Frequently Asked Questions

Why use BZFT tendermint? We're using tendermint which is a classical BFT algo. 2/3 of the validators need to agree and the network values safety. The chain has instant finality and this is needed to secure cross-chain bridges. Why does RUNE need to be a counterpart to every pool? If each pool is comprised of two assets eg. BTC:ETH then we have a scaling problem with n*(n-1)/2 possible connections.

By having RUNE as the other side of each pool, $RUNE becomes a very fast (almost atomic swap like) settlement currency. So you can go ANKR > Rune and then Rune > BTC Why do you use cross-chain bridges instead of Atomic swaps? Simply put, Cross-chain bridges are a better solution than Atomic Swaps. Atomic Swaps involve a complex 6-8 process of signing cryptographic keys between two parties that require interactivity. You also need a counter-party on all trades.

Cross-chain bridges, coupled with continuous liquidity pools means you don't need a counter-party, and swaps can happen in less than a second. Will there be a pool with stablecoin? There will be a USD pool, which will be connect with many different USD stablecoins, derisking them all and allowing traders to arbitrage the price to exactly $1.

We anticipate the rUSD to be the most stable and reliable stablecoin.

What is the use of fees? On-chain the tx fees are needed to prevent DoS attacks, but unlike other protocols, all tx fees BURN Rune, which means the supply of RUNE is foreve capped at 1bn What are the five types of users in the ecosystem?

User: swaps assets and leaves.

Staker: stakes assets and earns on users swapping. They can come/go anytime they want

Traders: arbitrage pools between market prices.

Validators: secure the main chain, they don't hold any funds, they simply process blocks and come to consensus

Bridge Nodes: maintain the threshold signatures with external assets. They also hold no funds, since they need to cooperate to sign signatures.

Will KYC be required? No KYC - it is permissionless. The amount that can be swapped only depends on how much you have and how much is already staked!

Will there be a lockup for staking the tokens? There is no minimum or maximum time or amount. Join and leave whenever you wish. What is your monetary policy? To goal is to have a fixed supply at all times.

Instead of constantly emitting (infinite supply like Cosmos or Ethereum) or reducing the emission down to zero (Bitcoin) the team elect to match emissions to the difference between current circulating supply and the max supply, as well as burning fees. This means there is 1 billion fixed supply, with 500million progressively emitted to validators for security and liquidity over time. However all transaction fees are burned, and therefore a constant income is always paid to validators. In short:

1) Fixed supply of 1bn means token holders don't get diluted

2) Constant emission means validators constantly get rewarded

3) Constant burn means emission stays high How will THORChain utilise sharding? Yggdrasil protocol is a novel sharding mechanism unique to THORChain. Unlike legacy sharding applications which reformat databases tables into horizontal rows, Yggdrasil Protocol deploys a vertical sharding technique based on transactions between entire chains that are stored on different nodes. This framework is more effective because it removes the need for a validator to piece together shards and is in turn ideal for cross-chain token transactions and trading. Will you need other exchanges once your mainnet is up? Once mainnet is launched we will not need to work with exchanges. We're providing a massive liquidity marketplace. Exchanges will be able to integrate via websocket/api to provide liquidity & arbitrage though. What is the use of Flash Network? Essentially it allows a group of Layer2 nodes to anchor to trustless price feeds to allow cross-network instant asset swaps. Is the team profit oriented? No - not profit orientated. All fees go back to users. There is no revenue model for the team via the protocol. All swap fees go to stakers, all protocol fees are burned, emissions/block rewards go to validators.The team are incentivised through holding the same RUNE as everyone else. What is the average rate of return that users can expect when staking in pools? In the high risk pools, upwards of 10% and in the low risk, deep liquidity pools like BNB & BTC expect 3%-8%. How is the market price for swaps calculated? The prices are calculated based on the ratio of the assets in the pools which anyone can change. If a large trade causes a slip in the pool, anyone can come along and arbitrage it back to their advantage. It's also resistant to manipulation because anyone can participate in repricing assets to correct market prices.