of these kind of things.

Okay, so Thorchain is a the goal is of Thorchain is to be a DEX, but specifically a cross chain DEX. So there's many different blockchains out there, and ThorChain wants to make them a little bit more interoperable, a little bit more integratable with each other, like a middleware layer between many, many blockchains to help them be able to swap assets with each other, correct?

Right. And one of the key components with the key focus is we want to make sure this thing could operate with anything. It could be UTXOs, it could be EVMs, it could be a crypto note like Monero, it could be a polka dot, it could be Cosmos, it could be

arbitrarily any chain that you can probably think of, ThorChain could probably support it.

Okay, we'll get into the technical details about how that works because I would imagine that is a pretty large engineering lift, getting blockchains to talk to each other. The answer is yes to that.

Yeah, I'm sure. I'm sure. Before we get into the tech details though, Eric, um maybe talk a little bit about your perspective and your journey discovering Thor chain and and why it resonates with you so much.

Yeah. Um, okay, so

so when we started Shapeshift back in 2014,

um, it was notable because it was non custodial and it was a way to trade one asset for another.

So this was like in the wake of the Mt. Gox collapse, and basically um, I wanted to create an exchange that

couldn't steal people's money because it didn't hold people's money.

So um an asset would come in and we'd send an asset back out.

And so while it was non-custodial, uh, we were still the intermediary.

So a user's asset would come to us as a centralized company,

and we would send an asset back to that user right away.

Um and

that worked for a while. Uh, however, by the time you know the big bubble in 2017, 2018 happened,

the regulatory pressure on ShapeShift became, let's just say, high.

And um, we made the horrible, difficult decision to implement KYC on ShapeShift.

And basically operate like a financial institution.

And what pulled us into that requirement was being an intermediary.

So

this was very tragic for us. And I didn't really know what to do. And it kind of floundered around for a couple years under that model.

And then I saw, you know, Uniswap emerge.

And Uniswap didn't have KYC. It had like that similar, easy magic of trading one asset for another

that Shapeshift had years before.

And Uniswap, you know, was a company based in Brooklyn, and I was like, how the hell are they doing this without getting into

all the legal mess that that we have?

Um and I end up

sorry, there's a phone. I end up learning that um

that uh

it's because as a smart contract, they are not an intermediary.

So they're not um

they're not receiving funds of anyone. And I start learning about smart contracts more in depth. And

um I was like, man, this is this is great. I wish ShapeShift could do this,

but there's a big problem, which is that like Uniswap doesn't work on any chain other than

ETH.

So while you have all the tokens there, that's cool. But

we can't um

you can't use something that's like doesn't include Bitcoin.

So fast forward like a couple years,

and um I learned about ThorChain. And I learned that like it's a DEX like Uniswap,

but it actually supports not only Bitcoin, but other major chains.

And uh I realized we could actually just swap out the entire back end of ShapeShift for the infrastructure that Thorchain had built.