No Strings Attached: THORChain’s New Lending Initiative Breaks the Chains!

THORChain, a decentralized liquidity network, is ushering in a new era of finance by introducing a ground-breaking lending program. With an emphasis on simplicity, security, and accessibility, this initiative offers a unique blend of benefits with no interest, no liquidations, and no expiry on loans.

The announcement of THORChain’s lending launch represents a shift in the lending paradigm, introducing a community-focused approach to borrowing. Borrowers must adhere to a minimum loan period of 30 days, providing them the flexibility and time needed to manage their funds. Collateral choices include BTC and ETH, two of the largest cryptocurrencies, broadening accessibility and securing loans. The repayment process is flexible, allowing for partial payment, but the collateral is only returned once the loan is fully paid off. Moreover, although debt can be paid off in any THORChain asset, repayment is consistently accounted for in TOR.

Emphasizing its mission to democratize finance, THORChain’s lending model is firmly grounded in principles that foster responsible lending. The platform does not allow increased debt through collateral appreciation; instead, a new loan must be created to receive more debt. It also ensures transparency by accounting for debt in TOR (USD), rather than the amount of crypto initially received for the debt.

THORChain’s lending initiative also introduces the @THORSwap Whale Tier, offering a 50% exchange fee discount on swaps over $1m USD. This encourages whales to take self-custody and explore DeFi, promoting a #BetterthanCEX pricing model.

The lending program’s features extend to allowing the deposit of native collateral to create debt at a defined collateralization ratio (CR), always denominated in USD (TOR). This includes risk management tools such as collateral limits, slip-based fees, dynamic CR, and a circuit breaker on RUNE supply, further enhancing security and reliability.

Users can create loans using native assets like Bitcoin as collateral and can even hold loans without the risk of liquidation. This facilitates strategies like being short on USD while being long on crypto assets. From the protocol’s perspective, lending increases capital efficiency, trading volume, and total bonded, helping THORChain to scale. It also acts as an attractive sink for capital.

The launch specifics include BTC and ETH as the restricted collateral at launch, and a minimum loan term of 30 days. Further, derived assets like thor.btc and thor.tor are backed by the liquidity of RUNE, and TOR serves as a non-transferable unit within THORChain, always valued at $1 USD.

The loan flow is transparent and comprehensive, starting from collateral provision to debt calculation and repayment. Even the derived/virtual pools for derived assets, including TOR, are detailed, explaining how depths expand and contract to manage slippage when swapping.

In conclusion, THORChain’s lending initiative is a refreshing and user-centric approach to crypto lending. Its transparent, flexible terms, coupled with a commitment to responsible lending, positions this platform as a potential game-changer in the crypto borrowing space. This development adds a significant layer to the ever-growing blockchain and crypto movement, reflecting transparent and fair practices. Investors, borrowers, and crypto enthusiasts may find THORChain’s lending model an exciting step forward in financial independence and the broader democratization of financial services.


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Maria Irene
Maria Irene
Maria Irene is a multi-faceted journalist with a focus on various domains including Cryptocurrency, NFTs, Real Estate, Energy, and Macroeconomics. With over a year of experience, she has produced an array of video content, news stories, and in-depth analyses. Her journalistic endeavours also involve a detailed exploration of the Australia-India partnership, pinpointing avenues for mutual collaboration. In addition to her work in journalism, Maria crafts easily digestible financial content for a specialised platform, demystifying complex economic theories for the layperson. She holds a strong belief that journalism should go beyond mere reporting; it should instigate meaningful discussions and effect change by spotlighting vital global issues. Committed to enriching public discourse, Maria aims to keep her audience not just well-informed, but also actively engaged across various platforms, encouraging them to partake in crucial global conversations.


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