Summary of THORChain - Lending Design Walkthrough

00:00:00 - 00:45:00

The ThorChain platform is designed to allow for the lending of virtual assets with collateral in the form of Ethereum-based ERC20 tokens. The platform will also utilize a declutterization ratio to control the inflection point at which the supply of virtual assets increases. These important details will be clarified later in the development process.

• 00:00:00 In this video, Grassroots Crypto teacher Tyler explains how Tor, a stablecoin, works, and how lending works on Thor chains. Thor chains use a derivation algorithm to create a stablecoin, which is backed by real world assets. Once Alice deposits her BBC into the Thor chain, the lending module swaps her BDC for Rune and records the collateral as thought.BDC. Alice then redeems her Rune for thought on the swap.
• 00:05:00 The video describes the process of borrowing money using the ThorChain platform. The borrower sends two pieces of collateral (BDCs) to the lender in exchange for a loan of 19940 USDC. The debt is then minted and sent to the lending module, after which the collateral is burnt. Finally, the real important part of the process- the burning and minting of the debt- is explained.
• 00:10:00 The ThorChain video walks through the loan open and close process, explaining how room is burned and fees are paid in order to create liquidity. The example also covers how the depth of a pool is important for determining how much slip is paid.
• 00:15:00 The ThorChain platform is designed to reduce the depth of pools based on recent trade volume and price changes. This is done by reducing the virtual pool exponentially based on price changes. This prevents whales from manipulating the pools and reducing the amount of slip available to borrowers. It is important to keep the depth of the pools stable to protect borrowers.
• 00:20:00 This video walks through the ThorChain lending design, explaining the various aspects that impact a borrower's ability to repay a loan. The video also discusses how market conditions can impact a borrower's collateral.
• 00:25:00 This video walks through the design of the ThorChain lending system, which uses liquidity traps to encourage users to put money into the network. The first trap is that lenders need to have a high collateralization ratio to maintain liquidity, while the second trap is that borrowers need to burn Rune to reduce the supply of the currency.
• 00:30:00 The ThorChain is a blockchain-based platform that allows for the issuance and redemption of loans. The platform balances the need for liquidity with the need to prevent inflation by limiting the amount of debt that can be created. The collateralization ratio mitigates the risk of inflation by ensuring that a predetermined amount of debt is not created each time a loan is closed. The circuit breaker is designed to prevent the ThorChain from becoming inflationary.
• 00:35:00 This video explains how ThorChain's lending system works, and how the system benefits both lenders and borrowers. ThorChain has a number of safeguards in place to prevent borrowers from defaulting, and lenders are rewarded for their risk with high liquidity and high fees.
• 00:40:00 The ThorChain lending system is designed to increase the depth of the bond, thereby increasing the amount of room available for assets to be added. The system also has built-in protections in the form of delays, counting rules, and swap limits.
• 00:45:00 The ThorChain platform will allow for the lending of virtual assets, such as Ethereum, with collateral in the form of Ethereum-based ERC20 tokens. The platform will also utilize a declutterization ratio to control the inflection point at which the supply of virtual assets increases. These important details will be clarified later in the development process.